Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Outside the M50 and 3 beds are hitting €500k!!

Options
135

Comments

  • Options
    #62
    imitation
    Registered Users Posts: 1,815 ✭✭✭imitation


    Grandpa Hassan wrote: »
    If job loss was part of the stress, no-one would ever get a mortgage

    It should be, everybody should allow a contingency of a few months unemployment or illness. So many jobs now are just contract, the age of a job for life is gone expect for a few choice sectors. Now its pretty common that a job earning 50k+ is somewhat specialized, so getting another job in the same area can often need travel or a wait. If your travelling you have another host of expenses.

    You have to be realistic about these things, nobody is going to bail you out if something does happenas I'm sure many could tell you.


  • Options
    #63
    o1s1n
    Registered Users Posts: 34,581 ✭✭✭✭o1s1n
    Master of the Universe


    Grandpa Hassan wrote: »
    If job loss was part of the stress, no-one would ever get a mortgage

    Our mortgage could survive a job loss and be paid off on one of our salaries.

    Just sayin' ... :pac:

    Was too worried to get a mortgage any higher. I couldn't live with the stress of knowing it relied on both our salaries.


  • Options
    #64
    mariaalice
    Registered Users Posts: 12,398 ✭✭✭✭mariaalice


    imitation wrote: »
    It does seem crazy to assume that for the next 35 years that in order to service the mortgage you need to assume

    Pay more than 50% of your net salary from 2 decently paid jobs.

    That both people need to stay in said decent job for 35 years. No quitting for lifestyle choices, looking after the kids, looking after a sick family member nor can either person get any serious illness.

    You can't loose the job or get a serious pay cut. A lower paid job would probably result in default after a few months.

    Finally, to have any hope of being able to move house or have a comfortable living arrangement the economy can only go in one direction, up, otherwise the whole thing falls to bits.

    Why would you take a loan like that, why would you give a loan like that ?

    Thats way a couple on a combined salaries of 100k should not get mortgage of 450k, ( they need to be saved from themselves ) they are unlikely anyway. They should ideally only be spending around 25% of their after tax income on a mortgage.

    On a 100k they would roughly have about 5.5k a month so a mortgage of around 1.500k a month would give them a lot of wiggle room.

    While its good to be sensible you cant live your life by, this that or the other might happen.


  • Options
    #65
    boardie100
    Registered Users Posts: 387 ✭✭boardie100


    Grandpa Hassan wrote: »
    If job loss was part of the stress, no-one would ever get a mortgage

    isn't that what got a huge amount of people into trouble over the last few years... people assuming they would never lose their jobs having been mortgaged up to hilt and relying on two jobs to fund it... going into the largest purchase of your life you should always think of the what ifs...


  • Options
    #66
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    imitation wrote: »
    It does seem crazy to assume that for the next 35 years that in order to service the mortgage you need to assume

    Pay more than 50% of your net salary from 2 decently paid jobs.

    That both people need to stay in said decent job for 35 years. No quitting for lifestyle choices, looking after the kids, looking after a sick family member nor can either person get any serious illness.

    You can't loose the job or get a serious pay cut. A lower paid job would probably result in default after a few months.

    Finally, to have any hope of being able to move house or have a comfortable living arrangement the economy can only go in one direction, up, otherwise the whole thing falls to bits.

    Why would you take a loan like that, why would you give a loan like that ?

    Thats a very very close minded view tbh.

    Firstly a couple on a combined 100k split pretty evenly 50/50 would have a take home of €5,500 a month give or take.

    Paying a mortage of €2,400 leaves over €3,000 a month to live on, in fairness thats not a small amount of money to live on, and be able to save for a rainy day too.

    Lets also look to some other practacilities of such a situation.

    Over time wages will appreciate even if only with inflation, where as over time any varianace in monthly mortgage payments will become less of an impact.
    • If one person were to lose their job, they can insulate against this by having either an income protection insurance policy which would give them 12 months breathing space
    • Added to any redundancy payment that would be recieved, added to social welfare payments as small as they are assisting,
    • Olso being able to transfer tax credits to their spouse (worth about €1,800 a year net)
    • add to that savings on childcare then if one were out of work.
    • Add to that any savings to get them through a time where one is jobless (which somebody with that level of disposable income should be able to build up to a comfortable level (6 months salary) relatively quickly
    • Also consider somebody on that level of salary is likely to be highly skilled and statistics say would be much more likely to find new employment relatively quickly.
    • Not forgetting having the ability to sell up if things got to a drastic level albeit this point does assume a 10% deposit and no massive crash.
    Its not unusual for a person or couple to be at the pin of their collar having just purchased a new property, but over time the affordability does become so much easier and things become a lot more comfortable.

