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Top-Up Mortgage?

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  • 12-02-2008 11:13am
    #1
    Jess11
    Registered Users Posts: 76 ✭✭


    We have a house worth about €590 thousand, with a mortgage of about €100thousand. We have just got planning permission to build a house on our corner site. We will sell the house we are living in and move into the new house. We need to borrow about €300 thousand to build.
    Should we look for a top-up on our present mortgage? Our present mortgage is with IIB and some friends said to look around before we top-up with IIB as there is better value out there. Didn't seem to know where though!
    Can we move our present mortgage of €100 thousand and get an extra €300 thousand with a different institution without too much hassle? Are we likely to get a mortgage of €400 thousand since our present house is worth almost €600 thousand and we are both working?
    Any suggestions as to which institution has the best value at the moment.
    I'm feeling bogged down in all this finance at the moment. Would really appreciate any advice. Jess


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    #2
    Eazy Mortgages
    Closed Accounts Posts: 8 ✭Eazy Mortgages


    It would be easier to raise the money on you existing home than on the one you are going to build. On the remortgage side there is a few companies now offering free legal fees however you will have to leave the mortgage with them for around 5 years or you will have to pay a fee between €500-€1000 depending on the bank.
    The amount of money you can get will differ from bank to bank depending on how many loans you will have after you refinance, the amount of money you both earn and your age. Also if you have missed any payments on any loans before will have an effect on credit history.

    You could also raise the money on the home you are going to build, all the factor's above will still apply. Instead of getting all the money in one go as you would in a remortgage it will be paid in usallly 5 stage payments.

    Hope this helps!


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    #3
    FA
    Closed Accounts Posts: 15 ✭FA


    Your best bet is to keep the borrowing on you own home to a min, if you plan on moving into the new house, release the money from your existing home to build.

    If you build the new house and the property market drops a bit more, would it be the best time to sell. If you kept the house and rented it until the market picked up a bit, you might make a lot more. You should try to avoid selling in a falling market, things will pick up in the medium term.
    If this happened and you had no mortgage on the property you were renting, the rental income it taxable at 40%. If you have a mortgage on the property you could offset the rental income against the mortgage interest, and you get to keep it all.

    The mortgage interest rate depends on you circumstances, IIB are not the cheapest.

    If you want further info let me know


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    #4
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    It's all about the repayment capacity. You'll get any mortgage you like if you are able to pay it back. I would guess that a 400k mortgage would cost up on 2.5 - 3k to service, perhaps slightly less if you wanted to go interest only for a period of time. The question is can you meet these monthly repayments?


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