Unusual Mortgage situation

Effects

Wow, so the cost of the site is about €160,000 before building costs and developer profit. For a 90 sqm 3 bed. Up a crummy lane, with trains rattling past every ten minutes.

brisan

jlm29 wrote: »

Your partner may struggle to get a mortgage of that size to build a house on land that she doesn’t own? And there will be considerable tax implications if you transfer it into joint names. Just something else to consider

Getting married would solve that

ted1

Effects wrote: »

Wow, so the cost of the site is about €160,000 before building costs and developer profit. For a 90 sqm 3 bed. Up a crummy lane, with trains rattling past every ten minutes.

Yep, the council levy is 8100 on 90 Sq m house.
2722 for Irish water Freshwater
3929 for Irish water, wastewater
3500 for ESB new connection

So that’s up to 178k before planning, artchitect , solicitor fees. And about €2,700 a sq m ( 243000)
So €421,000 + architect +Solicitor +planning

Effects

Seems a bit cheap on the Irish Water costs. Doesn't it vary depending on how easy/hard it is to provide services?
The works they were quoting me were in the region of €18,000, for a one off house.
It was when they were still changing over from DCC so was really difficult to deal with them.

dubrov

Effects wrote:

Seems a bit cheap on the Irish Water costs. Doesn't it vary depending on how easy/hard it is to provide services? The works they were quoting me were in the region of €18,000, for a one off house. It was when they were still changing over from DCC so was really difficult to deal with them.

I think it's a flat rate now but closer to 6k than 4k if I remember right

ted1

Effects wrote: »

Seems a bit cheap on the Irish Water costs. Doesn't it vary depending on how easy/hard it is to provide services?
The works they were quoting me were in the region of €18,000, for a one off house.
It was when they were still changing over from DCC so was really difficult to deal with them.

Prices were up to 10m as the properties in Dublin it should cover.

https://www.water.ie/connections/information/connection-charges/

Happyhouse22

Hey guys just to update people on this situation.

In the end we didn’t approach the banks about the mortgage- we reduced the scope of the project (removed external works, finished etc) and got price down to 480,000.

Getting a loan of 180,000 from my father (nominal interest rate of 0.5%) which will be written off against the small gift exemption.

lawred2

Happyhouse22 wrote: »

I have planning permission for a house on a site in an urban area , which I own, currently valued at €350,000.


I have €300,000 available to build a house, however after contacting a number of builders in the area it seems the house will cost €540,000 to €570,000 to build to a high standard including finishes.

Therefore I would like to get a mortgage for the remaining ~€250,000.

The issue is that my salary is only €40,000. This means I can only borrow €140,000 as an individual with current rules, are any exceptions made considering the low loan to value ratio in the case?

There's nothing unusual here. Just another person trying to extend themselves behind their capabilities.

E: Ah old thread

See things have moved on since.

Best of luck with it.

Bass Reeves

Best of luck OP

Happyhouse22

Happyhouse22 wrote: »

Hey guys just to update people on this situation.

In the end we didn’t approach the banks about the mortgage- we reduced the scope of the project (removed external works, finished etc) and got price down to 480,000.

Getting a loan of 180,000 from my father (nominal interest rate of 0.5%) which will be written off against the small gift exemption.

That all makes sense. Pity you couldn't get the ideal house, but can improve over time.


And the €180k will likely be paid off against inheritance so you are in a very good position.


But, were you not tempted to get a smaller mortgage based on your own income to complete as desired?


And fair play to your dad to be in a position to help you.

Happyhouse22

Deleted User wrote: »

But, were you not tempted to get a smaller mortgage based on your own income to complete as desired?


And fair play to your dad to be in a position to help you.

We definitely considered it but really liked the idea of not having to get a mortgage for a few reasons. My father is loaning us the money effectively interest free which will be a huge saving in the longer term.
Most of the stuff removed can be added in the future. For example an outside patio area - the fundamentals of the house are still all there.

grassylawn

Sell the land. Quit the job.
Move to country and get nicer house for 200k.
Work part time. Live comfortably off that and remaining 450k.

