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Mortgages for self build- anyone getting them and %

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  • 24-01-2011 9:49am
    #1
    clarelady
    Registered Users Posts: 39 ✭


    Hey We are in planning stages and wanted to start having a look at mortgages and if we would get one, with the current climate and all. Would love to hear people who have got them recently and if so what % are banks giving ie 100% of build cost or another %.We have site for free (family ) so only need build cost , so on a total basis what % would we get based on peoples recent information. We unfort have another house in Dublin that we wont be able to sell - so will rent out this which should more or less meet mtg payments but this prob will be a negative for us, so would be interested to hear of anyone in similar situation. thanks


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    #2
    galwaytt
    Registered Users Posts: 12,776 ✭✭✭✭galwaytt


    Not my own personal experience, but more that of client's that I meet on a day-day basis.

    Quite apart from getting one, no-one seem's to be getting 100% of build cost. The majority seem to be in the 80% range. You won't get any 'brownie points' for getting the site for free - esp if they deem your ability-to-pay the build cost is on the margin's.

    Personally I'm not sure whether having an existing property is good or bad - bear in mind interest rates are going up, and the mortgage you'll get offered will be variable -the day's of Tracker Mortgages are long gone.

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



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    #3
    bruschi
    Moderators, Sports Moderators Posts: 4,141 Mod ✭✭✭✭bruschi


    galwaytt wrote: »
    Not my own personal experience, but more that of client's that I meet on a day-day basis.

    Quite apart from getting one, no-one seem's to be getting 100% of build cost. The majority seem to be in the 80% range. You won't get any 'brownie points' for getting the site for free - esp if they deem your ability-to-pay the build cost is on the margin's.

    Personally I'm not sure whether having an existing property is good or bad - bear in mind interest rates are going up, and the mortgage you'll get offered will be variable -the day's of Tracker Mortgages are long gone.

    the site can count as the deposit amount, thereby meaning you could get 100% of the build, but thats not difinitive. It worked in my own case that instead of a deposit, the site was taken into account. but a lot of factors determine it firstly, and its more down to personal situations rather than a general rule of thumb.


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    #4
    wclarke20
    Registered Users Posts: 204 ✭✭wclarke20


    We got a 100% mortgage for a self build. Hopefully we’ll only be using 2/3rd of the amount we got approved for. They took the site into account, no deposit needed but as the previous poster said, it may just be on a case by case basis.


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    #5
    *WKD*
    Registered Users Posts: 55 ✭✭*WKD*


    We had terrible trouble getting ours.....due to dh on a rolling contract and deemed not permanent thanks to the Dept of Ed....finally got ours approved through Haven - rates are a wee bit higher but not crazy!! It was a mortgage broker that helped us get ours.


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    #6
    clarelady
    Registered Users Posts: 39 ✭clarelady


    Wclarke, can i ask who in the end you got your mortgage with and I presume this was all recently enough
    i think the one thing against us may be the current mtg we have already


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    #7
    JuniorB
    Registered Users Posts: 379 ✭✭JuniorB


    Any decent broker should be able to tell you whether you will get a mortgage or not.
    From my experience banks tend to look more from the ability to repay side than the actual loan amount % side but that may not be true any more.
    From that perspective most banks will NOT take rental income for your second (current) house into account. They will add 1/2% to your interest repayments on that and stress test you on that. I know that PTSB used to let you include rental income in your figures but this may have changed.
    They also add a figure for kids e.g. if you have 2 kids they will say it costs 300 each to feed, cloth etc etc which will reduce your ability to repay.

    As was said previously it will come down to individual basis. Most banks are not giving mortgages to anyone - a broker should know who's in the market now and who's not.
    Best of luck..


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    #8
    kaoder
    Registered Users Posts: 5 ✭kaoder


    Hi there,

    My partner and I just got a mortgage last November for a self build. The process was pain staking...We dealt with the bank directly which if I had to do it again I would have went with a broker. The lady in the bank we used was awfully slow at processing it, and just didn't seem to be interested or care. We had to wait a month before we found out we were eligible for the mortgage, originally she told me we would find out in a few days. For the month I was like a hyena pouncing on the phone when it rang just encase it was the bank calling about our mortgage. I would also say she got annoyed with me ringing every couple of days looking for an update. Don't get me wrong I am delighted we were approved in the end but I would go with a broker if at all possible..


