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20-10-2019, 10:07   #1
Naos
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Bigger deposit vs bigger mortgage?

House value: 350k
Savings: 100k
Term: 30years

In the scenario above, what value mortgage would you take out?

I can see the benefits in having the lower mortgage (lower overall interest payments) vs benefits in higher mortgage (there will be approx 15k work needed to be done on the house + furnishing).

Open to experience/suggestions on what you have done and why?

Thanks!
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20-10-2019, 10:10   #2
PhoenixParker
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I'd probably go for something like 70k deposit to get the LTV under 80% and get a lower interest rate. That leaves you plenty of wiggle room on the 15k for decor/reno and furniture.

If a bigger deposit doesn't get you a lower interest rate then I'd start with the bigger mortgage and in a year when you've decorated and have furniture sorted reevaluate.
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20-10-2019, 10:11   #3
raxy
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70k deposit, 15k for work on the house & 15k rainy day fund.
You can always pay off additional amounts over the term of the mortgage.
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20-10-2019, 10:11   #4
Creamy Goodness
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Higher mortgage. As you said work needs to be done which you estimate at 15k depending on the work this could rise to €30k.

A mortgage is the cheapest money you’ll get.
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20-10-2019, 10:43   #5
zapper55
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My house needed some minor changes or so I thought. Between realising that something like the boiler needed to be replaced and the increasing cost of tradesmen, 30k will go very quickly. I'd say keep 30k minimum, given my experience I'd keep back 40k.
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20-10-2019, 12:38   #6
johnnyskeleton
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The bank will ask younif the house needs work done, how you will furnish it, and how this will be paid for. So to be honest the bank will probably insist that you keep back enough for all that
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21-10-2019, 14:56   #7
SozBbz
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also you need to factor in all your buying costs,

Stamp duty - €3500
legal fees (inc searches etc) -I'd budget €2500
Survey - Id budget €350-500
Valuation - your bank may pay for this but if not I'd budget €150

We also engaged other specialists in a recent house purchase and spent approx €1000 on professional opinions and reports. That was made up of a survey, damp expert and roof expert as well as the valuation required by the bank.
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24-10-2019, 00:02   #8
zapper55
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Originally Posted by johnnyskeleton View Post
The bank will ask younif the house needs work done, how you will furnish it, and how this will be paid for. So to be honest the bank will probably insist that you keep back enough for all that

Not in my experience I must say.
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24-10-2019, 00:25   #9
wirelessdude01
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Originally Posted by johnnyskeleton View Post
The bank will ask younif the house needs work done, how you will furnish it, and how this will be paid for. So to be honest the bank will probably insist that you keep back enough for all that
Haven't heard this myself. What banks are you aware of that ask for this?
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24-10-2019, 13:36   #10
cruizer101
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The bank will ask younif the house needs work done, how you will furnish it, and how this will be paid for. So to be honest the bank will probably insist that you keep back enough for all that
Got a mortgage a year ago and talked to a few banks and was never asked this.
Might be an issue is there was some sort of significant work needed to make it habitable e.g no running water.
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24-10-2019, 18:45   #11
Sarn
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We held back a sizeable chunk to get the house extended and refurbished, new furniture, appliances etc. You’ll be amazed how work on the house eats money. You could always hold back €50k, see how things pan out and then make a lump sum repayment in the future.
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26-10-2019, 08:36   #12
Naos
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Cheers for all the suggestions & info folks!
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26-10-2019, 08:50   #13
Grumpypants
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No brainer, take the biggest mortgage you can. Get into the house get the work done and if you have cash left over pay it off the mortgage.

You aren't tied to that mortgage for 30 years.

We fixed for 3 years, after that point the house value had gone up and we had paid down enough of a chunk to move from a 3.9% rate to 2.6%.
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26-10-2019, 10:36   #14
Sinister Kid
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No brainer, take the biggest mortgage you can. Get into the house get the work done and if you have cash left over pay it off the mortgage.

You aren't tied to that mortgage for 30 years.

We fixed for 3 years, after that point the house value had gone up and we had paid down enough of a chunk to move from a 3.9% rate to 2.6%.
How does this work? Did you have to get a valuation on the property so the banks would reduce the rate?
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26-10-2019, 10:54   #15
Grumpypants
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How does this work? Did you have to get a valuation on the property so the banks would reduce the rate?
Bank will do the valuation. They just do a general search. Search something like like "4 bedroom house 220m2 in Galway" and get a rough value. That was it. We got under the 60% mark so didn't need to do much more. But i think Ulster bank have a 4 or 5 year fixed rate of 2.6% for a ltv of 80%. Or even a 90% is 2.75%.
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