The finer points of 100% Mortgages

timeout

Now have the statment of what I can get and have been looking at houses but I just want the finer terms and conditions of the 100% mortgage, the kind I can't really be asking the bank about. So if someone could point me in the direction of the possible answers or have them all the better.

Questions like:
I know I can't sell the house within 5 years of the purchase and I am allow to rent a room but what about not living there and renting the whole thing? I mean the house value would be excempt from stamp duty wether I was investor or first time buyer but is it allowed and if not what kind of peneltys am I likly to see?

Actually that is the main one I don't really have anymore at present

Thanks
Timeout

MorningStar

WHo is stoping you from selling and who is stoping you renting a room.

I can vaguely get the no sale clause from the bank of 100% mortgages. They can't stop you renting a room in fact you can get tax free income from this. I think that would be you can't base you mortgage application on renting a room.

If you rent out the house do not forget you have to register your tenants, you pay tax on the income, you get tax relief on interest, on average a house is only rented 10 months a year and you have to budget to replace things like washing machines. Renting property is work

Andrew Duffy

If you claim any owner-occupier stamp duty exemption on a property purchase, including the total exemption on most new property, and rent it out within five years you must pay the entire difference between what duty you paid and whay would have been due as an investor.
100% mortgages are not advanced to investors, so the bank may have a problem with you renting the entire property. Mine certainly doesn't have any restrictions on sale other than the penalty for breaking the first year fixed rate, but that's not the same thing.

timeout

Ok, I kinda knew I could rent it out and claim tax off, so thats good to have confirmed but i'll have to look more into the details. Then again I could rent it and not tell anyone but thats not looked favourvly on and no benifit if I can claim tax back.

Andrew Duffy wrote:

Mine certainly doesn't have any restrictions on sale other than the penalty for breaking the first year fixed rate, but that's not the same thing.

Ok so If i want to sell in 3 years we say, is that allowed?

Victor

timeout wrote:

Ok so If i want to sell in 3 years we say, is that allowed?

You can sell (it is your house after all), but you may face a claw-back of the stamp duty reduction and face a fee from your bank if you are in a fixed rate mortgage.

Andrew Duffy

There is no stamp duty clawback if a property is sold within five years, only if it is rented.

http://www.oasis.gov.ie/housing/buying_a_house_or_flat/stamp_duty.html

timeout

Thanks lads, for that. I'll take a look at the tax benifits now on the revenue and oasis sites.

Timeout