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    #9
    wclarke20
    Registered Users Posts: 204 ✭✭wclarke20


    clarelady wrote: »
    Wclarke, can i ask who in the end you got your mortgage with and I presume this was all recently enough
    i think the one thing against us may be the current mtg we have already


    We went with EBS in the end. We go t approved in the past few months. Didn't draw it down yet though so hopefully there'll be no problems when i go to do that.


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    #10
    e30fitz
    Registered Users Posts: 79 ✭✭e30fitz


    hi everyone very interested in all of the above would love to hear your opinions on my situation i have a site my name with fpp for a 2450 square foot house. i earn 35000 a year and herself earns 18000 i have a loan that was 9000 down to 2000 and herself owes 2000. Big problem is we have no savings and bothour accounts are using the overdraft and out again whe when we get paid (monthly). would i be laughed out of the banks if i go looking for 180000 or 200000 mortgage . also we have been renting for a year 700 a month nevr miss a payment and all the bills paid.
    would love to hear what you all think
    thanks!


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    #11
    galwaytt
    Registered Users Posts: 12,776 ✭✭✭✭galwaytt


    wclarke20 wrote: »
    We went with EBS in the end. We go t approved in the past few months. Didn't draw it down yet though so hopefully there'll be no problems when i go to do that.

    ...make sure you draw down at least some of it, before offer expires. I'm aware of one person who didn't, and under the 'new regime' got refused on re-application.

    Possession is 9/10ths of the law, and all that. If you don't use it, you can always give it back.....

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



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    #12
    JuniorB
    Registered Users Posts: 379 ✭✭JuniorB


    galwaytt wrote: »
    ...make sure you draw down at least some of it, before offer expires. I'm aware of one person who didn't, and under the 'new regime' got refused on re-application.

    Possession is 9/10ths of the law, and all that. If you don't use it, you can always give it back.....


    +1. With weather hold ups etc our build was very slow to start. Ours elapsed after 6 months. Had to get re-valuation done (which dropped the market value of finished house). As we were on LTV we had to reduce our loan amount to stay within the LTV ratio.
    FYI you will need a valuation done when house is completed also. If on LTV this may have an effect also.
    Advice - although the valuer works for the bank - you generally get to pick them, do your research and pick wisely!!

    Also try and have the minimum amount left for you last drawdown, it's the hardest to get. Banks may or may not agree but worth trying.

    Best of luck


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    #13
    biddyearly
    Closed Accounts Posts: 4 ✭biddyearly


    galwaytt wrote: »
    ...make sure you draw down at least some of it, before offer expires. I'm aware of one person who didn't, and under the 'new regime' got refused on re-application.

    Possession is 9/10ths of the law, and all that. If you don't use it, you can always give it back.....


    I would agree with Galwaytt, Make sure you draw down some of the mortgage before the offer expires, This is usually 6 months. Also i have seen in one or two cases where the financial institution has reduced the mortgage that it origionally had given even after a few stages had been drawn down - claiming that build costs had now reduced and therefore the full mortgage was not needed. Again as another poster said, try to front load the mortgage leaving as little as possible at the end as they are very slow to pay out the final stage (completion) these days.


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    #14
    galwaytt
    Registered Users Posts: 12,776 ✭✭✭✭galwaytt


    update: I have asked two people who are building, this question, inside the last week.........and got 2 different answers...

    Example 1: client owns site (farm), no credit given for ownership of site, and 80% LTV.

    Example 2: client bought site, has some savings, 'credit' given for site, and 80% LTV.

    So, like anything else to do with banks: it's completely inconsistent. Nothing new there, then.......:rolleyes:

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



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    #15
    just do it
    Registered Users Posts: 5,422 ✭✭✭just do it


    clarelady wrote: »
    We unfort have another house in Dublin that we wont be able to sell - so will rent out this which should more or less meet mtg payments but this prob will be a negative for us, so would be interested to hear of anyone in similar situation. thanks

    They will stress this by adding 2% to your current rate which I hope to God is a tracker for your sakes! Being in Dublin is an advantage, they will accept 75% of the rental income. They will want this vouched for either by your last tax return or by accounts certified by an account, along with evidence of monthly rental lodgements in your bank account of course!


