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Buying second house with fiancée

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  • 08-04-2009 8:50pm
    #1
    tevion
    Registered Users Posts: 104 ✭✭


    I bought a house 3 years ago under the affordable housing scheme for 150K.
    I have 20K paid off the principal so I still owe 130K on the mortgage so am paying 720 euro pm and have 22 years left approx.
    The value of the house has dropped significantly as one would imagine, and is currently not worth any more than 150K.
    I would like to buy another house with my fiancee in a nicer area and possibly let my existing house.
    She currently lives with her parents.
    I earn 42K and she earns 33K per annum.
    Between us, we can save approx 1800 per month, I can save 1100 and she can save 700 pm.
    We both have 25K each saved.
    I am wondering if the bank will allow me take on another mortgage, given the fact that I already have one, or would we be in a better position to apply for a mortgage if I sold my existing house, even though I would prefer not to?
    Any advice would be appreciated.


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    #2
    astrofool
    Registered Users Posts: 16,645 ✭✭✭✭astrofool


    I'm sure there are conditions against buying a second house during the clawback period on an affordable house. You are talking about turning your first house into an investment, and buying a new house, the bank will likely lend you significantly less than if you didn't have a mortgage hanging over you.

    Simplest solution is to give a mortgage broker a ring, and they will figure out each situation for you and how much you can borrow, e.g. keep house, sell house. They have to know that it is an affordable house for the calculations to be correct.


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    #3
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Not trying to be smart, but I don't think the affordable housing scheme is for wealthy couples who can afford a second home.


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    #4
    tevion
    Registered Users Posts: 104 ✭✭tevion


    Well I certainly am not wealthy and neither is herself.
    I bought the place on my own a while back when I couldnt afford anything else, and I really regret it to be honest, because the area is horrible.
    Since that, my circumstances have changed, and I now want to buy a place with my OH.


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    #5
    toodelies
    Registered Users Posts: 80 ✭✭toodelies


    Hi there,

    You are supposed to use the AH property as your principal private residence under the affordable housing rules and you cannot rent it out. the first step would be to contact the Council and see if you can buy out their share in the property and convert it into a privately owned property. if you can do this then you can show the bank you are applying to that you own the property without encumberances other than the mortgage thats on it and that you intend to rent it. you will have to show them the amount that the property could bring in rent and they will factor this into their calculations when deciding how much you can borrow.

    good luck with it


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    #6
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Someone on here not long ago mentioned that they bought out the council's share effectively for nothing since the value had fallen to the price they originally paid.


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    #7
    tevion
    Registered Users Posts: 104 ✭✭tevion


    SkepticOne wrote: »
    Someone on here not long ago mentioned that they bought out the council's share effectively for nothing since the value had fallen to the price they originally paid.

    thats a good idea, must look into that, at least I would be free from their rules then.


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