# Should we borrow €460k on an income of €84k ?



## burger1979

Age: *28*
   Spouse’s/Partner's age: *28*

   Annual gross income from employment or profession: *€44,505.00*
   Annual gross income of spouse: *€40,000.00*

   Type of employment: e.g. Civil Servant,  self-employed: *I am a quantity surveyor/partner is a structural engineer.*

In general are you spending more than you earn or are you saving? *Saving*

_Thinking of buying a €500k home with a €460k mortgage_
   Rough estimate of value of home *€500,000.00*
   Amount outstanding on your mortgage: *€460,000.00*
*What interest rate    are you paying? 5.6%*

   Other borrowings – car loans/personal loans etc: *No.*

   Do you pay off your full credit card balance each month? *Yes.*
   If not, what is the balance on your credit card? 

   Savings and investments: CU €3000.00 Me, CU €20,000.00 Her, Joint Savings account €15,000.00

   Do you have a pension scheme? *No.*

   Do you own any investment or other property? *No.*

   Ages of children: *None.*

   Life insurance: *None.*


*What specific question do you have or what issues are of concern to you?

I am looking to buy ahouse with my finace and we have seen a house over the weekend that we are going to make an offer on. the asking price of the house is €500K. I want to know what people would make/think of our finances if we were to get a mortgage of €460K at a rate of 5.6%. This, according to Karl's calc, give us a repayment per month of €2500.99 (loan startedin June 2008 and runs for 35yrs). I dont know if the calc takes into account TRS. If not i work out that our repayments would drop to €2166.67 after TRS is deducted (i could be wrong on this, i got the info off revenue.ie). Our net income per month at the moment is €5625.00. If we were to pay the full €2500.00 p/m month on the mortgage that would mean we are paying 44% into our mortgage which i think is a bit high, however at €2166.67 p/m that is 38.5% of the net income which is not too bad and really manageable.

So my questions would be:

1. does Karls mortgage calc take into account TRS?
2. if were to pay €2500.99 p/m do people think we would be stretching ourselves too much?
3. when i entered our incomes in to Karl Grabes tax calc for married people our net income per month didnt go up i thought it would increase when we get married?

I appreciate that this info/situation is hypothetical and might not happen but i would really appreciate any suggestions people might have.

thanks in advance for the replies.

burger1979.
*


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## Brendan Burgess

*Re: New Mortgage Situation - Hypothetical*

1. does Karls mortgage calc take into account TRS?
*No. It's a generic calculator that covers all countries and not just Ireland.*

3. when i entered our incomes in to Karl Grabes tax calc for married people our net income per month didnt go up i thought it would increase when we get married? 
*No, your tax won't be reduced when you get married.  If one spouse has no income or a low income, then the other spouse can benefit from their tax credits and tax bands.  *

2. if were to pay €2500.99 p/m do people think we would be stretching ourselves too much?

*Probably. It's cheaper to rent than to pay a mortgage.  Why not save for a bit longer and build up a bit more of a deposit? If house prices fall, the same house will be cheaper later. If house prices rise, it will cost you more to get on the housing ladder, but you will probably have higher incomes and higher savings.

Brendan
*


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## twofor1

It’s not one of your questions but even on your LTV of 92% can you not get a rate better than 5.6%. A rate of 5% would save you nearly €179 monthly, that’s a lot of money over 35 years.


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## Lulu123

You should also take into account that you may have children in the future, I know at 28 that may not be top of the agenda at the moment,  but long term if you are paying nearly half of your joint income out per month for a mortgage and then kiddies come along you may need to either pay fulltime childcare fees (can be up to 1000pm) or one of you may need to give up work for a while.

You probably should take this into consideration before committing to such a large mortgage.  Personally I would continue saving and rent to see how the market plays out.


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## television

Also consider the fact that your income will continue to rise. What kind of offer on the house are you going to offer? I would go as low as I possibly could if your dead set on buying. Although like LUlu123 I would also consider holding off for a while yet  and monitor the market a little more.