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    #16
    wclarke20
    Registered Users Posts: 204 ✭✭wclarke20


    After jumping through all the banks hoops, we were offered a 80% mortgage which basically means we need €50k savings deposited before we can draw down.

    Being gifted the site is irrelevant, we were told. Unfortunately we dont have €50k in savings so may have to put off building the dream home for a while :(


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    #17
    muffler
    Registered Users Posts: 46,048 ✭✭✭✭muffler


    wclarke20 wrote: »
    We got a 100% mortgage for a self build. Hopefully we’ll only be using 2/3rd of the amount we got approved for.
    wclarke20 wrote: »
    After jumping through all the banks hoops, we were offered a 80% mortgage
    Not sure I follow :confused:


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    #18
    wclarke20
    Registered Users Posts: 204 ✭✭wclarke20


    I know Muffler, approved in principle with this. But when we tried to draw down, we were told the 'new' conditions will only give us this.


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    #19
    muffler
    Registered Users Posts: 46,048 ✭✭✭✭muffler


    wclarke20 wrote: »
    I know Muffler, approved in principle with this. But when we tried to draw down, we were told the 'new' conditions will only give us this.
    Ah! I see.

    Difficult position to find yourself in.


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    #20
    wclarke20
    Registered Users Posts: 204 ✭✭wclarke20


    I was gifted a site by my parents but Bank of Ireland say that both of us have to be on the deeds for the mortgage. This will mean my parents would be liable for CGT on half the value of the site.

    Anybody else get this response from the banks?


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    #21
    muffler
    Registered Users Posts: 46,048 ✭✭✭✭muffler


    wclarke20 wrote: »
    I was gifted a site by my parents but Bank of Ireland say that both of us have to be on the deeds for the mortgage. This will mean my parents would be liable for CGT on half the value of the site.

    Anybody else get this response from the banks?
    Thats probably standard enough. if the mortgage is in joint names then they definitely will insist on title to the property being in both names.

    AFAIK, even if the mortgage is in your name only you will need to have it jointly owned because of family law or something like that.

    There is nothing to stop you from registering the gift in your name only and then amend the registration to joint names thus avoiding cgt payable by your parents. But then this will cost you additional legal fees. Swings and roundabouts really.

    Talk to your solicitor about the options and choose which ever one is more "cost effective"


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    #22
    wclarke20
    Registered Users Posts: 204 ✭✭wclarke20


    The site is in my name now. As we're not married yet (next year), she would be acquiring an asset and i would have to pay CGT.

    I didnt think it was standard practice to be honest. Its called joint mortgage sole title. A lot of people nearby were in similar positions and i know they didnt have to do that. EBS didnt have any issue with it but we bailed on them as they were messing us about.

    I'll probably have to speak to the solicitor but i was just wondering if anybody else had any experience with this.


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    #23
    just do it
    Registered Users Posts: 5,422 ✭✭✭just do it


    wclarke20 wrote: »
    I was gifted a site by my parents but Bank of Ireland say that both of us have to be on the deeds for the mortgage. This will mean my parents would be liable for CGT on half the value of the site.

    Anybody else get this response from the banks?

    Quazzie on the "the house that boards built" thread had a similar issue as this, see what someone in the legal profession replied at this link: http://www.boards.ie/vbulletin/showthread.php?t=2055461436&page=8


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    #24
    galwaytt
    Registered Users Posts: 12,776 ✭✭✭✭galwaytt


    wclarke20 wrote: »
    I...approved in principle with this. But when we tried to draw down, we were told the 'new' conditions will only give us this.

    Ah yes, hearing this a lot. The term is 'bait & switch'. The idea being that, if you get an attractive offer at the start, you stop looking elsewhere, and so take out the competition.

    I'm sitting not 5m from someone this has happened to in the last 6 weeks.

    wclarke20 wrote: »
    The site is in my name now. As we're not married yet (next year), she would be acquiring an asset and i would have to pay CGT. ...I'll probably have to speak to the solicitor but i was just wondering if anybody else had any experience with this.

    Do consult a solicitor, but while you're doing so, ask about having 'property in common'. Just something I came across years ago, in the family.

