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Mortgage for 2nd time buyers

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  • 12-03-2018 4:17pm
    #1
    ndilly
    Registered Users Posts: 52 ✭✭


    My husband and I are looking to get a mortgage and neither of us are first time buyers. I have now sold my property and his mortgage is being covered by rent for over 6 years. We have permanent jobs,a big chunk of savings and 2 kids. 3.5 times our salary is (€36500 + €38,000) €260,750 however the amount is being reduced significantly because of our children and our ages(38 and 40 this year). Does anyone know the rules on this or how much should be deducted.
    Not looking for massive mortgage but was hoping around €255 which we were originally quoted but our ages and kids seem to be reducing it. Any advise would be appreciated.


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    #2
    catrionanic
    Registered Users Posts: 2,091 ✭✭✭catrionanic


    Banks generally reduce your repayment capacity by €250 per child per month.

    You may be considered for an exemption though if your second property is being rented out.

    Im not an expert on this so don’t take it as gospel, but I also believe that they include the rent you receive as part of your income multiple. But they will subtract any outstanding mortgage owed on the rented property from the total.

    So for arguments sake, let’s say you earn 10,000 per annum in rent, and still owe €100,000 on the mortgage.

    The amount you can borrow would be your two salaries plus the 10,000, minus the 6,000 due to your kids, and then the total of this is multipled by 3.5.

    You then need to subtract 100,000 from this figure to account for the outstanding mortgage already in your partner’s name.

    It would likely work out better overall if your partner was to sell their rental property.


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    #3
    Marcusm
    Registered Users Posts: 10,325 ✭✭✭✭Marcusm


    ndilly wrote: »
    My husband and I are looking to get a mortgage and neither of us are first time buyers. I have now sold my property and his mortgage is being covered by rent for over 6 years. We have permanent jobs,a big chunk of savings and 2 kids. 3.5 times our salary is (€36500 + €38,000) €260,750 however the amount is being reduced significantly because of our children and our ages(38 and 40 this year). Does anyone know the rules on this or how much should be deducted.
    Not looking for massive mortgage but was hoping around €255 which we were originally quoted but our ages and kids seem to be reducing it. Any advise would be appreciated.

    What’s the position vis a vis negative or positive equity in his house. What’s the gross mortgage on that house? I suspect that you will have problems going for a max size mortgage on a family home if you also have a putative investment property with a large mortgage. Banks need to take account of repayment capacity (hence multiples of salary less costs for family size). If you have a contingent liability of the mortgage payments on the other property (etg failure to let it, default on payment of rent etc), I would expect the bank to restrict the amount of additional borrowings you can take on. Where you have modest income, this can be a significant restriction.

    Are you’d ure you are not better off selling the investment property?


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