Buying a house 2013!

coraline55

Hi killers, I would really appreciate your thoughts on my situation, and anyone else too of course
Have been following the 2012 and 2013 threads closely...

So our story -
Bought 2 bed apt on Dublin's northside for 380k in 2005. Its in a v good area and a well maintained development, top floor so high ceilings, good views over Dublin etc

Its now worth maybe 200k and we owe 280 k on the mortgage.
Offset mortgage with Ulster Bank - ECB + 1.15% which means 1.9% at present


Apartment has been rented for 2 years at 1050/month

We have been renting a house on the southside for 2 yrs, closer to work and family and more space for our small children, paying rent 1600/month.

Savings - 50k
Debts - none

My salary - 55k
Husband's salary - 55k
Both permanent, teacher and lecturer, good pensions etc.

Possible gifts / loans from parents -
30k approx gift and loan of approx 20k

---

We really really want to sell the apt and buy a house close to where we are renting now. The rental house is in great location but falling to bits, heating, plumbing etc are a joke.

We've been to Ulster Bank twice and they told us we would be perfect candidates for a negative equity trade up mortgage but they dont offer it yet, one guy told us it was delayed by their IT crash last summer but still no sign of it happening if at all.

Would the other banks who offer negative equity mortgages consider us at all ?
Any other advice or things we can try ?
If we switch banks we would lose the offset/tracker, Ulster Bank did tell us we could keep it if we move but not 100% sure about it....

Thanks in advance ))

killers1

coraline55 wrote: »

Hi killers, I would really appreciate your thoughts on my situation, and anyone else too of course
Have been following the 2012 and 2013 threads closely...

So our story -
Bought 2 bed apt on Dublin's northside for 380k in 2005. Its in a v good area and a well maintained development, top floor so high ceilings, good views over Dublin etc

Its now worth maybe 200k and we owe 280 k on the mortgage.
Offset mortgage with Ulster Bank - ECB + 1.15% which means 1.9% at present


Apartment has been rented for 2 years at 1050/month

We have been renting a house on the southside for 2 yrs, closer to work and family and more space for our small children, paying rent 1600/month.

Savings - 50k
Debts - none

My salary - 55k
Husband's salary - 55k
Both permanent, teacher and lecturer, good pensions etc.

Possible gifts / loans from parents -
30k approx gift and loan of approx 20k

---

We really really want to sell the apt and buy a house close to where we are renting now. The rental house is in great location but falling to bits, heating, plumbing etc are a joke.

We've been to Ulster Bank twice and they told us we would be perfect candidates for a negative equity trade up mortgage but they dont offer it yet, one guy told us it was delayed by their IT crash last summer but still no sign of it happening if at all.

Would the other banks who offer negative equity mortgages consider us at all ?
Any other advice or things we can try ?
If we switch banks we would lose the offset/tracker, Ulster Bank did tell us we could keep it if we move but not 100% sure about it....

Thanks in advance ))

Hi Coraline55,
A lot will depend on the price of the new house you'd be hoping to buy but I'd see your options as follows;

1. Wait for Ulster Bank to launch their NE product. Unfortunately no other lender will take on another banks NE and these type of products will only be available to applicants from their existing lender. I wouldn't be surprised if UB are actually allowing customers to do this at present quietly because I enquired on behalf of a client approx 3 yrs ago and know it was feasible then.
2. Sell your existing property and pay off the NE using your savings & gift. Continue to rent for a while until you replenish your savings enough to have a deposit for the new property.
3. Explore the figures in relation to keeping your existing property and taking out a second mortgage to move house.
4. Move to a different rented property (given the current state of plumbing, heating etc).

Some of the options above are obviously dependent on how much you were hoping to buy for so may or may not be viable...

fricatus

killers1 wrote: »

1. Wait for Ulster Bank to launch their NE product. Unfortunately no other lender will take on another banks NE and these type of products will only be available to applicants from their existing lender. I wouldn't be surprised if UB are actually allowing customers to do this at present quietly because I enquired on behalf of a client approx 3 yrs ago and know it was feasible then.

We enquired into this with UB, and were offered a new morgage to take the NE with us. Unfortunately it wasn't enough to buy the place we wanted, so we've just taken out a new mortgage with BOI. It means that we're back in the position we were in before we met, i.e. with two mortgages, but at least this time we can rent out the smaller place because there's no way we're selling it in the current market.

Glenbhoy

fricatus wrote: »

We enquired into this with UB, and were offered a new morgage to take the NE with us. Unfortunately it wasn't enough to buy the place we wanted, so we've just taken out a new mortgage with BOI. It means that we're back in the position we were in before we met, i.e. with two mortgages, but at least this time we can rent out the smaller place because there's no way we're selling it in the current market.

Do you mean there's no way you can sell it or there's no way you will sell it because you feel that prices don't reflect its value?

