Questions about getting a mortgage - please help!

leahyl

Hi all

I am a 25 year old female who is thinking seriously about buying a house but wondering whether it is really a good idea and could I even GET a mortgage. Here's some details:

- working in administration in the public sector - full time permanent job. Will be in the job 3 years next month.
- earning 25k gross per annum - I am due to get an increment next month but with the levys etc it will prob just end up balancing out so I'll still have roughly the same salary
- have roughly 18.5k in savings
- saw a house very near my family home on daft that has dropped from 265k to 240k to 195k in the space of 3 months or so.

I guess my question is do you think based on the above would I be able to get a mortgage at all never mind for the house I mentioned? Also this house needs a LOT of renovations - it says on the ad it's structurally sound but from the pics it def would need a lot of redecorating and renovation. Do people think I could get the house for less or am I wasting my time even thinking about it?

I don't know whether I should wait longer and see if prices go down more - am I mad to be looking to buy at 25? Like I don't know would this mean the end of any sort of social life but then I don't want to be there in a few years time regretting not buying!

Sorry a million questions here!

I'd appreciate any responses

Eglinton

The maths don't add up.

The most any bank will probably offer (if they offer) is 4.5 times your annual salary. Coupling this with your savings means max purchasing power of 131K which is obviously way below the asking price of said house. This is not to say the house won't drop further. But realistically it is a long way to go. You also have to factor in furnishings, legal costs etc. etc. You also mention the house needs a lot of renovation - This is potentially 10s of thousands more depending on the requirements.

At the moment you cannot afford this house. However house prices are only going one way at present. Wait and save. You're young and and things can only get better for purchasers.

dory

leahyl wrote: »

Like I don't know would this mean the end of any sort of social life but then I don't want to be there in a few years time regretting not buying!

Basically, yes to the social life question and a resounding no to the regret part.

How much would re-payments be per month? And how much is your net salary per month? What happens if you get put on a 4 day week? And then if interest payments go up?

Simply put, you can't afford a house of that price with your salary. You would constantly be worrying about insurance/tax/water fees. It's not worth the hassle when prices are still falling.

ricman

Prices are falling,wait another year ,save as much as you can.Theres even 2 bed apartments going for 120k, look on www.daft.ie
An apartment would be better for your budget, check the service charges.Dont buy in a block with half the units empty.Top floor corner, is best for security ,quieter ,no one lives above you, search on daft ie, 130k max, theres houses going for 120k, 2bed northside, terrraced.
ITS likely interest rates will go up in the next 2 years.your budget should be 120k or less .

Treehouse72

Everything - your salary, the state of the housing market, the loan-to-value required, the lending multiple required, the un-renovated house - screams that this is a terrible idea, and most probably an impossible one to pull off.

Walk away.

royaler83

I know a guard looking for a 180-200k mortgage, dunno what money she's on, was told she needed 30k in savings before they'd even consider her!!

Treehouse72

Not trying to start a row, but that's 3 people in this thread mentioned with respect to getting a mortgage and all are public sector workers. A not uncommon pattern to many other threads in this forum.

I don't think this suggests that PS workers are the only ones with questions about mortgages, but rather that they appear to be the only ones even in with a shout of getting one.

shinnerssc

Treehouse72 wrote: »

I don't think this suggests that PS workers are the only ones with questions about mortgages, but rather that they appear to be the only ones even in with a shout of getting one.

Why do you think that Treehouse?

dory

shinnerssc wrote: »

Sorry to hijack the thread with my own question but instead of starting a new one!

I'm a 24 year old teacher. I'm permanent earning 40k, I do some after school and summer work that works out at an extra 3k ish. My partner is 24 he is temporary but due to made permanent in a few months with the HSE he has presently on reduced hours (he has returned to college) and his salary is approx 18k but this will go to 30k in a year's time when he is back to full time hours. We have no loans or debts and are both first time buyers. Just wondering what people think about our chances of getting a mortgage are/what amount we might get? We weren't planning on buying for a while but a home in our area has been on sale for a number for years and is a steal, if we don't act now it could be another few years before we can something of similar size and value.

What kind of deposit will you have? Also, the bank won't care about the 'he will have more money soon' thing. They want to see proof of him getting good money consistently.

gcgirl

I'd wait for a few years NAMA have yet to release houses on their books which is still keeping prices up on what's left out there. Unless you want to know what negative equity feels like

Firetrap

OP, don't let the fact that a house which you think is coming into your price range panic you into buying. It looks like it's out of your price range anyway and god only knows what renovating it could cost :eek: I'm sure it's not the only house which will ever come up for sale in your area so don't let your desire to have your own place cloud your thinking.

If you've never used this before, it's an interesting exercise in number crunching.
http://www.drcalculator.com/mortgage/

Treehouse72

shinnerssc wrote: »

Why do you think that Treehouse?

I don't want a fight or to derail the thread. So one sentence reply: I am simply making the point that if you want evidence for how hard it is to get mortgages, just look at the over-representation of PS workers in these threads, indicating that cast-iron job security is the big criteria for the banks.

