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How much money left after closing

  • 20-08-2020 8:23pm
    #1
    cubatahavana
    Registered Users Posts: 990 ✭✭✭


    I wonder, how much money do people usually have left after securing a mortgage, closing on a property, and paying all the appropriate fees?


Comments

  • #2
    Dav010
    Registered Users Posts: 13,999 ✭✭✭✭Dav010


    cubatahavana wrote: »
    I wonder, how much money do people usually have after securing a mortgage, closing on a property, and paying all the appropriate fees?

    Depends on how much you start with.


  • #3
    cubatahavana
    Registered Users Posts: 990 ✭✭✭cubatahavana


    Dav010 wrote: »
    Depends on how much you start with.

    What I meant by the question is:

    Is it better to go with the lowest mortgage possible, even though it may leave you with little savings?

    Mortgage A: 300000 for a property worth 360000 at 2.7% equals a total cost of credit of 138 k
    Mortgage B: 270000 for the same property and same rate equals a total cost of credit of 124k

    That’s a difference of 14k in interest for the life of the mortgage.

    Do you think it’s worth it?


  • #4
    brisan
    Registered Users Posts: 2,242 ✭✭✭brisan


    cubatahavana wrote: »
    What I meant by the question is:

    Is it better to go with the lowest mortgage possible, even though it may leave you with little savings?

    Mortgage A: 300000 for a property worth 360000 at 2.7% equals a total cost of credit of 138 k
    Mortgage B: 270000 for the same property and same rate equals a total cost of credit of 124k

    That’s a difference of 14k in interest for the life of the mortgage.

    Do you think it’s worth it?

    14K over 20 years is 700 euro a year
    What will 700 euro be worth in 10 years time.
    If you intend to put the 30k into the property or save it for a rainy day then go with the bigger mortgage
    If you intend blowing it on a Vegas holiday then go for the smaller mortgage
    There again a 30k car loan at 2.7% does not make a lot of sense


  • #5
    cruizer101
    Registered Users Posts: 3,205 ✭✭✭cruizer101


    I would say go for the bigger mortgage, have the savings on hand in case some unexpected expenses pop up, there will always be some with a new house.

    If in a year or twos time you still have all the savings you can overpay or just get a new smaller mortgage if you want, that way you will pay a fairly small amount extra interest. Taking the bigger mortgage gives you flexibility and gives you more options.


  • #6
    frankzappa
    Registered Users Posts: 6 ✭frankzappa


    Interested in this as we doing the same mental exercise.
    Let's say you buy a turn-key recently renovated property (hence no immediate maintenance expected), what do you guys think is a good safety margin in terms of savings to keep?
    I will be immediately left with, more or less, 12/18 months of full living cost, saying that me and my partner both lose our job immediately, we would be able to live up to 18 months. I know it is not an exact science, but wondering what do you guys think of that?

    About the OP, i would prefer borrowing more, doing the simple math, if you put those 30k into something that returns 4% on annual basis you would get ~97k after 30 yr, more than 3 times. Just saying..


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  • #7
    brisan
    Registered Users Posts: 2,242 ✭✭✭brisan


    frankzappa wrote: »
    Interested in this as we doing the same mental exercise.
    Let's say you buy a turn-key recently renovated property (hence no immediate maintenance expected), what do you guys think is a good safety margin in terms of savings to keep?
    I will be immediately left with, more or less, 12/18 months of full living cost, saying that me and my partner both lose our job immediately, we would be able to live up to 18 months. I know it is not an exact science, but wondering what do you guys think of that?

    About the OP, i would prefer borrowing more, doing the simple math, if you put those 30k into something that returns 4% on annual basis you would get ~97k after 30 yr, more than 3 times. Just saying..

    The value of your investments can fall as well as rise.
    I would not be borrowing to invest.
    Borrow extra to have a rainy day fund for sure or to put into the house ,but not for investment,holidays or luxury purchases


  • #8
    Bandana boy
    Registered Users Posts: 4,325 ✭✭✭Bandana boy


    I think for the world we live in now where we do not know what covid part two will look like I would be happier with a cash buffer , assuming your fixing for 3 years you can change your mind in 3 years time with very little of the savings lost , but that 30K could be a huge in either bridging a gap in the near future or to invest in the recovery if we see a crash.


  • #9
    woodchuck
    Moderators, Society & Culture Moderators Posts: 15,409 Mod ✭✭✭✭woodchuck


    We've earmarked a chunk of our savings that won't be used towards the deposit (or legal fees etc in relation to buying the house). We have a few reasons for this:
    - We're getting married next year (was supposed to be next month...) so need savings to pay for that, even though it will be a fairly modest affair by Irish standards.
    - Our car is quite old and on it's last legs. We'd prefer not to take out a car loan, so we're keeping money aside for a new second hand car that we might need in the not too distant future.
    - Furniture etc for the new house.
    - And a little extra aside for unforeseen expenses or a rainy day.


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