Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi all! We have been experiencing an issue on site where threads have been missing the latest postings. The platform host Vanilla are working on this issue. A workaround that has been used by some is to navigate back from 1 to 10+ pages to re-sync the thread and this will then show the latest posts. Thanks, Mike.
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Mortgage For Building Questions

  • 31-05-2009 10:54am
    #1
    Triton
    Closed Accounts Posts: 559 ✭✭✭


    I already have a mortgage on one house so I know a bit about mortgages. I now have in for planning and hope to start in the Winter/Spring. However, I am unsure what way mortgages for self building work.

    My present mortgage was based on the loan to value rule. My loan to value was 69% and I got a tracker mortgage (although I am told banks no longer do these).

    For the house to be built and the mortgage for it:
    I plan to go over 30 years
    I already have the site as it is part of my father's farm
    The mortgage will be for my partner and I
    We think the house will cost about 200k to build. We have 30k saved so we aim to get 160k of a mortgage.

    I plan to go and visit my bank but I was hoping maybe I could get a small bit of advice here before I go. Some specific questions I have are:

    1. What way does the mortgage for building work? Do we place a value on the house and then it goes based on loan to value or what way does it work?
    2. Will we be counted as first time buyers because my partner hasn't a mortgage? Or is that option out because I have a mortgage already?
    3. What tye of mortgage options are available? Would we be best going for a fixed rate or a variable etc.?

    Any advice or info in general would be appreciated as I'd like to know a bit before I go to the bank.


Comments

  • #2
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    As part of the application, you will get a valuation done on the property. The valuer will put a value on the site now and also estimate the value of the completed house.

    Many LTV rates have disappeared in recent months, so LTV is probably not as big an issue as it used to be. You can't get an ECB tracker mortgage.

    Once approved, you will draw the loan down in stages as you progress through the build, and you will only have to make repayments on the stages you have actually drawn down.


  • #3
    Triton
    Closed Accounts Posts: 559 ✭✭✭Triton


    ferga_com wrote: »
    As part of the application, you will get a valuation done on the property. The valuer will put a value on the site now and also estimate the value of the completed house.

    Many LTV rates have disappeared in recent months, so LTV is probably not as big an issue as it used to be. You can't get an ECB tracker mortgage.

    Once approved, you will draw the loan down in stages as you progress through the build, and you will only have to make repayments on the stages you have actually drawn down.

    What is the interest rate at the moment? I've looked at AIB and for 160k over 30 years, the payments seem to be 628e. Would that be correct? I think the interest rate is 2.45%.

    How do they place a value on the site/house? Do they look at the plans or what? Or does someone come and visit the site?


  • #4
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    If the final value of the property is >=€320,000, you could get 2.25% (APR 2.28%) variable from AIB but they may put you on a higher rate until completion.

    That would be around €612 per month gross of any TRS and excluding insurances.

    The valuer visits the site and needs to see the plans and planning permission.


  • #5
    Triton
    Closed Accounts Posts: 559 ✭✭✭Triton


    ferga_com wrote: »
    If the final value of the property is >=€320,000, you could get 2.25% (APR 2.28%) variable from AIB but they may put you on a higher rate until completion.

    That would be around €612 per month gross of any TRS and excluding insurances.

    The valuer visits the site and needs to see the plans and planning permission.

    Thanks for the info. We are hoping the planning will be through in late July so we'll wait for then.

    Can we go as first time buyers or can we not because I own a home?


  • #6
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    My understanding is that you won't be First Time Buyers for Stamp Duty purposes as one of you already owned a home. For Tax Relief at Source (TRS) purposes, your partner will be a First Time Buyer and you won't.

    Check that with your solicitor or accountant before taking it as gospel.


  • Advertisement
  • #7
    Triton
    Closed Accounts Posts: 559 ✭✭✭Triton


    ferga_com wrote: »
    My understanding is that you won't be First Time Buyers for Stamp Duty purposes as one of you already owned a home. For Tax Relief at Source (TRS) purposes, your partner will be a First Time Buyer and you won't.

    Check that with your solicitor or accountant before taking it as gospel.

    Does stamp duty apply to when you build a house though? I had thought it wouldn't as we are building and not buying.


  • #8
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    As I say, I'm not a tax expert, but I think that Stamp Duty may apply on the transfer of a site into your name. There are exemptions because it gets transferred from your father, but to avail of them the house may need to be in your name also. Check with your solicitor.


Advertisement