Morgage on Existing Property

Ronney

Looking for advice here folks on taking out a mortgage on an existing property.


I inherited a house off a parent and have moved into it. to cover tax/fees etc I'm looking to take out a mortgage to pay for them.

Looking for aprox €50K and the House is valued at €450K. Contacted my Bank and they said they would not be interested in that type of lending!

I'm mid 35, full time employed and no other debts.

They said they would only morgage an existing property for things like college fees or hospital bills.

Am I right to think this is a bit Ridicolous ? The loan to value on the property is 11%


I was looking to repay over 20-25 years at €250-300 a month which is well affordable considering I am not paying rent.
I would be looking to borrow less than 1x times my annual Salary

manonboard

Did you try any other banks?
They will be chalk and cheese. The next one will probably be very pleased to help you. It's commission for the sellers in some places. Helps meet their targets.
It's a bit mad by the sounds of it. 11% LTV, Assuming you have some stable finances already. I'm surprised they care what the money is for as along as its nothing wreckless or illegal which adds risk

davo2001

You would be mad to take out a €50K loan over 20-25 years! You would end up almost paying the same amount again over the life time of the loan amount.


Surely it would be more feasible to take it out over say 5-7 years at around €750 per month. That way you would only be paying back around €4-5K in interest.

If you're on over €50k per year (which you appear to be) then this should be easily doable.

witchgirl26

OP when I was looking at mortgages, ironically the one I'd done all my banking with my whole life was the worst one to deal with and least likely to lend to me. Definitely would agree with looking around.

Also with working out how much you'll be paying back over the lifetime of the loan. As Davo2001 said, you'd end up paying back a substantially higher amount that the €50k on a 25 year mortgage.

Ronney

Cheers for the replys,

Was planning on shopping round but was a bit surprised by my banks initial reaction.

On the term thing would plan to pay it off sooner (know I have a few grand due in a year and close to a bump in salary in about 6 months)

Just figured it would be easier to get a mortgage approval with only a small repayment. With a 700/800 payment would need to show a history of saving etc. for 6 months

Lolle06

That sounds very silly!

Could you not approach your local Credit Union?

4ensic15

One bank has a minimum mortgage amount of 200k. Some banks find it too much trouble to be bothered with mortgages of 50k. Some will do it some won't. Most will want a shorter term than 20--25 years.

Most Credit Unions will offer a 'home improvement loan' which is a mortgage in everything but name. They'll give you (up to) €100k and they'll want a legal charge on the house. Higher interest rate than a normal mortgage but could be an idea.

Cash_Q

+1 for the credit union. If you're not already a member, approach them and ask what you need to do to build up a relationship in order to borrow. You may need to spend some time depositing savings regularly before they'll lend to you but talk to them and see what they say

April 73

Sell the house & buy one at €380-€400k & have no debt?

Lumen

The final backstop is to just pay back Revenue over time.

Revenue charge 0.0219%/day on overdue income tax, corporation tax, capital gains tax, gift and inheritance tax.

So that's €4k/year on 50k, assuming you're paying off the interest rather than letting it compound.

ted1

Rent a room out and pay revenue gradually