    Ode To The Motorist

    “And my existence, while grotesque and incomprehensible to you, generates funds to the exchequer. You don't want to acknowledge that as truth because, deep down in places you don't talk about at the Green Party, you want me on that road, you need me on that road. We use words like freedom, enjoyment, sport and community. We use these words as the backbone of a life spent instilling those values in our families and loved ones. You use them as a punch line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the tax revenue and the very freedom to spend it that I provide, and then questions the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a bus pass and get the ********* ********* off the road” 



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    #25
    ewanalex
    Closed Accounts Posts: 39 ✭ewanalex


    Oh dear I feel sick reading through this post! After 5 years of fighting to get our planning, we finally get planning an now I'm concerned we may not get a mortgage! We've just applied recently, went with broker who was very honest an told us it could take months to get approval! This is torture!
    Were both in good jobs and well paid but we do have outstanding loans so I'm really nervous now! Very interested to read other recent experiences with this.... Aaagghh


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    #26
    kizzyf
    Registered Users Posts: 206 ✭✭kizzyf


    In my experience the sooner you hear back the less likely you are to have been successful. Banks are being very difficult at the moment particularly if you have outstanding loans, another property or are self employed. Good luck with it.


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    #27
    ewanalex
    Closed Accounts Posts: 39 ✭ewanalex


    Thank you, it's scary at the moment, the thing is we can actually afford a mortgage but not sure the banks will see this when we have oustanding loans,
    I would someones opinion on whether we should clear all our loans with our savings? Half the value of the site is I suppose gifted would this help? I feel very nervous using my savings to pay back our loans and be left with very little savings? What to do?


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    #28
    mmc2010
    Registered Users Posts: 145 ✭✭mmc2010


    ewanalex wrote: »
    Thank you, it's scary at the moment, the thing is we can actually afford a mortgage but not sure the banks will see this when we have oustanding loans,
    I would someones opinion on whether we should clear all our loans with our savings? Half the value of the site is I suppose gifted would this help? I feel very nervous using my savings to pay back our loans and be left with very little savings? What to do?

    Hi ewanalex, unfortunately there is no straightforward answer to this. My husband and I applied 6mths ago and were turned down on the basis that I had a large pers loan (10k). I had the option to repay out of our savings but we needed the savings to finish off the house so I didn't want to do that. So I went about repaying the loan faster by paying off €1k p.m. I have it nearly paid off now with three months to go. I called to the bank yesterday again to discuss the situation and am now in a much better position as I can also prove repayment capacity with the additional 1k when the loan is paid off. Granted it has been a tough (and very quiet!) 6mths but I think it was worth it! I would recommend this approach for the two of you but I don't know your circumstances so it may not work for you.


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    #29
    ewanalex
    Closed Accounts Posts: 39 ✭ewanalex


    Thank you so much mmc2010, this is the sort of information I was hoping to get from people on here, to be fair were talking similar numbers, we owe 15k but were saving 1500 per month so I'm just hoping the repayment capacity will go in our favour we've 2 yes left on the loan. I spoke to broker today and she told me leave it for now and let's just see what happens. As our strong savings will look more favourable. Fingers crossed, I will let everyone know the outcome whenever that is.
    Have u started to build or have u litterally just got ur mortgage?


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    #30
    mmc2010
    Registered Users Posts: 145 ✭✭mmc2010


    Hi ewanalex, I've done neither at present. I have to wait another month before we can apply so fingers crossed then. We're hoping to start building as soon as possible after. Its exciting but scary at the same time!


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    #31
    db
    Registered Users Posts: 1,091 ✭✭✭db


    Mortgages are getting harder to get and the bank will look very closely at your ability to repay the loan at current rate + 2-3% on top. They will take your income and outgoings on any existing loans living costs etc and will base the size of mortgage they will give you on how much you can repay each month. For example, if you have €1000 left over to pay your mortgage each month they will approve you for they size of mortgage you can repay with €1000/month if the interest rates increase.

    On the other side, the bank will look for a valuation of the finished house and the maximum offer will be 90% of the finished value of the house.

    We own our current house outright, have no loans of any sort, have large savings in the bank, decent salary and we were shocked at how little the bank would approve us for on a mortgage, just a little over 2 x salary. We have permission on a site and we will have to buy the site with savings and a small personal loan and then look for a mortgage to build when that loan is repaid.


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