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Saving/Applying for a mortgage 2015/16/17/18/19

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    #6272
    ELM327
    Registered Users Posts: 21,458 ✭✭✭✭ELM327


    TheShow wrote: »
    You wouldn't as you are not a farmer, but you also wouldn't get the remaining 8 acres on a residential mortgage. Could probably look at a variable rate Personal loan for the 8 acres with the land as security, but rates would be a lot more than a mortgage rates and over a shorter term which could make it too expensive to finance.
    I was told by the bank that I would have to apply for a farm loan if I wanted to buy a house exceeding the 5 acre limit.
    So you can take that "you wouldn't as you are not a farmer" and put it somewhere else, because that's what was told to me and I'm most certainly not a farmer. The opposite.


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    #6273
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    ELM327 wrote: »
    I was told by the bank that I would have to apply for a farm loan if I wanted to buy a house exceeding the 5 acre limit.
    So you can take that "you wouldn't as you are not a farmer" and put it somewhere else, because that's what was told to me and I'm most certainly not a farmer. The opposite.

    they were just fobbing you off.


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    #6274
    ELM327
    Registered Users Posts: 21,458 ✭✭✭✭ELM327


    TheShow wrote: »
    they were just fobbing you off.
    That's funny, because I went with the same bank for a similarly priced property in the end.


    You're just not making sense here.


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    #6275
    Bawnmore
    Registered Users Posts: 1,740 ✭✭✭Bawnmore


    Spoke to the bank and it might be a problem alright. Thanks for the heads up Cows Go µ. Bank manager has suggested that we let the valuation continue, and he's looking into what we can do.

    Spoke to the auctioneer and he suggested we could possibly buy the house with 2 acres if it's going to be an issue but I'm not sure what's involved in that. We haven't much interest in the land or any use for it, so it's more so just something that was there and we hadn't put any thought into.


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    #6276
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    ELM327 wrote: »
    That's funny, because I went with the same bank for a similarly priced property in the end.


    You're just not making sense here.

    did it have more than 5 acres attached?

    The point I was making is that if you're not a farmer, how could you be expected to apply for a farm loan and produce accounts etc. thats not practical.
    You cant put a consumer down a commercial loan route unless they intend to make an income from the land. You can finance the land by way of loan but if you are a consumer then it would be by way of a personal loan, governed by CCA.


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    #6277
    z0oT
    Registered Users Posts: 740 ✭✭✭z0oT


    Question for people here:

    When you get to the stage of signing the contracts and paying the deposit how much do you typically pay? Is it the 10% if a First Time Buyer?

    If you have a higher deposit saved up in excess of the 10%, when would you pay the remainder above that? Is that done at the draw down stage?

    I presume whatever extra savings you have when you draw down can be added to the funds coming from the bank.


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    #6278
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    z0oT wrote: »
    Question for people here:

    When you get to the stage of signing the contracts and paying the deposit how much do you typically pay? Is it the 10% if a First Time Buyer?

    If you have a higher deposit saved up in excess of the 10%, when would you pay the remainder above that? Is that done at the draw down stage?

    I presume whatever extra savings you have when you draw down can be added to the funds coming from the bank.

    At signing contracts you are normally paying 10% of the purchase price, which will include any funds you paid as a booking deposit.

    The rest will be required when the solicitor is sending funds to the vendor to complete the purchase.

    The solicitor just asked us for all the funds required to close sale, pay fees and stamp duty. We sent her the whole lot and she sorted it all out.


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    #6279
    Toyotafanboi
    Registered Users Posts: 12,917 ✭✭✭✭Toyotafanboi


    Toyotafanboi wrote: »
    Solicitor got back to us and said we are on track for keys this day next week!

    Got they keys 2 weeks ago. Paid holding deposit to the EA on March 16th, felt like an eternity.

    Havn't made too many posts on here but done a lot of reading so thanks to you all for some great advice along the way and good luck to everyone else still in the process.

    Now just a full top to toe renovation to contend with, we'd like to be living in the house within 12 months so expect plenty of posts ahead :pac:, heating, plumbing, wiring, insulation, kitchens, bathrooms, garden etc etc.


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    #6280
    Glen_Quagmire
    Registered Users Posts: 1,137 ✭✭✭Glen_Quagmire


    There are houses I'm interested in being released in early September.

    I'm am currently gathering the necessary documents to give to my broker to start looking for mortgage offers and also going through the HTB process.

    Problem is I am not officially out of my 6 month probation on a new job (same industry and role) until mid September.

    What options do I have to secure one of these houses when they are released early September or is it a lost cause?


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    #6281
    myshirt
    Registered Users Posts: 5,245 ✭✭✭myshirt


    Glen_Quagmire wrote: »
    There are houses I'm interested in being released in early September.

    I'm am currently gathering the necessary documents to give to my broker to start looking for mortgage offers and also going through the HTB process.

    Problem is I am not officially out of my 6 month probation on a new job (same industry and role) until mid September.

    What options do I have to secure one of these houses when they are released early September or is it a lost cause?


    Not a lost cause, but you will be cutting it tight. You can give the booking deposit. By the time they want the balance of the 10% you'll be out of probation. If you are not, then you get your booking deposit back.