I only ask to ensure you've done your sums properly as sometimes holding on to an unwanted property can cost a lot more than your realise, and it may be a considerable time before the smaller property appreciates in value to the extent that the ongoing losses are covered.

fricatus

Glenbhoy wrote: »

Do you mean there's no way you can sell it or there's no way you will sell it because you feel that prices don't reflect its value?

Can't sell without crystallising a massive loss. We're going to rent it out for now and that will cover the mortgage.

We'll wait until we're at about break even and then decide whether to hold onto it or sell.

coraline55

fricatus wrote: »

We enquired into this with UB, and were offered a new morgage to take the NE with us. Unfortunately it wasn't enough to buy the place we wanted, so we've just taken out a new mortgage with BOI. It means that we're back in the position we were in before we met, i.e. with two mortgages, but at least this time we can rent out the smaller place because there's no way we're selling it in the current market.

Hmm, its interesting that you were offered a NE mortgage, they refused us ... Did you talk to the branch mortgage adviser or someone higher ?
Its great that it worked out for you in the end.

coraline55

Thanks killers, really appreciate you replying.
I did suspect that no other bank would be interested in us.

So I have heard from a few sources now that UB have been quietly giving negative equity mortgages for a while now. I wonder what chance we would have of speaking to someone more senior ? We do seem to be good candidates, good salary, no debts etc etc....
The two guys in the branch we spoke to seemed to be slaves to their computer, popping figures into the mortgage software like it was a sentient being rather than a computer ...
How does one get to speak to someone with some power to think and make decisions ?
Would a broker help ?

To answer your question about the price of the new house we would like to buy, as much as they will give us really )) Around 350-400k I guess....

killers1 wrote: »

Hi Coraline55,
A lot will depend on the price of the new house you'd be hoping to buy but I'd see your options as follows;

1. Wait for Ulster Bank to launch their NE product. Unfortunately no other lender will take on another banks NE and these type of products will only be available to applicants from their existing lender. I wouldn't be surprised if UB are actually allowing customers to do this at present quietly because I enquired on behalf of a client approx 3 yrs ago and know it was feasible then.
2. Sell your existing property and pay off the NE using your savings & gift. Continue to rent for a while until you replenish your savings enough to have a deposit for the new property.
3. Explore the figures in relation to keeping your existing property and taking out a second mortgage to move house.
4. Move to a different rented property (given the current state of plumbing, heating etc).

Some of the options above are obviously dependent on how much you were hoping to buy for so may or may not be viable...

coraline55

More questions

I also came across this article, some interesting stuff about using a tracker as a bargaining tool, it is from the Irish Independent in 2010 so maybe not valid now but would love to hear what people think...

Here's the link - http://www.ifgfinancial.ie/press/index.php?NID=754

And the relevant section -

Tracker buybacks

This might be a possible escape hatch for someone who wants to move and has an underwater house value.

"The banks are haemorrhaging money on tracker mortgages," says Simply Mortgage's Peter Bastable. "They are actually paying twice the amount for Euribor [the rate at which European banks borrow cash from each other] money than the tracker mortgage repayments are yielding.

"There's a great expression: he who holds the gold makes the rules. If you have a tracker, you're in a terrific position to bargain if you want to sell up but are in negative equity."

It can't be stressed enough, of course, that the golden rule in most cases is: if you have a tracker, hold on to it for dear life. But in certain situations -- and we stress we are not advising people to ditch their trackers -- it might be possible to use your tracker as a bargaining tool with your lender to reduce your mortgage.

"If you have a mortgage of, say, €350,000 on a house that is now worth just €300,000, you could cut a deal with your lender where you relinquish your tracker in return for say, a 20 per cent discount off your mortgage. That could put about €75,000 in your pocket. It frees up equity for people to move home."

Bastable suspects that banks may soon seek to do some sort of 'tracker buyback' deals with customers.

In the right set of circumstances they might -- we stress might -- be worth considering. Do your sums first.

Glenbhoy

fricatus wrote: »

Can't sell without crystallising a massive loss. We're going to rent it out for now and that will cover the mortgage.

We'll wait until we're at about break even and then decide whether to hold onto it or sell.

Fair enough, don't want to go too far off thread, but be aware that only 75% of interest is allowable as a deduction and that you will have to pay tax (and prsi and USC) on rental profits, which, as the rent is covering the mortgage, you undoubtedly have. It's probably not huge, but is another thing to consider.

quad_red

Viewed a house this morning that we are very interested in.

It was a buy to let that had been repossessed. The EA was working for the receiver.

I wonder - does this make them likely to want a fast transaction? Or does it make it more likely to be drawn out?

kennyb3

Hi killers, just wondering what a rough time frame is between going sale agreed and completion (assuming no issues)?

2months? 4months?