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## laura333

Its not just the mortgage you need to consider. As Lulu pointed out you may have future draws on your income that you have no factored in yet. E.G Self-Employed, have you considered any income protection, pension etc. Sounds like a long way off now I know but extra payments like this could put you under pressure.


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## burger1979

Twofor1: that interest rate is something that i came up with. i was aiming for the high end to see what the repayments would be and i know that i can get better. i am going to talk with my broker tomorrow and see what rates/quotes he can get me on that amount.

lulu123/television/laura333: yeah kiddies are going to be coming along in the future. i am working out at the mo how much expenditure we are going to have after mortgage repayments. we have not other major commitments at the moment other than health insurance roughly €50pm each. we are currently living in both of our respective parents houses whilst getting the deposit together (38K at the moment so not bad) but we are getting married in september and want to get the house before the wedding. our hand is kinda being forced a bit as when we went to see the house on saturday the agent also had 2 investors looking to buy the property also. we overheard the investors offering €480K for it and the agent saying that that would be rejected. personally i would offer a bit less maybe 465-475 at the start and see what happens. if we submit an offer the agent said that he would keep us in the loop if another offer is bid. 

as for other expenditure of course that will always be there, bills/pension/life insurance/car/kids...etc etc.

Anyways thanks for the advice and if anyone else wants to throw their 2 cents in please do so.

burger1979


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## z109

There are lots of houses out there, don't get hung up on a particular one. If you were buying a ford fiesta, would you only buy from a particular salesman a particular car with a specific registration number?

Rent in the area you think you want to buy in before you buy. This will give you an idea of whether you really want to live there or not. Remember, you should be looking at 5-7 years living in a particular property when you buy (otherwise you are too exposed to needing a rising property market to cover moving costs/stamp duty etc.).


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## Superman

Anyone else conscious of the fact that both the OP and the OP's partner both have jobs related to the construction industry?

If things do get bad, then being in an industry which will be first against the wall might not be too good...


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## Brendan Burgess

Hi Superman

Well spotted. This is a very relevant factor which would swing it for me against buying a house at this stage.

Brendan


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## burger1979

Hi Superman,

yeah both jobs in the construction industry, but both are 'office' jobs in construction. both companies that we work with are quite big and even with the downturn in the industry the 2 of us have not been affected nor have people around us in similar jobs/positions. we feel that both our jobs are quite secure in the long term future. we had thought about it when applying for pre mortgage approval.

yoganmahew: we are not trying to get hung up on one particular house, we have our eye on a few other houses as well. point about the fiesta well put. as for renting i live close to the area at the mo (raheny) so i know it reasonably well and we are buying to live in a house for over 10 years.

thanks for the replies again

burger1979.


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## deedee80

Hi Burger, have you been approved for the 460k mortgage?  This seems to me very high considering your salary.  You presently have no car loan, when you move out of home will either/both of you be needing a car.  This can be a big strain on resources.  Myself and my partner have joint earnings of circa 100k.  Our mortgage is only 368k but we have very little to play around with at the end of the month.  Our mortgage costs us 1500 after tax relief and we have another loan worth 350 pm. Car loan is 500pm which I know is steep.  Petrol and other car expenses also add up.  Bills and food ususally comes to around 400 per month.  Since we moved into our house we have spent a lot of our wages doing it up but even if your house needs no work doing to it, there will always be something that crops up or needs replacing.  We like to have a social life, ie the odd night out or weekend away, trips to the cinema and are also saving for our wedding.  As you seem to be in a similar position to myself I just wanted to point these things out so that you are not overstretching yourself.


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## burger1979

Hi Deedee,

yeah we have approval of up to 560K from a broker. now we would go no where near that amount in fact i was shoked when the broker gave me the figures,but i think he was trying to wet my palette so to speak. i was also told that the lowest maximum we were offered through the broker was 450K. i currently have no car, finace does but owes no money on it. we have no other loans on our finances at present. the wedding is being taken care of already. i know what you mean about hidden extras in terms of spending and we have done out what are costs would be if were to pay the full amount on the house. interestingly out of curiosity i rang the broker this morning and asked about getting a 3yr fixed on principal of 460K and she said 4.79 with ICS which gives €2258pm with no relief taken into account!!! (again could be to wet the palette so to speak) going to check that out now on karls calc and ics website.

thanks for the reply.