    Your issue is going to be will the estate agent take the booking deposit off you if the next guy in the Q doesn't have these problems, but I'd say your grand as long as you are not looking in Dublin 15.


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    #6282
    Glen_Quagmire
    Registered Users Posts: 1,137 ✭✭✭Glen_Quagmire


    myshirt wrote:
    Not a lost cause, but you will be cutting it tight. You can give the booking deposit. By the time they want the balance of the 10% you'll be out of probation. If you are not, then you get your booking deposit back.

    myshirt wrote:
    Your issue is going to be will the estate agent take the booking deposit off you if the next guy in the Q doesn't have these problems, but I'd say your grand as long as you are not looking in Dublin 15.


    Do I not have to have a mortgage offer before giving the booking deposit?

    Do the estate agents look for proof of mortgage approval when putting down the booking deposit?


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    #6283
    Glen_Quagmire
    Registered Users Posts: 1,137 ✭✭✭Glen_Quagmire


    Another question, I work full time and my partner works part-time, her contract is currently 12 hours a week but typically does around 20 hours.

    Will her 12 hour a week contract be an issue with the banks getting a mortgage?


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    #6284
    drinkingwater
    Registered Users Posts: 128 ✭✭drinkingwater


    Glen_Quagmire wrote: »
    Do I not have to have a mortgage offer before giving the booking deposit?

    Do the estate agents look for proof of mortgage approval when putting down the booking deposit?

    I believe you can get mortgage approval while on probation but won't be able to draw down the money until you made permanent.

    They usually do look for some kind of approval, but an AIP might be sufficient


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    #6285
    awec
    Administrators Posts: 53,398 Admin ✭✭✭✭✭awec


    AIP is what they look for when giving the booking deposit, because AIP is all you can have at that stage of the process. The next step after AIP is official loan offer and that is given against a specific property.


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    #6286
    Frank Castle
    Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    Got AIP and current have a Valuation booked.

    Need Life insurance or mortgage protection now for the loan offer. Any advice on which to go for?


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    #6287
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    Frank Castle wrote: »
    Got AIP and current have a Valuation booked.

    Need Life insurance or mortgage protection now for the loan offer. Any advice on which to go for?

    mortgage protection runs the course of the mortgage only and should be the cheapest option.
    It really depends on what you want, if you're just looking for the cheapest option and not concerned about financial planning, then go for mortgage protection.
    If you think you need something else then go speak to a financial broker.


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    #6288
    Frank Castle
    Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    TheShow wrote: »
    mortgage protection runs the course of the mortgage only and should be the cheapest option.
    It really depends on what you want, if you're just looking for the cheapest option and not concerned about financial planning, then go for mortgage protection.
    If you think you need something else then go speak to a financial broker.

    Thanks, was really looking to see if there was any reason to go with life insurance over mortgage protection but can't justify it myself.

    I'll just plow on with the mortgage protection and get the loan offer asap.

    On another note, I've had a great experience with TSB. first walked in to look for AIP 2 weeks ago, and already are at valuation stage. No problems with them re: help to buy, and a part gifted deposit. Minimal savings of our own, but all rent payments are shown. Also have taken out a personal loan and a new car on pcp within the last 6 months.
    None of this has been an issue with TSB, they have been great to work with so far. (helps that all our banking is through TSB too).


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    #6289
    hanaimai
    Registered Users Posts: 207 ✭✭hanaimai


    Frank Castle wrote: »
    Thanks, was really looking to see if there was any reason to go with life insurance over mortgage protection but can't justify it myself.

    I'll just plow on with the mortgage protection and get the loan offer asap.

    On another note, I've had a great experience with TSB. first walked in to look for AIP 2 weeks ago, and already are at valuation stage. No problems with them re: help to buy, and a part gifted deposit. Minimal savings of our own, but all rent payments are shown. Also have taken out a personal loan and a new car on pcp within the last 6 months.
    None of this has been an issue with TSB, they have been great to work with so far. (helps that all our banking is through TSB too).

    Just wondering from your post, did you have a property already sale agreed before you had AIP? I note in the above that you got AIP and then immediately went to valuation in a short period of time.


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    #6290
    Frank Castle
    Banned (with Prison Access) Posts: 134 ✭✭Frank Castle


    hanaimai wrote: »
    Just wondering from your post, did you have a property already sale agreed before you had AIP? I note in the above that you got AIP and then immediately went to valuation in a short period of time.

    We knew what house we wanted and put down a booking deposit the day after we applied for AIP based on verbal approval (new build house). Underwritten AIP came through 3 days after we applied.

    Rang the bank when we got the letter and told them about the house, they organised the valuation. Slowest thing so far is having the estate agent pass the details on to our solicitor.


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    #6291
    Liam McPoyle
    Closed Accounts Posts: 14,846 ✭✭✭✭Liam McPoyle


    In terms of renting out a property, what's the tax liabilities?

    I know the rate is 52% but 52% of what?

    Say we rent out our place to someone for €1000 a month and the mortgage is €750. Are we liable for tax on the full amount or on the excess after expenses ie €250?