Bit of a how long is a piece of string question but just from your experience (the average)

killers1

kennyb3 wrote: »

Hi killers, just wondering what a rough time frame is between going sale agreed and completion (assuming no issues)?

2months? 4months?

Bit of a how long is a piece of string question but just from your experience (the average)

It's definitely a how long is a piece of string question!! Quickest one I had in 2012 from sale agreed to keys in hand was 8 working days! Longest was 6 months! Typical case assuming no issues 8-12 weeks. Where there's organised & willing vendors & purchasers generally 4-6 weeks.. All I'd say is get all your own requirements in place, have an efficient & proactive solicitor and let the vendor & their solicitor worry about their end of things...Ultimately it's the vendor who by in large controls the pace of the transaction, so whether you're made aware of it or not, they'll be suiting themselves in terms of a timeframe.

fricatus

coraline55 wrote: »

Hmm, its interesting that you were offered a NE mortgage, they refused us ... Did you talk to the branch mortgage adviser or someone higher ?

Mortgage adviser in the branch.

Glenbhoy wrote: »

Fair enough, don't want to go too far off thread, but be aware that only 75% of interest is allowable as a deduction and that you will have to pay tax (and prsi and USC) on rental profits, which, as the rent is covering the mortgage, you undoubtedly have. It's probably not huge, but is another thing to consider.

Yep... all too painfully aware! :pac:

Still the best option in our circumstances though.

darklighter

quad_red wrote: »

Viewed a house this morning that we are very interested in.

It was a buy to let that had been repossessed. The EA was working for the receiver.

I wonder - does this make them likely to want a fast transaction? Or does it make it more likely to be drawn out?

I have been bidding on a similar property since the end of November.

Made an offer below asking price; EA came back 2 weeks later saying offer wasn't accepted & there had been another offer more than mine. I made another offer & told EA that was my last offer.

Still waiting for a decision from the receiver but the EA keeps assuring me that he thinks the offer will be accepted :rolleyes:

I thought that been fully mortgage approved & having a survey done to demonstrate I was ready to move immediately would help but seemingly not. Maybe in your case it would be faster but in mine, drawn out seems to be the case.

flintash

Hi lads, just want to ask ye about making offers. Cause I have situation here now, there are plenty (let's say more than 10) properties available matching my requirements, and I'm going to see them all. Lets say, they all satisfy me after the viewings, and I want to make an offers on all of them. You know like good ole days, buyers would be bidding to get the house, here now the vendors would be bidding to get my money(from my point of view). As you can see, i'm foreigner, and dont really understand the this concept "making an offer". How serious it it in EA eyes? cause I dont want to show myself as tyre kicker and EAs never again take me seriously.

kennyb3

^^ highly unlikely 10 places will all match your requirements. Whittle it down to the ones that do (as in really do - you can to a pro's and con for each one to help whittle it down). Go see them a second or even a third time. Then bid on 2/3 and see where you get.

flintash

well you see, more than anything i'm hunting for is price (value for money, as I say). I have no special requirements for location, basically go on daft put cork and suburbs price 200k, 3 to 4 bed and back garden. See what choice you have there. Now like I said, I want garden, and dont want to live in Mayfield or knocknaheenee. Thats basically it. See the dillema I have now?
What I see here and real people around me, not many go low with offers. but I will. And what I expect is 30% drop regardless how much I LOVE the house. Therefore I need to make loads of offers to get someone willing for such a drop, and only then I look seriuoslly into it. I know it sounds like me being time waster, but hey- i'm sighing debt on for the rest of my life

makeorbrake

flintash wrote: »

See the dillema I have now?
What I see here and real people around me, not many go low with offers. but I will. And what I expect is 30% drop regardless how much I LOVE the house. Therefore I need to make loads of offers to get someone willing for such a drop, and only then I look seriuoslly into it. I know it sounds like me being time waster, but hey- i'm sighing debt on for the rest of my life

You have to calculate out what each of them is worth to you - that's it in a nutshell. They are not all the same - they all have their own sets of specifics. There is likely to be a variance in how the immediate area around each property is perceived - even if this doesn't seem important to you personally.
You can check the property price register. That will help (but of course only to a certain extent).
As regards to EA's taking you seriously, who cares! Their profession hasnt exactly set itself in glory in recent times (some would say at any time!). At the end of the day, you have to decide what something is worth to you. If the vendors expectation doesn't meet with that, then move on to the next one. If the general consensus is that your expectation and general market expectation are at odds, stay renting and keep your $ in your pocket.

flintash

I understand that in some cases 30% lower offer would be a joke and make EA laugh at my face, or other cases i'd run away from the house, never mind making an offer.But what i'm saying, as I just started to look for a property, go have a look at them all and make loads low ball offers then sit,wait and see if anyone interested.

quietsailor

makeorbrake wrote: »

You have to calculate out what each of them is worth to you - that's it in a nutshell. They are not all the same - they all have their own sets of specifics. There is likely to be a variance in how the immediate area around each property is perceived - even if this doesn't seem important to you personally.

