Getting approved for a mortgage

joanna28

Hi everyone,
Just wondering if you can help me please?
Im a 28 yr old female .I own my own house with no mortgage and also own a site with full planning permisson.for 2000 sq foot hse.i earn 25000 euro per year.
I want to build house on the site.would be lookimg for mortgage of 150000 amd i have no savings and just myself on mortgage.do you think.id be eligible for this? Any advice would be great.

Thank you:))))

Henry Ford III

6 x income. Forget about it.

desertcircus

You're looking for a mortgage six times your salary with no deposit, and you have no savings despite having no rent or mortgage outgoings. How would you intend to make payments on the mortgage, which would be skirting towards half your salary?

joanna28

Yes but 300000 worth of assets would stand as my savings deposit??? And with no other bills payment is easy for me..question im asking is how mucj would banks loan me??

Thamks.

desertcircus wrote: »

You're looking for a mortgage six times your salary with no deposit, and you have no savings despite having no rent or mortgage outgoings. How would you intend to make payments on the mortgage, which would be skirting towards half your salary?

drunkmonkey

Assets would help but accessible cash would be required along with proof or savings. Have you rental income from your assets? Are there contracts in place you can produce.
You need to have a serious chat with yourself, Do you really need a new house that's going to swallow up every penny you have, that house with your salary will completely do away with your social life.
Go into your local bank and have a chat with the manager and get their opinion on your proposal.
On what you've written you probably wouldn't get a mortgage the size your looking for.

joanna28

Hi
Thanks for your reply.Yes I.inherited house.where im living at present.The site I purchased 4 years ago recieved full planning permisson on.I Plan to build new house on site and sell then for a profit or rent house.site without planning not worth much to anyone
Cant sell site with planning as its in my name.so thats the prediciment im in.obviously I want to gain from it..10000 been spent on planning bord na mona water tests and opening up tje site etc...so what do you think?

drunkmonkey wrote: »

Assets would help but accessible cash would be required along with proof or savings. Have you rental income from your assets? Are there contracts in place you can produce.
You need to have a serious chat with yourself, Do you really need a new house that's going to swallow up every penny you have, that house with your salary will completely do away with your social life.
Go into your local bank and have a chat with the manager and get their opinion on your proposal.
On what you've written you probably wouldn't get a mortgage the size your looking for.

drunkmonkey

Sell the site as it is, you'll probably make much the same money. You should be able to sell it subject to planning.
Bear in mind anyone that wants a new house like that will probably not cheap out on building it. €150,000 won't go far on 2000 square feet.
If the house is in the countryside your really going to struggle to finance it and so will your buyer.

The first person you need to speak to is a trusted solicitor before you go to the bank.

Your quick buck scheme could go horribly wrong be very careful who you trust.

joanna28

Lol..its not a get rich scheme

drunkmonkey wrote: »

Sell the site as it is, you'll probably make much the same money. You should be able to sell it subject to planning.
Bear in mind anyone that wants a new house like that will probably not cheap out on building it. €150,000 won't go far on 2000 square feet.
If the house is in the countryside your really going to struggle to finance it and so will your buyer.

The first person you need to speak to is a trusted solicitor before you go to the bank.

Your quick buck scheme could go horribly wrong be very careful who you trust.

joanna28

quote="joanna28;87135552"]Lol..its not a get rich scheme...i.have put alot.of tjought into it and momey and this was a plam to live there before i imheritated a house.
House.would be built direct labour and 150 would cover it..
Site has been opened perculation done plamning paid etc all costs most people include in mortgage ..also well as be sunk ...so its in no way a quick get rich scheme .site is in a great area just outside city and lose to almenities on.1'5 acres.just lookimg for helpfull advice not second guessing my motive or if im doing right thing etc because i have all that part figured out....i just want to see if im eligible for mirtgage or how much..
Thanks )))

_Kaiser_

I think your answer from reading the above is no you're probably not.

You have no savings despite presumably minimal outgoings, a low enough income, and how do you know the house you inherited is worth €300k? Did you get a recent valuation/check what similar houses in the area are selling for etc.