    Tks.


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    #6292
    autumnbelle
    Registered Users Posts: 1,162 ✭✭✭autumnbelle


    Business Cat wrote: »
    In terms of renting out a property, what's the tax liabilities?

    I know the rate is 52% but 52% of what?

    Say we rent out our place to someone for €1000 a month and the mortgage is €750. Are we liable for tax on the full amount or on the excess after expenses ie €250

    Tks.

    Your only allowed 75% of the interest and then any expenses related to the property ie repairs


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    #6293
    Liam McPoyle
    Closed Accounts Posts: 14,846 ✭✭✭✭Liam McPoyle


    autumnbelle wrote: »
    Your only allowed 75% of the interest and then any expenses related to the property ie repairs

    So 75% of the €750 above would be tax free plus any expenses? Would something like managing agent fees be considered an expense?


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    #6294
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,050 Mod ✭✭✭✭AlmightyCushion


    Business Cat wrote: »
    So 75% of the €750 above would be tax free plus any expenses? Would something like managing agent fees be considered an expense?

    It's 75% of the interest not the mortgage payment. You need to work out how much of the €750 is interest first.


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    #6295
    Liam McPoyle
    Closed Accounts Posts: 14,846 ✭✭✭✭Liam McPoyle


    AlmightyCushion wrote: »
    It's 75% of the interest not the mortgage payment. You need to work out how much of the €750 is interest first.

    Soz, I'm having trouble understanding.

    :o

    In simple terms

    Mortgage payment is €100

    Interest on that is €40

    75% of that is €30 So we wouldnt have any liability for that €30.

    The remaining €70 would be subject to 52% tax.

    Is that right?


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    #6296
    TheShow
    Registered Users Posts: 1,157 ✭✭✭TheShow


    Explain it another way.
    The rental income is taxed at 52%.
    However, you are allowed expenses before you arrive at the final figure.
    You get 0% relief on the capital cost of your mortgage repayment.
    You get 75% relief on the interest cost of your mortgage repayment.
    Then any other expenses such as management fees or other costs related to maintaining the property etc are allowable at 100%.

    You pay tax on the net sum at the requisite rate.

    So it’s not just the difference between rental income and mortgage payment that you pay tax on, it’s the whole rental income essentially, less deductions.


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    #6297
    catrionanic
    Registered Users Posts: 2,091 ✭✭✭catrionanic


    Business Cat wrote: »
    Soz, I'm having trouble understanding.

    :o

    In simple terms

    Mortgage payment is €100

    Interest on that is €40

    75% of that is €30 So we wouldnt have any liability for that €30.

    The remaining €70 would be subject to 52% tax.

    Is that right?

    You're not being taxed on your mortgage repayment (€70). You're being taxed on your rental profit.

    Rent is 500 per month. You can deduct any expenses from this before you calculate your tax due - so in your example, you can deduct the €30 relating to the interest portion of your mortgage repayment. You cannot deduct the full €100 Mortgage repayment.

    You can also deduct other expenses, such as upkeep of the property, landlord insurance. Let's say these other expenses amount to €50 a month.

    So you deduct €30 and €50 from your monthly rental income of €500. You get €420. This is when you apply the tax rate of 52% (assuming you are a higher rate tax payer). All other costs, which aren't tax deductible e.g. the remaining €70 Mortgage repayment, have to be funded with what is left after tax. And then what is left after that will go into your pocket.


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    #6298
    AppleBottle
    Registered Users Posts: 1,421 ✭✭✭AppleBottle


    While you can claim the mortgage interest, as of 1 January 2017, you can now claim 80%. It was 75% before this. Just a little more back for you :)


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    #6299
    z0oT
    Registered Users Posts: 740 ✭✭✭z0oT


    Just heard from our solicitor today, contracts are to arrive from the developer's solicitor in the next 1-2 weeks. The Bank and the Agent have been in touch with their office just now.

    The Bank has issued our Letter of Offer too, it'll probably be in the post when I get back home today.

    Question - What has to be done with the Letter of Offer in order to be ready to sign the contracts? You obviously have to sign it to accept it I'm guessing, do they request any additional documents at the Letter of Offer stage?

    I know Mortgage Protection and Home Insurance will be required, but I'm assuming they have to be in place by draw down not immediately?


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    #6300
    GaGa21
    Registered Users Posts: 652 ✭✭✭GaGa21


    So just heard from broker today that bank has decided no mortgage due to location of the house....the commute deemed unsustainable.
    What can we do....so far in the process.....i can't believe it. To have to start from scratch again....i don't know how to tell the sellers...


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    #6301
    Geuze
    Registered Users Posts: 13,100 ✭✭✭✭Geuze


    Business Cat wrote: »
    In terms of renting out a property, what's the tax liabilities?

    I know the rate is 52% but 52% of what?

    Say we rent out our place to someone for €1000 a month and the mortgage is €750. Are we liable for tax on the full amount or on the excess after expenses ie €250?

    Tks.

    Income tax rates in Ireland are 20% and 40%.

    USC may also apply to net rental profits.


This discussion has been closed.
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