Has anyone got a 2nd/3rd mortgage lately?

Babyboy09

And if so, who with?

Myself and my OH bought apartments in our single days, both of which are in negative equity but are rented out with rent almost covering mortgage on both.

We are renting elsewhere as we now have two kids and would like to buy a family home. We have over 25% of purchase price in savings, and no other loans but bank of Ireland wouldn't look at us? Is there any point approaching other banks or should we just resign ourselves to renting long term.

Lu Tze

Babyboy09 wrote: »

And if so, who with?

Myself and my OH bought apartments in our single days, both of which are in negative equity but are rented out with rent almost covering mortgage on both.

We are renting elsewhere as we now have two kids and would like to buy a family home. We have over 25% of purchase price in savings, and no other loans but bank of Ireland wouldn't look at us? Is there any point approaching other banks or should we just resign ourselves to renting long term.

You sound surprised? You both have mortgages already which are on properties in negative equity, and which the rent does not cover the mortgage payments.

To try and bring it back to a typical FTB mortgage application, how much deposit would ye have left if you sold both apartments and used your savings to to clear the remainder of both mortgages?

Dr_Kolossus

Yeah in 40 percent negative equity. Got approval from PTSb. We are going to rent current house when we buy new one. We have bout 90 k. Got approval for 280k

Babyboy09

Lu Tze wrote: »

You sound surprised? You both have mortgages already which are on properties in negative equity, and which the rent does not cover the mortgage payments.

To try and bring it back to a typical FTB mortgage application, how much deposit would ye have left if you sold both apartments and used your savings to to clear the remainder of both mortgages?

I don't think that selling them is an option. They are both let to the local authority on ten year leases so steady income.

Our mortgage would be cheaper than the rent we are currently paying and we are putting away over twice the prospective mortgage payments per month aside from that rent.

Lu Tze

Babyboy09 wrote: »

I don't think that selling them is an option. They are both let to the local authority on ten year leases so steady income.

Our mortgage would be cheaper than the rent we are currently paying and we are putting away over twice the prospective mortgage payments per month aside from that rent.

Im not suggesting you sell them, im just suggesting you look at it while balancing the liabilities and assets ie the negative equity versus your savings.

How much good is being able to come up with a 25% deposit from your savings, if your liabilites are greater than that.

Babyboy09

Lu Tze wrote: »

Im not suggesting you sell them, im just suggesting you look at it while balancing the liabilities and assets ie the negative equity versus your savings.

How much good is being able to come up with a 25% deposit from your savings, if your liabilites are greater than that.

So any suggestions? Do we start pumping money into the mortgages instead of saving? And then how do we manage to get a deposit together. That strategy looks like it would take at least ten years to buy again.

I want to put down roots now the kids are starting schools. I want to put up pictures on the walls and decorate the way I see fit. I want to get a dog. I am fed up renting!

earlyevening

Have you been paying income tax on your rental income? You don't mention that.

That could severely scupper your plans if you've neglected it.

Babyboy09

earlyevening wrote: »

Have you been paying income tax on your rental income? You don't mention that.

That could severely scupper your plans if you've neglected it.

Yes all above board, and fully tax compliant.

Eldarion

I can't believe you're surprised by you two are not getting another mortgage despite how far under water ye are.

Your 25% "deposit" is completely meaningless if it does not outweigh the combined shortfall of the two other property values versus their outstanding mortgage principles. To the bank assessor it actually shows a poor understanding of financing that you've built a "deposit" this high in a low yield account rather than using those funds to reduce the higher interest mortgage.

You'd need to be firmly in the black in terms of leverage for another "deposit" to count for anything during assessment.

I understand the need/desire for a house and I understand that you see it as straight forward as "Spending X on rent PLUS saving 2X while the proposed mortgage is only X!" but that's not the reality. That 2X savings per month should really be used to increase the principle repayments on your outstanding debts, or if they're on trackers, then in an investment vehicle that beats that interest rate after fees and taxes.

com1

Should be no problem - I would advise going to a mortgage broker

whippet

if you have a savings history to show the significant deposit (as opposed to being gifted the deposit) I don't see any reason why you shouldn't get approval. You obviously are financially sound - proven by being able to save.

TRS30

Dr_Kolossus wrote: »

Yeah in 40 percent negative equity. Got approval from PTSb. We are going to rent current house when we buy new one. We have bout 90 k. Got approval for 280k

Whats kind of salary if you dont mind me asking?

bobbyg

I have done it, bought an apartment during the boom which is now in approx 100k negative equity. Moved home to the in laws rented the apartment out and saved for two years with the other half.

We had no problem getting a second mortgage, got approval from AIB BOI and Ulster and went with Ulster in the end

First Mortgage was €272k with approx €230 outstanding
New mortgage €207k granted last year

Joint income just over €82k

marathonic

Leaving aside the negative equity aspect, I guess the big question is "do any of the banks take rental income into consideration when assessing a mortgage application". The last I heard was that they weren't for normal rentals but some were allowing it for long-term rentals to the council, i.e. those on a 10 year lease.

Babyboy09

Thanks everyone. Some food for thought there.
Contacted bank of property in worst negative equity regarding paying extra to reduce term and by paying a couple of hundred quid extra a month we can reduce term from 23 to 12 years so this may be the way to go.