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Buying a site

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  • 03-01-2014 11:19am
    #1
    Invalid user
    Registered Users Posts: 20 ✭


    Hi guys, I am currently considering buying a site, there is an old house on the site so you could say I am buying a house either. I have some saving but only enough to fund approx 50% of the cost of purchase. I would prefer to keep this cash for further down the line to pay for council fees, architectural and surveyors costs etc. Has anyone out there any experience with getting a mortgage from the bank for example for say €300,000 approved in principal and initially drawing down €50,000 (example) to buy the site and not draw down the rest for a period of time, example, 12-18 months and get a mortgage interest rate from day 1 on the repayments of the site and once planning is secured and the building costed draw down the rest as required. This would make far better better business sense than getting say a credit union loan at much higher interest rates for the initial purchase of the site.


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    #2
    hexosan
    Registered Users Posts: 1,736 ✭✭✭hexosan


    The short and simplest answer is not a hope in hell of getting a mortgage company to agree to this in the current climate.

    Even getting the approval for 300k will be an issue plus normally with mortgages the draw down of each stage payment must take place within 6 months of the last.


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    #3
    Invalid user
    Registered Users Posts: 20 ✭Invalid user


    That's what I'm thinking myself. The difference in Interest rates for a personal loan and a mortgage is massive and the fact that a site with an old house on it is equity I would have hoped there would be some sort of middle ground interest rate loan for buying a site/land/old house etc. but there doesn't appear to be one.. Infact looking at all the banks and credit unions personal loan calculators, the credit union is coming in the cheapest!


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    #4
    chefwes
    Registered Users Posts: 271 ✭✭chefwes


    Hi to the best of my knowledge if you can buy the site itself you can then secure your mortgage based on the site value. We bought our site from father in law and then secured our mortgage on the site value.


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    #5
    Invalid user
    Registered Users Posts: 20 ✭Invalid user


    Thanks chefwes, but we will be borrowing to buy the site so not sure we can release equity on it in that case.. My big issue is the rate of interest on the loan versus a mortgage rate, it's significantly different and it makes the credit union look good..


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