    I remember when I bought in 2005 things were tight to the point I couldnt be wreckless with my disposable income, 9 years on and thanks to a combination of wage inflation and interest rates not only can I comfortably pay my bills and mortgage but I can save the cost of the mortgage each month too.

    You make it out to be like they are screwed for 35 years in a static position of scraping by month to month when thats very very far from the realism of somebody buying in the scenario above.


  • Advertisement
  • Options
    #67
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    boardie100 wrote: »
    isn't that what got a huge amount of people into trouble over the last few years... people assuming they would never lose their jobs having been mortgaged up to hilt and relying on two jobs to fund it... going into the largest purchase of your life you should always think of the what ifs...

    Agreed you do have to think about the what ifs but equally that doesnt mean you cant make such a purchase.

    Everybodies different but once you have considered all the maths and options of it that doesnt make this a situation of being "mortgaged to the hilt"

    If your pragmatic then you can see ways to work such a situation even with job loss particularly based on your individual position.

    How long your with a company (i.e how large a redundancy payment you could expect if worst came to the worst) might have a bearing on your thinking

    If you have income protection insurance that might have a bearing on your thinking

    what industry you work in might have a bearing

    what industry your partner works in might do so

    any savings you may have after the purchase equally so

    how much of a deposit you put forward and your willingness to sell up and walk away if the situation became bad would also have a bearing.

    would you be willing to rent out rooms if you had to etc.

    There are a lot of considerations, and granted you have to be a very practical in terms of your thought process but if you assess all the options and go in open minded and prepared to do whatever is necessary should things go very wrong then you can do this without fear of every getting into a position where default is a risk.


  • Options
    #68
    anncoates
    Closed Accounts Posts: 13,925 ✭✭✭✭anncoates


    johnnyskeleton wrote: »
    Even more bizzare are the people who, having seen one of the largest crashes in living memory assume it cant happen again and jump in eith both feet!

    But supply and demand property cycles are probably a given so people will profit or lose their shirts again and again.

    As a long time lurker here with no agenda (have a house on a relatively normal mortgage with no intention of moving), I find it ironic that most of the people that appear to decry the 'unfair' prices are only interested in a certain type of premium property/area which is invariably drive prices up in that micro-market.


  • Options
    #69
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    D3PO wrote: »
    calling leopardstown outside the M50 ring is a bit of a push in fairness. Your getitng priced out we get it but o need to go exaggerating for effect.

    These houses are outside the M50 though.


  • Options
    #70
    JoeyJJ
    Registered Users Posts: 3,663 ✭✭✭JoeyJJ


    On the boarder of the pale, just outside that too :)


  • Options
    #71
    wrt40
    Closed Accounts Posts: 422 ✭✭wrt40


    boardie100 wrote: »
    how about a stress test of a job loss?
    Stress tests do cover job loss. They test that you can cover the interest when losing a job, rather than the whole mortgage repayment.


  • Advertisement
  • Options
    #72
    Grandpa Hassan
    Registered Users Posts: 1,945 ✭✭✭Grandpa Hassan


    wrt40 wrote: »
    Stress tests do cover job loss. They test that you can cover the interest when losing a job, rather than the whole mortgage repayment.

    How do they do that? If you're a single borrower and you lose your job your income is zero. So your interest coverage is zero. You might have savings at the point of application but the bank can't rely on them being there in a week, let alone years


  • Options
    #73
    Iintripod
    Registered Users Posts: 25 ✭Iintripod


    Jaysus folks I'm glad none of ye work in my local bank...... It'd be shut up shop time, credit has ceased.......


  • Options
    #74
    ted1
    Registered Users Posts: 23,362 ✭✭✭✭ted1


    imitation wrote: »
    Don't forget they are A3 rated new houses, that's going to add a nice bit to the price, even though its something people can often undervalue or pay little heed to when buying, but its quite possible to save thousands a year on heating fuel.

    Stop , stop , really stop talking.
    In no way will an A3 rated house save thousands a year on a three bed house.
    I really found that there is any three bed house in the country that spends thousand on heating,
    I've a d3 and spend about 800. That keeps the house comfortable all year around.


