Will I ever get a mortgage?

Saysha

I'm probably living in hope but just want to get a bit of help understanding whether or not I should even bother applying for a mortgage based on my following info:

-I earn 25000 a year and am on an annual increment of about 1000 per year. Permanent job in department of ed and I've worked in it for the past 4 years.
-Have a partner (who is self-employed, on a low income and has a bad credit rating so think I would be better applying as a single person)
-Have a child, will probably have 2 by the time I'd consider applying for a mortgage.
-Have a site in Meath which would be gifted by my parents. Currently living with them to save on rent costs.
-Would be self building a small enough house- circa less than 1800 square feet. Our families are all tradesmen so would have builders, plasterers, carpenters and plumbers at below cost.
- Have savings of 5000 and just starting to save 600 per month.

I know I would probably get a mortgage of less than 100,000 once my savings are built up but I'm pretty sure it's not possible to build a family home at that price. The biggest barrier is the 3.5 times salary limit. Am I just wasting my time even considering a mortgage?

handlemaster

Saysha wrote: »

I'm probably living in hope but just want to get a bit of help understanding whether or not I should even bother applying for a mortgage based on my following info:

-I earn 25000 a year and am on an annual increment of about 1000 per year. Permanent job in department of ed and I've worked in it for the past 4 years.
-Have a partner (who is self-employed, on a low income and has a bad credit rating so think I would be better applying as a single person)
-Have a child, will probably have 2 by the time I'd consider applying for a mortgage.
-Have a site in Meath which would be gifted by my parents. Currently living with them to save on rent costs.
-Would be self building a small enough house- circa less than 1800 square feet. Our families are all tradesmen so would have builders, plasterers, carpenters and plumbers at below cost.
- Have savings of 5000 and just starting to save 600 per month.

I know I would probably get a mortgage of less than 100,000 once my savings are built up but I'm pretty sure it's not possible to build a family home at that price. The biggest barrier is the 3.5 times salary limit. Am I just wasting my time even considering a mortgage?

1800 sq foot is now a a small house !! Do you really need to build a house that big ? If your just starting to save its a little early to start applying for a mortgage give it a year or more

Saysha

I suppose I am a little ignorant on house sizes. Most houses where the site is are much bigger so perhaps I was thinking 1800 sq ft is small in comparison, which I was obviously wrong to do. I'll have to do more research into more realistic square footage. Not planning on applying for at least 18 months.

Ursus Horribilis

Seeing as you've got family in the business, how about asking their opinion on how much it would cost to build a smaller house? To be honest, seeing as you're on a low wage and your partner's credit record is poor, you'd be mad to build something too big.

Stheno

How long are you and your partner together and how old is the child? Is the child your both? I.e. not from a previous relationship?

Atlantic Dawn

Having another child with mean an additional dependent and so reduce more the amount they will lend you.

Ursus Horribilis

How bad is your partner's credit record? How far back do his lapses go?

Regarding your career, are there any opportunities for promotion in your job? Any reasons why your partner's business isn't doing well? Would he be better off getting a job?

Saysha

My partner and I are together 10 years. Business has been slow for him and he's not in a position to find other employment currently. His bad credit is related to mobile phone bills only. Perhaps that isn't too major? Saying that, his business has improved substantially over the last few months and looks set to continue doing so but I don't know whether or not one year or so of good income on his part would be acceptable to a bank if we were to apply jointly in about 18 months. My job doesn't have any promotion opportunities without a return to full time education to qualify as a teacher (I'm a special needs assistant).

Stheno

Saysha wrote: »

My partner and I are together 10 years. Business has been slow for him and he's not in a position to find other employment currently. His bad credit is related to mobile phone bills only. Perhaps that isn't too major? Saying that, his business has improved substantially over the last few months and looks set to continue doing so but I don't know whether or not one year or so of good income on his part would be acceptable to a bank if we were to apply jointly in about 18 months.

Have you gotten a copy of his icb report? Mobile companies are not icb members

Saysha

Stheno wrote: »

Have you gotten a copy of his icb report? Mobile companies are not icb members

No but was considering getting him to request this so we can see where he stands. Will look into that, thanks.

Roger Mellie Man on the Telly

Saysha wrote: »

I suppose I am a little ignorant on house sizes. Most houses where the site is are much bigger

Employ an architect who will design a dwelling sized according to your needs. Architects are trained to make modest spaces feel generous.

I'm constantly astounded at the size, scale and utter hideousness of the majority of Irish houses.

johnnyskeleton

Have you considered an ecohome:

http://www.ecohouse.ie/products/post-and-beam/

http://loghouse.ie/three-bedroom.html

If those websites are accurate 50k will get you a good one and 70k a very nice one. Fully built.