My last word on the subject in this thread.

leahyl

Hi guys

Thanks a million for all the responses. To be honest i know that i would not get a mortgage for that house i mentioned - i mean that's ridiculous really. I guess what i was saying was would i even be able to get a mortgage of any kind?

Also my parents are willing to give me a hand also and said they would be willing to go as guarantor but like i don't know would i feel comfortable with that (for them i mean).

I was thinking alot about it since i posted this thread and i think i will probably end up waiting another few years because surely the prices will have to fall further cos nobody is buying. I think it's probably wise to save a lot more and then maybe in 2 years time i will be more 'ready'.

Thanks again:)

dory

I think that's a great plan. I'm the same age as you, and would also love my own place. But it's just not a good time to buy. At least wait until NAMA has kicked in properly see if that causes prices to drop again.

D3PO

shinnerssc wrote: »

My partner is 24 he is temporary but due to made permanent in a few months with the HSE .

sorry to burst your partners bubble but hes not due to be made permanent in a few months. Theres on ongoing hiring freeze in the HSE and that aint changing any time soon.

D3PO

shinnerssc wrote: »

(In no way trying to start an argument! Do you work for the HSE, is the hiring freeze not just on hiring new employees, not on permanencies?

Fair question. I dont work in the HSE but it does not just apply to hiring new employees, I know this as I play golf with a senior member of the HSE and unlike Deputy Cowen I dont pretend not to discuss work topics when playing golf :D

My point although I was very cryptic is that people need to cop on to themselves. This mentality of well in X number of months this will happen and I will get this bunus in this month and Im due a pay increase in this month. IT HAS TO STOP.

Too many people still with the wrong mentality thinking about affordabilty on too positive a note and not enough thinking abotu tax increases, interest rises, etc etc.

Monty Burnz

leahyl wrote: »

I don't know whether I should wait longer and see if prices go down more - am I mad to be looking to buy at 25? Like I don't know would this mean the end of any sort of social life but then I don't want to be there in a few years time regretting not buying!

You'd be mad to buy in my view. Not only because you can't afford to at the current crazy high prices, but because prices are only going one way.

Did you happen to hear (I did ) all the folks on Joe Duffy last week complaining that they were down €100, €200, €400 per month under the new budget? And how they can't pay the mortgage and buy food? Well there are 4 more budgets like that one coming thanks to Fianna Fail.

In addition, there are already over 300,000 empty properties in the country. And the population is falling again - 50,000 people leaving per year. Plus property taxes of some sort will probably be introduced, pushing prices down more.

Oh yeah, did I mention that all the banks are bust and can hardly lend anything?

Save as much as you can and sit tight for 5 years. Prices may have stopped falling by then, and you will have saved yourself a lot of stress.

leahyl

Monty Burnz wrote: »

You'd be mad to buy in my view. Not only because you can't afford to at the current crazy high prices, but because prices are only going one way.

Did you happen to hear (I did ) all the folks on Joe Duffy last week complaining that they were down €100, €200, €400 per month under the new budget? And how they can't pay the mortgage and buy food? Well there are 4 more budgets like that one coming thanks to Fianna Fail.

In addition, there are already over 300,000 empty properties in the country. And the population is falling again - 50,000 people leaving per year. Plus property taxes of some sort will probably be introduced, pushing prices down more.

Oh yeah, did I mention that all the banks are bust and can hardly lend anything?

Save as much as you can and sit tight for 5 years. Prices may have stopped falling by then, and you will have saved yourself a lot of stress.

Yes you're dead right really - after posting this thread yesterday i realised just how naive i am in relation to taxes etc. Like i knew we were gonna be taxed again after this budget but to what extent i did not. Then i realised just how much i may lose and it put things into perspective. I don't handle stress very well so i'm thinking it may be best to lay low and save, save, save.

Who knows where i'll be in 5 years anyway (married to the man of my dreams....so i could be buying a house with someone else:D) and as you said there are gonna be budgets like this years for at least 5 years to come.

I'm not a person that jumps into things that easily though so it's not like i was going to buy a house tomorrow but there's no harm in planning for the future i guess:o

Raskolnikov

leahyl wrote: »

Yes you're dead right really - after posting this thread yesterday i realised just how naive i am in relation to taxes etc. Like i knew we were gonna be taxed again after this budget but to what extent i did not. Then i realised just how much i may lose and it put things into perspective. I don't handle stress very well so i'm thinking it may be best to lay low and save, save, save.

Who knows where i'll be in 5 years anyway (married to the man of my dreams....so i could be buying a house with someone else:D) and as you said there are gonna be budgets like this years for at least 5 years to come.

I'm not a person that jumps into things that easily though so it's not like i was going to buy a house tomorrow but there's no harm in planning for the future i guess:o

If your intention is marriage, then I think you're doing the right thing by holding on. A house in this negative equity climate could be a millstone around your neck if you're looking to get a place together.

leahyl

Raskolnikov wrote: »

If your intention is marriage, then I think you're doing the right thing by holding on. A house in this negative equity climate could be a millstone around your neck if you're looking to get a place together.

Well there's no one on the scene yet! haha:D But hopefully there will be!

Yeah i think i will hold off for a while - no sense in putting myself under all that stress.

Have a feeling i'm gonna get a nasty suprise in my paycheck at the end of the month.....