  • Options
    #75
    ted1
    Registered Users Posts: 23,362 ✭✭✭✭ted1


    Zamboni wrote: »
    Better off gentrifying places like this inside the M50 for a quarter of a mil.

    http://www.daft.ie/sales/43-whitechurch-avenue-rathfarnham-dublin/999205/?ea=1

    You could never gentrify whitechurch, absolute dive


  • Options
    #76
    Icepick
    Registered Users Posts: 2,454 ✭✭✭Icepick


    Iintripod wrote: »
    If we were to look at it this way would anyone ever do anything.......
    people would make rational decisions about property

    crazy I know


  • Options
    #77
    Icepick
    Registered Users Posts: 2,454 ✭✭✭Icepick


    imitation wrote: »
    It does seem crazy to assume that for the next 35 years that in order to service the mortgage you need to assume

    Pay more than 50% of your net salary from 2 decently paid jobs.

    That both people need to stay in said decent job for 35 years. No quitting for lifestyle choices, looking after the kids, looking after a sick family member nor can either person get any serious illness.

    You can't loose the job or get a serious pay cut. A lower paid job would probably result in default after a few months.

    Finally, to have any hope of being able to move house or have a comfortable living arrangement the economy can only go in one direction, up, otherwise the whole thing falls to bits.

    Why would you take a loan like that, why would you give a loan like that ?
    The problem here is that you don't have to be prepared for the rainy day here because the rest of the society is forced to pick up the tab for your mistakes and carelessness.


  • Options
    #78
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭MouseTail


    Icepick wrote: »
    The problem here is that you don't have to be prepared for the rainy day here because the rest of the society is forced to pick up the tab for your mistakes and carelessness.

    What you neglect to mention is Mortgage Interest Supplement was abolished in the last budget, whereas the Rent Allowance budget wasn't. I think you will find that 'the rest of society' picks up the tab for renters more so than mortgagees.


  • Options
    #79
    mr_seer
    Registered Users Posts: 130 ✭✭mr_seer


    MouseTail wrote: »
    What you neglect to mention is Mortgage Interest Supplement was abolished in the last budget, whereas the Rent Allowance budget wasn't. I think you will find that 'the rest of society' picks up the tab for renters more so than mortgagees.

    Many, many mortgage defaulters are still sitting pretty, squatting in a bank's house. Some of whom have not paid a bean since 2009. When the taxpayer owns the bank, that is a lot of tab to pick up


  • Options
    #80
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭MouseTail


    Even in those extreme examples, the arrears are capitalised and realised when the property is sold.


  • Options
    #81
    Larry Wildman
    Banned (with Prison Access) Posts: 1,460 ✭✭✭Larry Wildman


    Ludicrous talk about a bubble.

    Simple Maths:

    Prices fell by 60%. In order to get back to the same level, they need to rise by 150%. They're up by around 20%.

    That is not a bubble.

    Similarly crazy talk around that estate in Swords. 5 people queued for days to get the specific houses that they wanted in an estate of 59 properties. There are still houses available in the estate. But the media is full of hysteria. Ludicrous.


  • Advertisement
  • Options
    #82
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Get back to the same level? Why is the boom level relevent, boom house prices were as artificial as boi shares :)


  • Options
    #83
    NIMAN
    Registered Users Posts: 33,169 ✭✭✭✭NIMAN


    mad m wrote: »
    Jesus 2,400 a month.......Doesnt bare thinking about. Wow....

    ... for 35years :eek:


  • Options
    #84
    EmilyHoward
    Banned (with Prison Access) Posts: 97 ✭✭EmilyHoward


    Larry Wildman wrote: »
    Ludicrous talk about a bubble.

    Simple Maths:

    Prices fell by 60%. In order to get back to the same level, they need to rise by 150%. They're up by around 20%.

    It's actually close to 25%, and you are missing one key piece of information - this happened in a single 12 month period.

    www . irishtimes . com/business/dublin-house-prices-rise-nearly-25-in-12-months-1.1876799

    If that rate of house price inflation continues then it's definitely entering bubble territory.


  • Options
    #85
    NZ_2014
    Registered Users Posts: 306 ✭✭NZ_2014


    Larry Wildman wrote: »
    Ludicrous talk about a bubble.

    Simple Maths:

    Prices fell by 60%. In order to get back to the same level, they need to rise by 150%. They're up by around 20%.

    That is not a bubble.

    Similarly crazy talk around that estate in Swords. 5 people queued for days to get the specific houses that they wanted in an estate of 59 properties. There are still houses available in the estate. But the media is full of hysteria. Ludicrous.

    I tell you whats ludicrous, your point about prices falling 60%, prices were ridiculously high to begin with.


