The 20% deposit - is there any way around it for a 2nd property??

Barack Obama

BattleCorp wrote: »

I would have thought that, given your circumstances, you would be a good candidate for getting a second mortgage. (Good equity, good savings etc.)

Have you tried any banks yet?

Yes, we have full loan approval for up to €450k with KBC (same as Jen it appears!).

I never asked about a 90% LTV mortgage because I simply did not think it was possible. I'm certainly going to check now!

Barack Obama

Jen44 wrote: »

Its with KBC.

Thanks Jen. One last thing - did this have an impact on the total that you could borrow? What I mean is, would they let you borrow more with an 80% LTV than a 90% LTV.

Rew

Barack Obama wrote: »

Thanks Jen. One last thing - did this have an impact on the total that you could borrow? What I mean is, would they let you borrow more with an 80% LTV than a 90% LTV.

As far as I know it doesn't but the rate you will get wont be as good as the 80% LTV so that might have an impact (if they thought the higher repayments were too much).

Jen44

To be honest we didn't ask how much we could actually borrow, we had a house lined up so just asked for the 295k we needed to buy that. It was a good bit below the 3.5 times our combined annual income so I think that did have some bearing on it. They also did mention to us the fact that our 1st house was in an area with a huge rental market made them a bit more comfortable with the whole thing. Especially as our first house was in around 20K neg equity at the time. If we sold it now we would prob break even. They did mention you could only be exempt from one of the new rules so if the amount we wanted to borrow was above 3.5 times our combined salary I don't think they would have approved us. The rate we got was not as good as the 80% LTV loan. But it didnt concern us as we were living out in in drogheda commuting every day to dublin with a small baby so we were just delighted to be getting back to dublin.

antoinolachtnai

The OP should be able to get the loan, at least in principal. They can borrow at least 70 percent of the overall combined value of the two properties. There is plenty of equity. The 20 percent role doesn't really bear on the situation at all. They need to talk to the bank or the agent.

Whether it is really a good move for them is another question. They need to work that out.

dearg lady

Barack Obama wrote: »

Of course it is only worth what someone will pay, but as someone in the exact same situation has already explained, the market appears to be completely stagnant.

Perhaps the markey is stagnant as so many sellers have their expectations set too high. It doesn't matter how 'stagnant' the market is, there is a level at which your house will sell, but you, presumably do not wish to sell it at that level

Butters1979

dearg lady wrote: »

Perhaps the markey is stagnant as so many sellers have their expectations set too high. It doesn't matter how 'stagnant' the market is, there is a level at which your house will sell, but you, presumably do not wish to sell it at that level

Or to put it another way, there is a level at which a house will sell, but you as a buyer, are not willing to buy it at that level. It's not stagnant, it's toxic.

If people are not in a rush to sell, and can therefore wait and see how this plays out (I for one expect it to pick up again in the new year as people come back to the game with another years savings) or people can't sell for lower due to equity issues, then it is not about expectation, it is about practicality.

Also the more vendors refuse to lower their prices, the less sales happen, and therefore competition to buy increases, driving back up what buyers are willing to spend, bringing the vendors who won't lower their prices back into play.

Swings and roundabouts.

dearg lady

Butters1979 wrote: »

Or to put it another way, there is a level at which a house will sell, but you as a buyer, are not willing to buy it at that level. It's not stagnant, it's toxic.

If people are not in a rush to sell, and can therefore wait and see how this plays out (I for one expect it to pick up again in the new year as people come back to the game with another years savings) or people can't sell for lower due to equity issues, then it is not about expectation, it is about practicality.

Also the more vendors refuse to lower their prices, the less sales happen, and therefore competition to buy increases, driving back up what buyers are willing to spend, bringing the vendors who won't lower their prices back into play.

Swings and roundabouts.

Well unless OP as a seller reduces the price to about 150k I wouldn't be the buyer in this case!

I agree it is a kind of stalemate situation. However there is a constraint around what people are ABLE to purchase for, even putting aside their preferences. For those in negative equity there is of course a constraint again around what thwy are able to sell for. For a person selling without these constraints there is likely a bit more leeway.

Butters1979

dearg lady wrote: »

Well unless OP as a seller reduces the price to about 150k I wouldn't be the buyer in this case!

I agree it is a kind of stalemate situation. However there is a constraint around what people are ABLE to purchase for, even putting aside their preferences. For those in negative equity there is of course a constraint again around what thwy are able to sell for. For a person selling without these constraints there is likely a bit more leeway.

Agreed, I was lucky enough to find the new mortgage rules probably helped me buy by reducing competition and pressuring the vendor to take what they can get.

Buying or selling, it's a lot of money to jump into a decision and it feels like people are holding back to see where the chips fall. Christmas is coming up to so things slow down anyway.

A little of topic but to get back to the OP. Your house may well sell for your valuation in 6 months, the questions is can you wait that long. I'd imagine a bank would be willing to give you a loan in January (when their quota's reset) if you discussed the circumstances based on the equity in your old house and it's 'rentabilty' (is that a word). The risk is things go south and you just end up with negative equity and two properties.

I Am The Law

I Am The Law wrote: »

Don't forget someone has to have a 20% deposit (€100k) and an income of €400k / 3.5 (114k per annum) for the remainder if they are to buy your house.

Barack Obama wrote: »

Not really - it's a 5 bed detached house so wouldn't exactly expect a 1st time buyer to be opting for it...

Those trading up after they sell there own house and pay off the existing mortgage may have the €100k deposit but will still have to get €400k mortgage to buy your house.

April 73

Not necessarily. That's a how is a piece of string conundrum?

Depending on when people bought, how much they paid off the mortgage over the years etc etc., trader-uppers could easily have €200k-€300k to put down as a deposit. Suddenly the €500k house needs a mortgage of let's say €250k. Considering the average mortgage in the country is around €170k, that's very do-able.

Anyone who bought in the late 90s, early 00s could easily be in this position along with being established in careers & earning reasonable salaries.

Barack Obama

April 73 wrote: »

Not necessarily. That's a how is a piece of string conundrum?

Depending on when people bought, how much they paid off the mortgage over the years etc etc., trader-uppers could easily have €200k-€300k to put down as a deposit. Suddenly the €500k house needs a mortgage of let's say €250k. Considering the average mortgage in the country is around €170k, that's very do-able.

Anyone who bought in the late 90s, early 00s could easily be in this position along with being established in careers & earning reasonable salaries.

Exactly.

Rew

Barack Obama wrote: »

Exactly.

We all can come up with any number of scenarios for how someone would buy a 500k house or not buy it but real world in your case, from your own words is they haven't so far.

Rew

khamilto wrote: »

Which matters not at all to the thread topic of "Is there any way around the 20% deposit for a 2nd property?"

Why do so many people want to berate him for a decision he has already made and a question he hasn't asked?

If you check back I helped with the answer to the original question already.

Totally not berating, just engaging in the conversation as its gone which the OP is part of.

I Am The Law

khamilto wrote: »

Which matters not at all to the thread topic of "Is there any way around the 20% deposit for a 2nd property?"

Why do so many people want to berate him for a decision he has already made and a question he hasn't asked?

A rule brought in to prevent another property bubble and protect people from over stretching themselves, if we all find "a way around" then what is the point of the rule?

antoinolachtnai

It's not a matter of finding a way around it. The rule (see the actual rule at https://www.centralbank.ie/press-area/press-releases/Pages/CentralBankannouncesnewregulationsonresidentialmortgagelending.aspx) doesn't really restrict the OP. The OP can borrow 80 percent against the new home and the remainder against the existing property. The OP's income will be increased by the rent from the existing property.