Mortgage for the sake of it

newhouse87 · 19-09-2020 1:35pm #1

HI just wondering, i was going to build a house with my cash but im wondering could i get a mortgage then draw the help to buy scheme money and pay off the mortgage the following year, is this possible or legal? Revenue website not great for such queries. Also is there any scheme for first time buyers who are building using just cash?

Frynge · 19-09-2020 1:41pm

There needs to be a minimum % of the final build cost mortgaged, not sure what the % is, 50 or 70.

You would also have to have the mortgage for a minimum 5 years otherwise there can be a claw back of the HTB.

newhouse87 · 19-09-2020 1:43pm

Frynge wrote: »

There needs to be a minimum % of the final build cost mortgaged, not sure what the % is, 50 or 70.

You would also have to have the mortgage for a minimum 5 years otherwise there can be a claw back of the HTB.

thanks for the reply, it most likely would no be worth it so if i had to keep the mortgage for 5 years id imagine.

Frynge · 19-09-2020 2:35pm

newhouse87 wrote: »

thanks for the reply, it most likely would no be worth it so if i had to keep the mortgage for 5 years id imagine.

If you work the numbers it would probably make sense to use a mortgage.

Envelope calculations;

Build cost €200k
Mortgage €140k
Interest for year 1 €4k
Make an additional payment of €130k in month 13
Payments of €30 each month for 4 years
Interest for years 2-5 €600.
Clear balance of mortgage on month 61 and you would be up €5,400.00ish

I'm sure a broker could go through it better.

newhouse87 · 19-09-2020 2:38pm

thanks, but my point of doing cash was to save on engineers fees etc and backhanders to builders and all which would equal the 5400 at least, by not having a mortgage i don't need an engineer onsite to to sign off at each stage to draw down the mortgage. I presume there is no government subsides are tax breaks by building with just cash?

Frynge · 19-09-2020 2:43pm

newhouse87 wrote: »

thanks, but my point of doing cash was to save on engineers fees etc and backhanders to builders and all which would equal the 5400 at least, by not having a mortgage i don't need an engineer onsite to to sign off at each stage to draw down the mortgage. I presume there is no government subsides are tax breaks by building with just cash?

In that case the yes, steer clear of a mortgage so. Make sure you trust the people getting the cash as we have all heard the horror stories of doing that.

I personally am happy to pay cash for building works in my own home as I would use friends for any major works.

newhouse87 · 19-09-2020 2:49pm

Frynge wrote: »

In that case the yes, steer clear of a mortgage so. Make sure you trust the people getting the cash as we have all heard the horror stories of doing that.

I personally am happy to pay cash for building works in my own home as I would use friends for any major works.

yeah it will be all people i know so reckon its worth using my cash as i dont have any other expenses right now and also its like an investment on the money as will save throughout the course of a normal mortgage, was just trying to see was there any tax breaks or any grants by doing it cash but that was wishful thinking really.

Mortgage for the sake of it

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