  • Options
    #86
    quadrifoglio verde
    Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    Augeo wrote: »
    Get back to the same level? Why is the boom level relevent, boom house prices were as artificial as boi shares :)

    For the record aib share price currently values the company higher than most of Europe's important banks (it was higher than Deutsche Bank recently)
    Bank of Ireland's current share price is 31.6 c a share with a market capitalisation of 10.26 billion. At the height of the boom, it's market capitalisation was around 18.5 billion. It's current market value is 55% of it's all time high. Over the last 2 years bank of ireland has risen approx 364%.....


  • Options
    #87
    jay0109
    Registered Users Posts: 2,670 ✭✭✭jay0109


    Larry Wildman wrote: »
    Ludicrous talk about a bubble.

    Simple Maths:

    Prices fell by 60%. In order to get back to the same level, they need to rise by 150%. They're up by around 20%.

    That is not a bubble.

    Similarly crazy talk around that estate in Swords. 5 people queued for days to get the specific houses that they wanted in an estate of 59 properties. There are still houses available in the estate. But the media is full of hysteria. Ludicrous.

    Thats some maths right there :o
    Simple indeed


  • Options
    #88
    wrt40
    Closed Accounts Posts: 422 ✭✭wrt40


    Grandpa Hassan wrote: »
    How do they do that? If you're a single borrower and you lose your job your income is zero. So your interest coverage is zero. You might have savings at the point of application but the bank can't rely on them being there in a week, let alone years

    In that scenario then you'd start to miss payments and risk losing your home. If you are a couple or even a single borrower with a guarantor, then you'd be given a period of grace where you only need to repay the interest.

    Obviously, there are scenarios where people just can't repay a penny.

    I can't see how anyone can ever get a mortgage if the stress test is how much you can repay without a job. It's utter nonsense.


  • Options
    #89
    Grandpa Hassan
    Registered Users Posts: 1,945 ✭✭✭Grandpa Hassan


    wrt40 wrote: »
    In that scenario then you'd start to miss payments and risk losing your home. If you are a couple or even a single borrower with a guarantor, then you'd be given a period of grace where you only need to repay the interest.

    Obviously, there are scenarios where people just can't repay a penny.

    I can't see how anyone can ever get a mortgage if the stress test is how much you can repay without a job. It's utter nonsense.

    I agree. To stress to that job loss cenario at any point over the term of the mortgage would mean that no one would ever get a loan. The banks protection against that risk is the LTV


  • Options
    #90
    Idbatterim
    Registered Users Posts: 17,845 ✭✭✭✭Idbatterim


    could someone tell me why the councils are complicit in the housing problem, by allowing that low a density on top of the M50 and Luas?


  • Advertisement
  • Options
    #91
    jmayo
    Registered Users Posts: 13,137 ✭✭✭✭jmayo


    fartyarse wrote: »
    Myself and my OH received approval in principle two months ago for 450k, he earns 50k and I earn slightly less, around 48k. That's based on a 35 year mortgage, monthy repayments would be €2400, stress tested to €2,700.

    Ehh do you have kids and more importantly do you plan to ?
    o1s1n wrote: »
    Our mortgage could survive a job loss and be paid off on one of our salaries.

    Just sayin' ... :pac:

    Was too worried to get a mortgage any higher. I couldn't live with the stress of knowing it relied on both our salaries.

    You don't belong in this country with a mindset like that.
    D3PO wrote: »
    Thats a very very close minded view tbh.

    Firstly a couple on a combined 100k split pretty evenly 50/50 would have a take home of €5,500 a month give or take.

    Paying a mortage of €2,400 leaves over €3,000 a month to live on, in fairness thats not a small amount of money to live on, and be able to save for a rainy day too.

    Do the couple have kids or plan to have kids ?
    Kids can amount to basically another mortgage payment, albeit a smaller one than they are proposing.
    Lets say add a grand for childcare costs.
    So now your 3,000 odd becomes 2,000 odd.

    Oh and the childcare costs doesn't factor in the cost of feeding them nor dealing with the byproduct of that food.
    Now lets add in other new additional costs like water charges, property charges, management charges, etc.

    There is a lot of costs out there before you even think of things like cars,
    clothes, food, drink, etc.

    Now also the other thing to remember is that we are very very low unprecedented interest rates, the only way they will go is up.
    Oh and those banks need someone to pay for all the trackers and all the defaulters.
    Guess what the newbies are the ones in line.
    Augeo wrote: »
    Get back to the same level? Why is the boom level relevent, boom house prices were as artificial as boi shares :)

    Didn't you know in housing terms everything is relative to 2007. :rolleyes:


Advertisement