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Advice for buying with equity release.

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  • 15-07-2020 9:39pm
    #1
    Carlo11
    Registered Users Posts: 35 ✭


    Good evening everyone, I'd really appreciate some advice/perspective. We've found a house we want to upgrade to.
    I would normally have expected to get a 10% deposit exception from AIB (with whom I do all my banking) but that has obviously all stopped.
    House price is ~€500K. We have good equity in our current home, but don't have the full deposit. I'm in a fortunate position to be on good salary and while my wife works, we won't be using her salary for the mortgage application.
    The broker suggested we remortgage our current house and essentially get an equity release, while applying for another mortgage. Between equity release and savings we'll prove we have funds and can then make a bid.
    The issue is the amount of time it's taking to get feedback from the banks (through a good broker). I've been told based on salary, etc. we should easily get the mortgage. Time unfortunately is against us as the EA mentioned to us a cash buyer bid under the asking and it was refused. (House is only on the market two weeks.) Presumably they will make another offer for closer to asking - all the while we're waiting for approvals. (We've been waiting for an answer for about two weeks now.)
    I'm getting worried about the delay and so am thinking of getting a loan from the credit union in place of the equity release as I'm skeptical this will be offered, despite the big equity in our house. I don't want to sell before buying, but intend to do so thereafter.
    The idea of my current mortgage, new mortgage and credit union loan is a little scary (unless we take up the bank's offer to defer payments for the first six months). However, this really is the house we want so I'm willing to suffer a little.
    How crazy is the idea to get the credit union loan or do we wait on the bank to give the equity release? (Is this kind of release still happening?) Typically, if an EA has a close to asking bid, will they wait for an offer from someone who is waiting on approval? I'm willing to pay over the asking but it's not worth anything if I don't have proof of funds yet.
    Incidentally, as mentioned my wife works part-time. I omitted her earnings from the joint application as i didn't want it to complicate things and we didn't need it. However the bank came back and said they were reducing the amount I would qualify for, based on her paying tax but not being part of the application. The reduced amount is still OK for the mortgage so we didn't query it, yet it's three days and counting since I heard from them.
    Sorry for the essay but thanks for reading!


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