Ursus Horribilis

Seeing as an ICB record only costs €6, he'd be mad not to http://www.icb.ie/cr_options.php

I don't know what the requirements are for self-employed people but when I was looking for my mortgage, the furthest back I had to go was 12 months. They wanted evidence of 12 months of savings. Everything else - bank statements, credit card bills, payslips etc. - they only wanted 3-6 months worth of them.

newacc2015

Saysha wrote: »

I suppose I am a little ignorant on house sizes. Most houses where the site is are much bigger so perhaps I was thinking 1800 sq ft is small in comparison, which I was obviously wrong to do. I'll have to do more research into more realistic square footage. Not planning on applying for at least 18 months.

Just because your neighbours are building McMansions, dont mean you have to either. Country houses IMO are horrific compared to city houses. In Dublin a hall is small and functional. In rural houses they tend to be massive for no reason. There is relatively luxurious houses in Dublin for sale and they are 2000 sq feet. If I were you, get house the designed by a Dublin architect who are used to maximising limited space.

Call a mortgage broker and ask them whether or not you will get a mortgage. I asked about a self-build mortgage about 6 months ago and they said only 2 banks are offering them

TheShow

Start saving hard now, as much as you can afford. The more you have saved, then the less mortgage you will need. Also the banks will see that you have been saving and it will work in your favour.
Don't worry about ICB as only banks & other lenders report to it. Mobile phone records will 100% not be on it.
Did the mobile phone co register a judgement or anything? If so that will cause issues.
If the bank accounts are untidy with unpaid items and excesses featuring, now is the time to start working on that and ensuring that there is always enough funds in the accounts to meet payments when they fall due.
The cost of childcare is a major factor in mortgage affordability. If you have to pay for childcare, and you're planning on a second child, then it might be worth securing mortgage approval before the second one arrives. Most approvals last for c6 months I think, but that can vary from bank to bank.
When you're ready to apply for a mortgage go to a mortgage broker, they will be able to give you a decent indication of what you would be eligible for and they will do all of the donkey work for you dealing with all of the banks.

most of the banks have mortgage calculators which provide a rough guide of what you could be approved for.

https://www.permanenttsb.ie/whatweoffer/mortgages/my-first-mortgage/

johnnyskeleton

Odus fell down wrote: »

I don't know what the requirements are for self-employed people but when I was looking for my mortgage, the furthest back I had to go was 12 months.

2 or 3 years certified accounts.

triple nipple

johnnyskeleton wrote:

Have you considered an ecohome:

Amazeballs

hytrogen

It's an absolutely crazy idea but have you asked your parents about building on an annex to their home perhaps?
A family friend of mine is quite elderly now and about 10 years ago her eldest son built on an annex for him & his new family, mostly because they enjoyed the rural locality while thinking ahead for looking after his mum. It was done very very tastefully, a two story extension onto a bungalow. The family can run amuck while down the corridor granny is on call, has the original kitchen diner living, bedrooms etc.
It saved him a fortune trying to buy & build on a new site or even purchasing a new build up the road in the village. The planning took a while because it was a two story extension but was agreed as it wasn't overlooking anyone and as I mentioned, done exceptionally well with good taste & privacy.

MarkAnthony

Why not build the house in such a way that you can extend.

1800Sq feet. I love Ireland lol. That's a freaking mansion. I recently bought a 1200Sqft home it's one and a half time bigger than the house my brother and I grew up in. The previous owners had 4 kids in it!

Saysha

Ok so I've been looking at plans and have found nice 1200 sq ft house plans with room for attic conversion in the future. Using these as a guide for what we'd like. So assuming 100euro per sq ft (could I go much lower due to family in the trade?) we'd be looking at a 120k mortgage. Is 10% deposit really all that's necessary or would we be more likely to secure a mortgage if we had closer to 15-20%? Sorry I realise I sound completely ignorant but it's all new to me.

Would love to build an Eco house but wouldn't know where to start. Is it really all that cheaper to build or is the initial outlay of money not huge in order to reap the benefits re heating costs etc over the years?

handlemaster

handlemaster wrote: »

1800 sq foot is now a a small house !! Do you really need to build a house that big ? If your just starting to save its a little early to start applying for a mortgage give it a year or more

If you are building a house you are better off to build it too big than too small. The cost difference is not going to be massive and you will have a far better house with more space if you need it. It would be madness to build a small house when doing a self build imo. Look at anyone who is having a house build they always go far bigger than their needs in case its needed in future.

Personally I'd build as big a house as possible if/when I'm doing a self build at least 2500sq feet anyway if not bigger.

1800sq feet wouldn't be considered a big house in a rural area, it would be on the small side. You wont find many people building under 2000sq feet and most are pushing mid 2000s upwards.

TheShow

the best thing to do at this stage is:
Talk to your family members about the type of house you want to build.
Figure out what the ballpark cost is going to be and work from there.
FTB deposit is 10%, but i'm not 100% if self builds fall under the same category, so you need to check that out.

If the cost to build and fully complete the property is 120k, then 10% deposit is 12k and mortgage required of 108k. But also you will need funds for stamp duty & legal fees and other associated costs.