Applying for a second mortgage

lucky14

Applying for Second Mortgage
this is my story.... a few years ago my sister and I bought a house together,well she did really.But needed me to help her get the mortgage.I never contributed to the house in anyway at all.
I'm in a position to buy now....
I work in the public sector and earn €50 K a year.(even though I'll be losing €4,000 a year of my disposable income due to all the levies implemeted).
Even though technically
I'm a first time buyer,I won't be seen as one..
-Will I qualify for a mortgage 5/6 times my salary?
-Will I need a bigger deposit than first time buyers to secure my mortgage(most banks offering 92% to 1st time buyers)

Also will I encounter extra tax implications as technically this is my second property

ntlbell

lucky14 wrote: »

-Will I qualify for a mortgage 5/6 times my salary?
-Will I need a bigger deposit than first time buyers to secure my mortgage(most banks offering 92% to 1st time buyers)

hopefully to save yourself from yourself they won't offer 5/6 times and more like 2.5/3 times

Regarding the deposit it might depend on how much equity is in the other house.

if it's negative then you'll more than likely need the deposit

astrofool

Losing your FTB status due to buying one with your sister means you face paying stamp duty (+6% on the house price) on all but new builds. Are you legally accountable for the mortgage on your sisters house also?

What you can borrow will be based on what your disposable income is, usually ascertained by your bank accounts. Multiples are a rough way to see what you can borrow (using an online calculator), but don't really have much bearing in the real world anymore (where a tax hike will affect your ability to pay).

lucky14

Yes unfortunately I am accoutable for my sister's mortgage.She also remortgaged last year for a larger amount.I was advised by my solicitor on this matter at the time.


-2.5/3 times my salary will get me nothing in Dublin(even with price reductions)

fearandloathing

are you planning on keeping this mortgage with your sister and applying for another one by yourself?

if this is the case you will have some difficulty with securing funding from most lenders given the current climate. at the moment the banks are really opposed to lending to anyone who they thing might be overstretched in any way and definately someone looking for a second mortgage where he/she is already committed to a presumably (if you bought a few years ago) large mortgage would be enought reason to decline an application.

if i were you id apply to your current mortgage lender to have you taken off the mortgage as your sister has proved she can repay on her own (you stated you never contributed to the house). then apply for your mortgage with a clean slate. your ftb status is gone so you are liable for stamp duty. % wise, you can apply for up to 92% regardless of your tax status but the lower the ltv the stronger the application.

ntlbell

lucky14 wrote: »

-2.5/3 times my salary will get me nothing in Dublin(even with price reductions)

sure it will 3 bedroom house in tallaght 99k

if you're a bit more fussy, you'll just have to wait.

if you can't afford what you want, rent it.

lucky14

Thanks for all your help.It's been great to get.

I'm not sure if it's even an option for me to be taken off the mortgage.As she remortgaged last summer I had to summit all my details.
(the house was bought in early 2003 when houses were much lower)

Hopefully I can be taken off the mortgage,as this would be great.
She's engaged now.but they going to use her house as the marriage home.And lease his house.As he will lose money on his house if he sells.

Tallaght is very far away.I probably am fussy.I've lived in Dublin 7 and Dublin 15 for years and is near family.I've only had to do a 20 minute drive to work to town!!!

fearandloathing

contact your bank, write a letter outlining your position and request to be taken off the mortgage. this basically involves your sister submitting an application in her sole name(or with another co-borrower). the bank will assess whether she has the capacity to repay in her own right and if everything meets criteria they will release you from the mortgage. sounds easy, i know!! its well worth trying though, i work in the lending business and despite what the media tells you there is some scope still there to do business with banks if you go about it the right way.

best of luck.

lucky14

Cheers for that!!
That's great to hear that re the banks

ntlbell

lucky14 wrote: »

Tallaght is very far away.I probably am fussy.I've lived in Dublin 7 and Dublin 15 for years and is near family.I've only had to do a 20 minute drive to work to town!!!

no worries.

1 bed apt's in dub 15 start around 129k

who_ru

ntlbell wrote: »

no worries.

1 bed apt's in dub 15 start around 129k

i wouldn't pay 129 euro for a 1 bed in d15. property suicide. never ever ever be able to sell it on.

ntlbell

who_ru wrote: »

i wouldn't pay 129 euro for a 1 bed in d15. property suicide. never ever ever be able to sell it on.

Nor would I.

I'm merely pointing out affordability in the area the OP wants to buy

Firetrap

OP. You might be as well to hold off on getting a mortgage for a while. You might be on €50k now but don't bet on being on that this time next year or two years time. I'm not attacking public servants here but there are rumours of a Benchmarking III which could reduce your wages further. Who's to say either what extra taxes/levies the government might bring out in the next budget?

Besides that, there are plenty of people who believe that property prices have a bit to fall yet. You could say that rent is dead money but so too is buying somewhere for tens of thousands more than you could have bought it for 12 months later.

who_ru

Firetrap wrote: »

Besides that, there are plenty of people who believe that property prices have a bit to fall yet. You could say that rent is dead money but so too is buying somewhere for tens of thousands more than you could have bought it for 12 months later.

the vast majority of irish people cannot contemplate this logic. it's alien to them. for them rent is and always will be dead money regardless of the fact that they could save themselves 1000's of euro by renting instead of buying in a falling market.

Kipperhell

It sounds like you need to talk to your sister. Effectively she is using your credit history and income to trick the bank to giving her money. If you explain to the bank your situation your sister may experience some problems.

The banks will look at you technically and that means you have liability of a mortgage in place. I am guessing your name is on the deeds which means at some point you will have to "sell" it to your sister which will incur stamp duty. You may get caught for capital gains on any profit. It may be advisable to do this if you are currently at a loss to avoid CGT. Regardless of your purchasing you need to sort this out. Negative equity might actually save you money.

I am not sure about this but I would think this is how it would work. You really need to clarify things with your solicitor. I always find if you don't ask the questions they often miss something.

lucky14

Thanks Kipperhell,
I was wondering how that would work in regard the deeds and the selling of it.Luckily for my sister the house is still worth more than she bought it.And I don't think it'll reach the price she bought it for in 2003.

ntlbell

lucky14 wrote: »

Thanks Kipperhell,
I was wondering how that would work in regard the deeds and the selling of it.Luckily for my sister the house is still worth more than she bought it.And I don't think it'll reach the price she bought it for in 2003.

out of interest how does she know how much it's worth?

lucky14

Well,when she remortgaged last year.It was valued at €495,000 over double the price she bought it for.
No doubt it has come alot since.
Houses(same type as hers) around her are asking for anthing from €400,00 to €350,000 at moment.
I know a house near by,got an offer for €320,000.
Still over a €100,000 more that what she paid