I'd agree with DM above that your best bet is probably to sell the site as it is but as has already been said the only way to know for sure is to apply I suppose.

roro2

joanna28 wrote: »

quote="joanna28;87135552"]Lol..its not a get rich scheme...i.have put alot.of tjought into it and momey and this was a plam to live there before i imheritated a house.
House.would be built direct labour and 150 would cover it..
Site has been opened perculation done plamning paid etc all costs most people include in mortgage ..also well as be sunk ...so its in no way a quick get rich scheme .site is in a great area just outside city and lose to almenities on.1'5 acres.just lookimg for helpfull advice not second guessing my motive or if im doing right thing etc because i have all that part figured out....i just want to see if im eligible for mirtgage or how much..
Thanks )))

You're not eligible as things stand. For this type of project you will need to put in at least 10% (€15k) of your own cash first and demonstrate that you could cover any cost overruns. The bank will likely question/refute your build estimate of €150k and apply their own estimate. Regardless of your intentions, you will need to demonstrate that you can repay the stressed mortgage repayments but you have no savings history at present. Based on your income, you are also looking at a max. of around €100-110k. That's before all the other lending terms and conditions. By all means talk to your bank about how you should go about making yourself eligible for a mortgage in a number of years, but you will be told there is no point in applying now.

joanna28

Thanks for reply.Yes house has neen valued at 300000.Yes I will apply but wanted to hear from other people in similar situation or who had similar experience first.

Kaiser2000 wrote: »

I think your answer from reading the above is no you're probably not.

You have no savings despite presumably minimal outgoings, a low enough income, and how do you know the house you inherited is worth €300k? Did you get a recent valuation/check what similar houses in the area are selling for etc.

I'd agree with DM above that your best bet is probably to sell the site as it is but as has already been said the only way to know for sure is to apply I suppose.

joanna28

No I dont need 10 percent of it as my site and money that has gone in to it is its deposit and.would.normally be calculated as part of costs /mortgage.so its a little bit differnt to buying a house.

roro2 wrote: »

You're not eligible as things stand. For this type of project you will need to put in at least 10% (€15k) of your own cash first and demonstrate that you could cover any cost overruns. The bank will likely question/refute your build estimate of €150k and apply their own estimate. Regardless of your intentions, you will need to demonstrate that you can repay the stressed mortgage repayments but you have no savings history at present. Based on your income, you are also looking at a max. of around €100-110k. That's before all the other lending terms and conditions. By all means talk to your bank about how you should go about making yourself eligible for a mortgage in a number of years, but you will be told there is no point in applying now.

roro2

joanna28 wrote: »

Thanks for reply.Yes house has neen valued at 300000.Yes I will apply but wanted to hear from other people in similar situation or who had similar experience first.

It doesn't matter what this house is valued at. It's a family home and cannot be used as collateral for an investment property.

roro2

joanna28 wrote: »

No I dont need 10 percent of it as my site and money that has gone in to it is its deposit and.would.normally be calculated as part of costs /mortgage.so its a little bit differnt to buying a house.

A bank mightn't view it the same way, so you will need to ask them.

joanna28

Yes thats true but im sure they would view it like this .couldnt see why not..just finished lian etc so I can show that I can pay and save...look sure they can only no.
Thanks for your opinion
.
oro2;87136234"]A bank mightn't view it the same way, so you will need to ask them.[/quote]

Sleepy

Are you looking to move into the house you're building or to rent it out after the build?

If it's the former, why not sell what you're currently in and rent for the duration of the build? Can't imagine the cost of renting for a year would be that much more than the cost of insurance on the mortgage and if the current house is worth twice your build cost that leaves you with plenty of contingency or options to upgrade the finish etc.

joanna28

Yes that would be the easy option but no I want to live in the current house ,I dont want to sell.
I just want to build new house and rent or sell it on )))))
uote="Sleepy;87136608"]Are you looking to move into the house you're building or to rent it out after the build?