Going all engineer on you here OP but makeorbrake has a good idea there; draw up a table with the house names across the top and what you want down the side. Assign values to each requirement in a range - say 0-100 for each and then total up the values at the bottom of each column.

It'll give you an idea of the differences between the various houses where you might not be able to see the differences just looking at brochures. Make sure to put in any requirements you might have in the future if your life changes - eg you get married and now want to be near a certain school

The excel sheet is an example I wrote out before for a friend, you'd have to change the requirements to what you want but it gives you the idea.

flintash

I looked at the file and think it is good idea when you compare like to like. But my variables too wide and set the right values for so many aspects is just too complicated. Like I said price matters more than anything, and probably vendors willingness to drop the price hence me believing getting the bargain.
I'm strong believer that houses are still overvalued ,but cant fight the market, so just trying get bargain .

nibtrix

flintash wrote: »

I looked at the file and think it is good idea when you compare like to like. But my variables too wide and set the right values for so many aspects is just too complicated. Like I said price matters more than anything, and probably vendors willingness to drop the price hence me believing getting the bargain.
I'm strong believer that houses are still overvalued ,but cant fight the market, so just trying get bargain .

So it's more important for you that you "believe" you've gotten a bargain house than actually getting the right house for your future? :eek:

flintash

I believe the houses still overpriced. I believe the attitude " the right house" and "time to buy" got us where we are now. I believe prices not falling drastically because of same attitude.
I need to mention I apply investors formula for house price as well, therefore I think houses overpriced in general.

makeorbrake

flintash wrote: »

I need to mention I apply investors formula for house price as well, therefore I think houses overpriced in general.

Which formula exactly are you using? Rental yield? If so, what is your perception of an adequate rental yield?


By the way, I'm not necessarily challenging your approach. I have made about 5 actual offers in the last couple of years - all of which were exceeded. With the exception of maybe one property, I'm not all that unhappy that I stuck with what I thought was right (even the one that I felt may have been worth more I didnt bid higher simply as funds were not available to go higher at that time).

Who cares what the EA's think. It's a sales based industry - you're just a mark for them.

flintash

9% rental yield, before all expenses ,depreciations and taxes.
I do care what EA thinks. Emails do not get answered, cause they dont take you seriously. They tell you what offer was refused by that setting the price floors, though it could be pure lies. I spoke to one of biggest of EA in Cork and I believe they can push market they wanted.Most worryingly they put fear in me i'm not getting any house if i'm not paying asking price or very close. I'll get over this and find my way to bargains i'm so dreaming of (but I doubt average irish couple/person gonna do that)

makeorbrake

flintash wrote: »

I do care what EA thinks. Emails do not get answered, cause they dont take you seriously.

You're a prospect - and they don't answer emails?

flintash wrote: »

They tell you what offer was refused by that setting the price floors, though it could be pure lies.

You can have absolutely NO confidence in this information! For real tangible figures, check the PPR (albeit that you have to allow for differences between what may be otherwise - similar properties - and of course the point in time in which the sale went through).

flintash wrote: »

I spoke to one of biggest of EA in Cork and I believe they can push market they wanted.

Not sure what you mean by this exactly?

flintash wrote: »

Most worryingly they put fear in me i'm not getting any house if i'm not paying asking price or very close.

Why is that "worrying" or unexpected? Their job is to maximise sales price for their client.

flintash wrote: »

I'll get over this and find my way to bargains i'm so dreaming of (but I doubt average irish couple/person gonna do that)

lol...they won't do this? I wouldn't be so sure about that. There is no silly money out there anymore. I've spent the last 2 years looking - and will continue to do so until I find a deal that makes financial sense.

flintash

Maybe it just luck, or badly represented myself in emails, but has got no replays. Different story when I ring. They called back.
PPR - heard too many stories that I take it granted. People I KNOW claimed price difference between sale an PPR price. (to be honest, no surprise)
No silly money? you joking me! Just handful boardies and pinsters sitting and waiting zero price, others buying, they just dont come on boards to share or ask for your advise .
off topic- after 8 years i found first irish person using forums- everybody wondered when I said "What's trending?"

highgiant1985

Do EAs ever reply back to emails?

I've sent a few as well and no reply!

flintash

^^
thats what i talking about.
Came here just to ask how not to look tyre kicker. thats all.

An Ri rua

highgiant1985 wrote: »

Do EAs ever reply back to emails?

I've sent a few as well and no reply!

Yeah they do. I've had success with sending emails. Must be how I write them. I use a spare sim and, after they've finished leaving a message on that and not getting a call back for a few days, they email...