More than 2 people applying for a mortgage

Musicrules · 18-05-2024 10:18am #1

I've tried googling and this seems possible but I can't find too much information on this.

So my daughter is looking to buy a house but can't at the moment as house prices are so high. A group of friends have said that they'd like to go in together to apply for a mortgage. There's 4 of them and from searching, it looks like the limit is 4.

Now, I'm not looking for advice on whether this would be a good idea or bad idea, I'd just like to know if anyone has any experience of this or knows how to get more information on it? I know most lenders won't allow more than 2 applicants but are there some that do?

If solid agreements are put in place, it could be an option for my daughter to get on the 'property ladder'.

Calahonda52 · 18-05-2024 10:29am

The issue here is how any of them exit the deal if they want to

The other fact is the the bank will most lightly want joint and several g/tees so you daughter is exposed for the 100% loan for 25 of the asset.

Since the polygamy referendum didn't pass, it can never be a family home so bank can foreclose

Musicrules · 18-05-2024 10:36am

https://www.boards.ie/discussion/comment/122152491#Comment_122152491

Thanks for the reply. Yes, those sort of issues would all have to be ironed out. But before all that, would it be possible? What lenders can be contacted in relation to this?

KaneToad · 18-05-2024 10:41am

These situations rarely go well. When ppl start to get paired off with significant others the whole game changes.

JVince · 18-05-2024 10:45am

Highly unlikely for a main home mortgage.

Some would look at it for investment mortgage - but you need 30% deposit and you pay higher rates.

And it this "must get on the property ladder" that causes huge issues in future if prices drop.

Patience and 2-3 years of hard saving is the only real option.

ted1 · 18-05-2024 10:57am

sounds like a disaster waiting to happen

I assume that the 4 of them are single. What happens if 1 gets a partner and moves them in, or wants to move out, but a place with their partner.

Who gets the bigger room?

Musicrules · 18-05-2024 11:12am

https://www.boards.ie/discussion/comment/122152548#Comment_122152548

Sorry, this is the kind of thing I want to avoid. Whether it's a good idea or bad idea is irrelevant if it's not even possible.

Does anyone have knowledge of whether any lenders would be open to this? From looking it up, it seems like it was done pre the crash in the 2000's. Anyone have any recent experience?

Musicrules · 18-05-2024 11:15am

https://www.boards.ie/discussion/comment/122152522#Comment_122152522

Thanks for the reply. Yeah, patience could be key but there's always the thought that house prices might never go down but just stagnate or slowly increase.

PSFarrell · 18-05-2024 2:35pm

Seen a few cases of siblings buying together and then one finds a partner and can't buy the other out leading to them falling out.... Can't see such an arrangement with ftiends working unless they bought a property to subdivide it.

SupaCat95 · 19-05-2024 12:26am

This agreement is great on paper until you realise that there are humans involved. Then partners get moved in. You always get a tight wad who is slow with bills and eats everyone elses food. There is the guy who jas girls around every weekend. Then there is the exit strategy where everyone gets screwed.

If your daughter wants to keep her friends come up with a better strategy.

19-05-2024 12:53pm

https://www.boards.ie/discussion/2058352140/more-than-2-people-applying-for-a-mortgage

I don't know where your daughter is based, but she's better off managing her expectations in terms of where and what she buys rather than basically buying a house-share with 3 of her friends.

For example, the cheapest 2 bed house in my town is 250k. Expand that to a 20km radius and it drops by 20%.

If your daughter is looking to buy in Dublin then she needs to look elsewhere. Simple as.

JVince · 24-05-2024 8:33am

https://www.boards.ie/discussion/comment/122152590#Comment_122152590

no-one knows. In 2007 most said prices would go up and we all know what happened.

In real terms prices are still much lower than the 2007 peak.

Wages are increasing and interest rates are about to start falling a little - though in fairness to Irish banks (never thought I say that), they have not increased rates much and therefore rates will not fall dramatically. Probably safe to assume 3%-3.5% long them rates. In money terms €450 per €100,000 borrowed over 30 years.

Back in the early 90's my mortgage for a bog standard 3 bed semi in Ballinteer was just over £700 on a 90% mortgage (about €900) and a really good salary was £25,000 with high rate tax starting at under £15,000, the net salary was just over £17,000. That house sells at €600k today. If I took the same mortgage out at today's rates it would cost €2500 a month. The 25k salary is circa 100k today (65k after tax).

So in the early 90's about 55% of net salary was going to the mortgage (I rented two of the rooms out)

If I were to buy the same house today and had same job and same level, the mortgage payments would be 45% of the net salary.

So in a way, house ownership costs are similar to the early 90's

More than 2 people applying for a mortgage

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