If it's the former, why not sell what you're currently in and rent for the duration of the build? Can't imagine the cost of renting for a year would be that much more than the cost of insurance on the mortgage and if the current house is worth twice your build cost that leaves you with plenty of contingency or options to upgrade the finish etc.[/quote]

joanna28

And please replys only from people that actually have an idea about this or experience or in banking/ lending etc not people.with nothing better to do than talk **** with no facts or experience etc that think they know everything and actually know sweet fxk all ..lol :-)))))
Much appreciated.;)))

joe316

joanna28 wrote: »

And please replys only from people that actually have an idea about this or experience or in banking/ lending etc not people.with nothing better to do than talk **** with no facts or experience etc that think they know everything and actually know sweet fxk all ..lol :-)))))
Much appreciated.;)))

Well with that sort of attitude, not expect too much help.

But in a nutshell, you aren't going to get what you want.

There's no way the bank will give you a mortgage for that amount, your existing house is not cash and not the same as savings so ok it will count towards something it will not be enough to get the mortgage i.e. if you cant afford it you will be forced to sell your current property to pay off the new house.

You'd need to be saving about 900 a month to show that you can afford a mortgage of 150k and then there is overruns of another 15/20% so really you should be looking at a mortgage of about 180k so you need to be saving about the 1000 mark each month.

desertcircus

joanna28 wrote: »

And please replys only from people that actually have an idea about this or experience or in banking/ lending etc not people.with nothing better to do than talk **** with no facts or experience etc that think they know everything and actually know sweet fxk all ..lol :-)))))
Much appreciated.;)))

Presuming monthly repayments of a thousand euro, you're looking at having to prove to the bank that you can live on half the amount you currently do. You're also looking for six times your salary, which no bank is likely to go near. If you want someone to tell you you're grand, then ask a mirror. Based on the info you've provided, you're vanishingly unlikely to get what you're looking for, and you'd be far better served looking into the best ways of getting a good price for the site.

joanna28

Hahaha desert...thanks again for reply lol.no im looking for options how much i coukd possibly borrow or how much i need to be earning to get near that figure etc.I csn brung wage up to 30000 and i do revieve commision as well.I dont want no amswers cant ne done not possible.I.want to know how I can make.it happen:)payments will.not be thousand euro..800 tops on mortgage.its affordable for me but how i prove to bank i can???

desertcircus wrote: »

Presuming monthly repayments of a thousand euro, you're looking at having to prove to the bank that you can live on half the amount you currently do. You're also looking for six times your salary, which no bank is likely to go near. If you want someone to tell you you're grand, then ask a mirror. Based on the info you've provided, you're vanishingly unlikely to get what you're looking for, and you'd be far better served looking into the best ways of getting a good price for the site.

Stheno

joanna28 wrote: »

Hahaha desert...thanks again for reply lol.no im looking for options how much i coukd possibly borrow or how much i need to be earning to get near that figure etc.I csn brung wage up to 30000 and i do revieve commision as well.I dont want no amswers cant ne done not possible.I.want to know how I can make.it happen:)payments will.not be thousand euro..800 tops on mortgage.its affordable for me but how i prove to bank i can???

Bank guidelines are three times the principle earners for most of the banks so to get a mortgage of 150k you'd need to have a basic income of 50k per year, (not including commission) and at least 10% of the total mortgage, banks will not give 100% mortgages anymore.

joe316

joanna28 wrote: »

Hahaha desert...thanks again for reply lol.no im looking for options how much i coukd possibly borrow or how much i need to be earning to get near that figure etc.I csn brung wage up to 30000 and i do revieve commision as well.I dont want no amswers cant ne done not possible.I.want to know how I can make.it happen:)payments will.not be thousand euro..800 tops on mortgage.its affordable for me but how i prove to bank i can???

Grand so, so yes you are going to get the mortgage! That better?

But seriously you are NOT going to get the mortgage and since you want facts here:

- You do not mention that you have savings, is that correct? Min you need is 15k, have you got this? Bank will expect you to spend this money first before allowing you draw down any funds.