JoChervil

Happyhouse22 wrote: »

We definitely considered it but really liked the idea of not having to get a mortgage for a few reasons. My father is loaning us the money effectively interest free which will be a huge saving in the longer term.
Most of the stuff removed can be added in the future. For example an outside patio area - the fundamentals of the house are still all there.

Still if I were you, I would redesign it. You were thinking about helping yourself with rent a room scheme. Why having a stranger in the house? I would redesign it in a way extracting a comfortable one bedroom flat on the ground floor to rent it out. It could be later connected to the house or stay separate for one of your parents, if there would be such a need.

Also you don't know the future. While everything should be taken into consideration. You might split with your partner. If you had kids, she would have granted the house till kids are out of college. And it doesn't matter, if you were married or not. So in such case you would have a place to move in and stay closer to kids. I don't think you could afford another place for yourself in such a case.

I wouldn't put all mu eggs in one basket...

Happyhouse22

grassylawn wrote: »

Sell the land. Quit the job.
Move to country and get nicer house for 200k.
Work part time. Live comfortably off that and remaining 450k.

I don’t think this is an option based on family circumstances, to be honest it’s an amazing location so happy to have it.

I probably can’t do it now - but in the future selling part of the land could be an option- the house is on about .9 acre but but probably only needs 0.4 acre to maintain the house, gardens and environment in their current (pretty spectacular) form. Could sell the other 0.5 acre, which with planning could be worth quite a good bit.

Happyhouse22

JoChervil wrote: »

Still if I were you, I would redesign it. You were thinking about helping yourself with rent a room scheme. Why having a stranger in the house? I would redesign it in a way extracting a comfortable one bedroom flat on the ground floor to rent it out. It could be later connected to the house or stay separate for one of your parents, if there would be such a need.

Also you don't know the future. While everything should be taken into consideration. You might split with your partner. If you had kids, she would have granted the house till kids are out of college. And it doesn't matter, if you were married or not. So in such case you would have a place to move in and stay closer to kids. I don't think you could afford another place for yourself in such a case.

I wouldn't put all mu eggs in one basket...

Thanks for the advice, I see what you are saying but think it’s too late to change things now.

If my relationship breaks down and my partner gets the house, ya it will be unfortunate and I’m sure I will resent it- but at the same time I’m not sure it’s a way I can live life- like if this I’d what ai am basing my decisions on should I not break up with her now? I love her and hope to spend the rest of my life with her and feel like it’s reasonable to make life decisions based on this.

JoChervil

Happyhouse22 wrote: »

Thanks for the advice, I see what you are saying but think it’s too late to change things now.

If my relationship breaks down and my partner gets the house, ya it will be unfortunate and I’m sure I will resent it- but at the same time I’m not sure it’s a way I can live life- like if this I’d what ai am basing my decisions on should I not break up with her now? I love her and hope to spend the rest of my life with her and feel like it’s reasonable to make life decisions based on this.

Well, I gave my advice on information, you gave us. I had an impression, that you were reluctant to merry and take mortgage together, which would be the simplest and the most obvious solution.

But obviously I was wrong then...

Happyhouse22

JoChervil wrote: »

Well, I gave my advice on information, you gave us. I had an impression, that you were reluctant to merry and take mortgage together, which would be the simplest and the most obvious solution.

But obviously I was wrong then...

No don’t worry. I initially started the thread because I wanted to know if it would be possible to get a mortgage just based on my own salary, I quickly learned that I couldn’t and the conversation morphed into something else.

The reason I was looking at getting a mortgage alone was mainly because the land is in my name and I thought transferring it into our joint names when we are unmarried would generate a sizeable CAT liability. Addditionally (and we haven’t done any research on this) my partner is interested in purchasing an apartment in her home country as an investment in the future, attractive incentives exist there for first time buyers and we thought if her name wasn’t associated with this house she may still be eligible for them.

KevinK

Good luck, sounds like it working out well!

Happyhouse22

Latest update on this is that building has now started and we are on course to be moving in a few months!

Thanks again for all the advice I got here.

Bass Reeves

Happyhouse22 wrote: »

Latest update on this is that building has now started and we are on course to be moving in a few months!

Thanks again for all the advice I got here.

Glad you got it over the line.

Happyhouse22

Moved in a few months ago. Thanks for all the advice

Bass Reeves

Well done.