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€30K Loan/Mortgage

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  • 19-08-2014 8:49pm
    #1
    cherrytaz
    Registered Users Posts: 481 ✭✭


    Hi all,

    I'm currently looking at purchasing an apartment as a first time buyer with the cost of the property approximately €40k. I plan to invest €10k with the remaining €30k either from a loan or mortgage (both ideally over a 10 year term)

    Any suggestions as to how I should progress or the best route forward? I see some Banks don't provide mortgages under €40k and many of their loans are at high interest rates.


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    #2
    coylemj
    Registered Users Posts: 25,437 ✭✭✭✭coylemj


    If it's available for only €40K then there is a risk that the bank's valuer will say that's it's unsaleable for the same reasons as why it's so cheap in the first place. Possible reasons for why it's so cheap may be that it's in an incomplete development or in a rundown part of town or in a small village with a glut of unsold apartments - all of which may be cause for the bank to refuse on the basis that if you default and they repossess, they won't be able to sell it. I'm speculating here to save you having to tell us how it's going for such a small price.

    In terms of where to go for the loan, do you have a bank account at the moment? Best bet is usually to ask your present bank because if you have no history of paying back previous loans, you will find it very difficult to get a loan in the first place from anyone but your present bank.


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    #3
    cherrytaz
    Registered Users Posts: 481 ✭✭cherrytaz


    Thanks for the reply. The apartments are actually in finished developments but prices are beginning to move hence the decision to perhaps purchase. I do indeed have a bank account with a good savings history and also a credit union account with similar good savings history.

    The reason for looking into this is that I have approx €10k that I would like to invest. I have this is my bank savings account but the small amount of interest that it would potentially earn would be diminished with DIRT. My though process behind an apartment is as follows:

    • 10k investment on my behalf
    • 30k loan/mortgage over 10 years resulting in €310 monthly repayments
    • I've done a 10 year cost analysis for it including PTRB fees, Property tax, community fees for upkeep of apartment block, stamp duty, legal fees and home insurance
    • Potential rental income of €440 per month and I can on my current salary afford not to have it rented
    • After 10 years the apartment would have paid for itself and I would then hopefully own a 50/60k (all going well) asset

    Any comment on the above is welcome or indeed any other investment strategies for €10k


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