Second Mortgage Query

crby

I'm currently living in a 2 bed apartment and i'm looking to move in the new year. I have €137,000 left on my mortgage and i'm not in negative equity. I'd make possibly about €40,000 on the sale. However i have €70,000 (combination of savings, a previous redundancy & a gift from family) aside so ideally i'd like to be able to keep the apartment as an investment (already have potential tenants lined up) and then get a second mortgage as the rent income would easily cover my mortgage repayments on the apartment.
My concern is that im a single applicant earning approx 36,000 a year so im worried i wont get a second mortgage. I'm intending on setting up a meeting with a mortgage advisor to discuss but i'd just like to get some other opinions from you good folk...

Cheers

crby

i was just on to BOI there and they advised me that i wouldn't be suitable due to disposable income and i'd have to show that i was able to meet both mortgage payments should there be a time that i'll have to pay both mortgages.
Looks like selling up is the only option...unless anyone has any further advice?

HeidiHeidi

Well the banks are the ones who are going to lend the money, so if they say no go, then I can't see any other option really.

Maybe try a few other banks, or find an independent broker who would have contacts around the lending institutions.

crby

Thanks HeidiHeidi looks like my only option!

Trish56

Very hard to give a clear answer as need more information such as :
What is purchase price of new property?
How much do you save monthly.
What is interest rate and term o/s on your existing mortgage.
What is your age and do you have dependents.
Do you have any short term borrowings
What rent will you receive for the 2 bed apartment.

Uriel.

I think that given your circumstances op you'll find it difficult to get a second mortgage. But it depends on so many variables, not least the purchased price of the new property and how much of a mortgage you require.

We got a second mortgage this year and the first property is slightly in negative equity but there's two salaries for us, we could show steady rental income from the first property, a decent deposit and savings history and gift monies. We were only looking for an LTV of circa 66%

We used a broker and it was the best choice we could have made. Would definitely recommend a broker when seeking a mortgage in anything but normal circumstances

crby

Thanks Trish & Uriel for the replies, much appreciated.

Trish - I'm looking at properties in the region of €190-200,000

I haven't being saving consistently but have €70,000 aside with most of it being a combination of a gift and a redundancy from few years back.
I'm 33, single with no dependents. The only loan i have at present is approx €1000 with the credit union which can be paid off if needs be.
I should easily receive between €1000-1200 in rent for the apartment, and i have tenants lined up if this becomes possible.
I was thinking if i rented out one of my rooms for a period would this help with my chances?

I'll get back to you with the rate if my current mortgage but theres approx €137,000 left on it with about 27-28 years to go....

crby

Hi Trish

Just following on from above...
I can confirm that my interest rate is 3.74% (variable) with 37 years left

Thanks

Trish56

crby wrote: »

Hi Trish

Just following on from above...
I can confirm that my interest rate is 3.74% (variable) with 37 years left

Thanks

I don't think crby that you can retain your existing property and rent out and get a mortgage for a new property based on your income of 36k and the fact that you have no regular savings. Under Central Bank Regulations you can only borrow up to 3.5 times your income = 126k.

crby

Thanks Trish, i was thinking as much, appreciate the feedback though!