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Can having a guarantor with property as collateral help increase the amount a bank wi

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  • 12-08-2018 11:28pm
    #1
    hdaniel2893
    Registered Users Posts: 7 ✭


    So I am a single 25 year old who just finished a degree in IT and I am starting a 40k job in financial services software in Dublin
    The idea of purchasing a 2 bedroom apt in the city and renting out the 2nd room while I live there seems like it could be a great setup.
    I can be lent the 25k deposit on a 250k property.In an area where i can get 900-1100 pm for the 2nd room.They are obviously not going to give me a mortgage of 225k on a 40k salary(I do obviously expect my salary to raise to 60-80k over 5-7 years over time but now it's 40k)
    My singlr mother other owns outright with no mortgage our family home worth about 400k and she is willing to be a guarantor and put the house as collateral.She is 60 and makes 45k a year in a permanent job.After I move out there will still be one dependant child living in the family home.
    With the current rules would the bank give me a 225k mortgage based on this?


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    #2
    GingerLily
    Registered Users Posts: 4,767 ✭✭✭GingerLily


    Do banks do guarantors anymore for residential mortgages?

    Besides that - 225k is above the 3.5 LTI CBI rule and above the 5 max also, so you cannot get that mortgage as single applicant. Have you calculated the repayments?

    I don't know if any of the banks are interested in collateral of another residential house - it's so hard to repose in this country, it would mean almost nothing.


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    #3
    Creamy Goodness
    Registered Users Posts: 26,556 ✭✭✭✭Creamy Goodness


    GingerLily wrote: »
    Do banks do guarantors anymore for residential mortgages?

    Gone the way of the tracker mortgage. Dead as a dodo.


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    #4
    DubCount
    Registered Users Posts: 1,067 ✭✭✭DubCount


    Maybe check with a mortgage broker.  What I have heard is that banks no longer accept a guarantor as it is too difficult for them to enforce the liability on the guarantor in court.


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    #5
    davo10
    Closed Accounts Posts: 6,926 ✭✭✭davo10


    Asking/allowing your mother to be gaurantor on such a big mortgage is a huge risk. If you lose your job/tenants stop paying rent or are unable to make the repayments, then your mother becomes liable for the debt for the rest of its term. Worst case scenario, the only collateral she has would be her home, which would be at risk if you can't make repayments. Don't do it, it's not fair to her.


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    #6
    Momento Mori
    Registered Users Posts: 85 ✭✭Momento Mori


    I would like to know in what area you can buy a 250k property that would justify 900-1100 rent for a room?


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    #7
    atilladehun
    Registered Users Posts: 1,566 ✭✭✭atilladehun


    From my experience the banks won't give you a mortgage if your deposit is a loan from anyone else including credit union or family. It means you have too many liabilities.

    What they want to see is the regular amount going into savings showing you will be able to continue to pay.


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    #8
    q85dw7osi4lebg
    Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    You'll need to be permanent for at least a year for most banks to give you a mortgage. They will take her as a guarantor to secure the loan but they won't give you any more finance because of it.


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    #9
    hanaimai
    Registered Users Posts: 207 ✭✭hanaimai


    As other posters have said, I don’t believe banks are too open to idea of guarantors anymore. However, even if you could get your mother to be the guarantor, the lending limits still apply (i.e. 3.5 times your income) so that’s not going to solve that problem for you.


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    #10
    GingerLily
    Registered Users Posts: 4,767 ✭✭✭GingerLily


    April Damp Man wrote: »
    You'll need to be permanent for at least a year for most banks to give you a mortgage. They will take her as a guarantor to secure the loan but they won't give you any more finance because of it.

    Who will? Which banks? Very curious!!


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