- If you can get the 15k by other means, have you been saving 1000 a month for at least 6 months? And yes I mean a 1000 a month, 800 might be your repayments but you WILL be stressed tested 2% over the current interest rates hence why I said 1000

- Commission is not taken as income by the bank

- Your salary at 25k (which what it is at the moment), would approx mean you take home 1700 a month, a single person is expected to spend 1000 a month on themselves after a mortgage is taken out so at that income you have 700 a month to pay on a mortgage. They will NOT give you more than this difference for a mortgage, so you would be able to get about 123k

- Salary at 30k is just over the 2000 a month mark, this would be just about doable for 150k but I dont believe for one second a bank will approve a 150k build on a 2000 sq ft house, €75 a sq ft is really borderline and there WILL be overruns.

Best thing for you to do is to get your salary to 30k and save at least 1000 a month for the next 6 months and then apply but you will still need the deposit. Your current home will NOT count as your deposit unless you were selling it.

joe316

Stheno wrote: »

Bank guidelines are three times the principle earners for most of the banks so to get a mortgage of 150k you'd need to have a basic income of 50k per year, (not including commission) and at least 10% of the total mortgage, banks will not give 100% mortgages anymore.

Thats just not true, the multiple guideline is gone.

The following are the general rules for working out mortgage affordability.

Take home salary - Cost (below) = Mortgage affordability

Single person = 1000
Couple = 2050
Per Child = 250

joanna28

Thanks joe
So can you explain..1000 for single person..is this ho much disposable income,i should have after mortgage bills etc to be eligible..:-))

joe316 wrote: »

Thats just not true, the multiple guideline is gone.

The following are the general rules for working out mortgage affordability.

Take home salary - Cost (below) = Mortgage affordability

Single person = 1000
Couple = 2050
Per Child = 250

desertcircus

joanna28 wrote: »

Hahaha desert...thanks again for reply lol.no im looking for options how much i coukd possibly borrow or how much i need to be earning to get near that figure etc.I csn brung wage up to 30000 and i do revieve commision as well.I dont want no amswers cant ne done not possible.I.want to know how I can make.it happen:)payments will.not be thousand euro..800 tops on mortgage.its affordable for me but how i prove to bank i can???

You're going to need to show that:

1. You've been saving at least a thousand a month for the last six months (taking stress testing into account, they'll want to see at least a thousand).
2. You have a completely bulletproof budget laid out demonstrating that even if prices and costs overrun horrendously, it will still cost you no more than about 110k.
3. You're willing to use your home as a personal guarantee in the event of things going wrong.

Unless you have those three things, no bank will touch you. Even with them, it's going to be a long shot.

desertcircus

joe316 wrote: »

Thats just not true, the multiple guideline is gone.

The following are the general rules for working out mortgage affordability.

Take home salary - Cost (below) = Mortgage affordability

Single person = 1000
Couple = 2050
Per Child = 250

The multiple rule is looser than it once was, but it's not gone.

joe316

joanna28 wrote: »

Thanks joe
So can you explain..1000 for single person..is this ho much disposable income,i should have after mortgage bills etc to be eligible..:-))

Yup, exactly.

Bank will before they do anything will subtract your particular amount and then work what sort of mortgage you can afford but this amount is stress tested to 6%

But also out of this left over they will subtract any loan repayments as well.

joanna28

)))
I can not save as been paying out 800 on loams last few months to clear debt ...so..sure thats sumilar to savings record and have something to show for it...yes id say 130 tops ill be able to borrow .
Thanks for reply )))

desertcircus wrote: »

You're going to need to show that:

1. You've been saving at least a thousand a month for the last six months (taking stress testing into account, they'll want to see at least a thousand).
2. You have a completely bulletproof budget laid out demonstrating that even if prices and costs overrun horrendously, it will still cost you no more than about 110k.
3. You're willing to use your home as a personal guarantee in the event of things going wrong.

Unless you have those three things, no bank will touch you. Even with them, it's going to be a long shot.

Stheno

joanna28 wrote: »

)))
I can not save as been paying out 800 on loams last few months to clear debt ...so..sure thats sumilar to savings record and have something to show for it...yes id say 130 tops ill be able to borrow .
Thanks for reply )))

No it's not, it's almost the opposite, as you've had to borrow due to not being able to save for something that you wanted/needed in the first place imo