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Remortaging to buy a second property

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  • 08-12-2004 12:22am
    #1
    Aim2Please
    Closed Accounts Posts: 43 ✭


    How is everybody?

    Just thought I would ask the experts about how to raise the necessary funds for buying a second property. I own a house in Limerick worth 175k, mortgage owed is about 150k. I am now living and renting again in Dublin. I want to buy a property in Dublin to live in, over the next couple of months. Loooking at prices around the 230k mark. How do I go about getting the 10% deposit and 4% stamp duty without paying it all in cash??? HGow much equity could I get? I have a credit union account also. Anyone know what their max lending criteria usually are?

    Thanks to anyone who can provide advice. I will invite you all to the house warming! -)


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    #2
    antoinolachtnai
    Registered Users Posts: 9,787 ✭✭✭antoinolachtnai


    Can we take it you are renting the house in Limerick? This is a little tricky. Make sure you understand the tax implications of renting your house out (pay tax on all the rent - certain expenses - interest).

    On the face of it, it looks like you have a EUR 900 mortgage in Limerick, but are only receiving 750 euro rent. (What is rental like in Limerick by the way?) You probably owe about 125 euro in tax on this. This would mean you are 275 euro/month in the hole before we even begin.

    I have to say that I don't think this looks particularly good, but it's worth a try, because banks love people with second properties (easier to foreclose on, apart from anything else).


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    #3
    Aim2Please
    Closed Accounts Posts: 43 ✭Aim2Please


    Thanks for the reply. The mortgage was taken out about 2 years ago and over 30 year term. My current monthly payments - relief = 630 euros. Yes the house is rented out in Castletroy, near the University for 600 euro a month. I went a bit on the low side, just to make sure I got someone quick, there is currently a lot of rental property in that area.

    I just can't afford to raise a cash deposit, plus stamp for a second property and probably 3k for solicitor's fees.
    Not unless I saved for another 2 years! I mean you're talking 40k really.


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    #4
    antoinolachtnai
    Registered Users Posts: 9,787 ✭✭✭antoinolachtnai


    Well, to add to your woes, you probably owe some extra tax now on your rent, maybe a few hundred euros. It will be hard to refinance that house in these circumstances. Still, don't give up hope.


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    #5
    decbuck
    Closed Accounts Posts: 315 ✭✭decbuck


    I don't think you will get one penny out of re-mortgaging the limerick house. You haven't even paid off 15% of the value of the house.


    Usually back would want at least 30% before offering you money on it.

    Let us know how it goes.


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