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## deedee80

Oh my goodness 560k seems like an awful lot.  Well I guess one thing I would advise is to go for the best house you can get for your money.  It would appear that stamp duty is not an issue for you and so you want to buy a house you will see yourself in for a long time, not having to trade up in a few years and forking out a fortune on stamp.  If you are both secure in your jobs (which I note you are), you can currently afford the 460k and have been given approval for this then I would go for it.  It may work out expensive to start with but will be worth it if this is your long term house and as your wages go up repayments will only get easier.  Best of luck, this is a very exciting time for you!


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## burger1979

hi Deedee,

yeah we are first time buyers and this will be the house for a very long time hopefully. the 460K would be worst case scenario at the moment also but sure we'll see. the heart is kinda ruling the head at the minute and thats not a good thing. sure it might not even get off the ground!!!!

thanks again

burger1979


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## oilpainting

hi i live in similar area and just wanted to mention that you would qualify for the affordable housing scheme as a couple you can earn up to 100.000 and you are ftbers....you would have a good chance of getting a house as a couple with your incomes and your morgage would be alot less than the one you are suggesting,if you have reasons for not wanting to persue this area please disguard,but i dont think people realise that the affordable housing scheme is for people in your exact situation so you wont be crippled with such high morgages... i know loads of friends who got great properties in robs wall malahide and they have managed to have families and sustain any money pressures giving them a chance to have a secure life...they bought their house 5 years ago for 300.000,and it is now worth 600,000........... they cant sell for 20 years but they dont want to and they have a relatively low morgage and a property worth double what they paid for in 20 years time.... worth a mention i thought


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## davidoco

burger1979 said:


> our hand is kinda being forced a bit as when we went to see the house on saturday the agent also had 2 investors looking to buy the property also. we overheard the investors offering €480K for it and the agent saying that that would be rejected.


 
There is something wrong there.  Have a look on daft and see what sort of rent the house would generate.  If it's less than approx €2500 per month then what in the name of all that is good about being a landlord is an investor looking at it for.


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## television

excellent point Davidoco. It sounds very fishy to me. If I had half a million to invest would not even think about investing in property now.


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## bamboozle

5.6% is too high a rate, there are much more attractive rates out there, you’re not taking into account Mortgage Int Relief which given the size of your mortgage you would qualify for the full amount of 333.33,
perhaps you could consider a bank that is willing to go Interest only for the 1st year to give you a chance to get on your feet.


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## Howitzer

Brendan said:


> 2. if were to pay €2500.99 p/m do people think we would be stretching ourselves too much?
> 
> *Probably. It's cheaper to rent than to pay a mortgage. Why not save for a bit longer and build up a bit more of a deposit? If house prices fall, the same house will be cheaper later. If house prices rise, it will cost you more to get on the housing ladder, but you will probably have higher incomes and higher savings.*
> 
> *Brendan*


 


bamboozle said:


> perhaps you could consider a bank that is willing to go Interest only for the 1st year to give you a chance to get on your feet.


Brendan, you used to advise young people to go interest only in the early years of their mortgage and increase their payments later on when their incomes had increased. Are you rowing back from that position given that it only made sense in a rising market or just in this particular case given the nature of the OPs employment type? 

Interest only in this case would be E2146 per month before Mortgage Interest Relief, below the OP's stated comfort level.

28 is young in mortgage taking terms and certainly below the average.


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## z106

I'm very surprised that you can get a mortgage of 560k on a total salary of 85k.

Are you sure this is correct burger?

THat is nearly 7 times what you are on.

That seems mad. (I do acknowledge you are not going to take the full 560k - I'm just shocked it was offered in teh first place)


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## burger1979

qwertyuiop: yeah 560K i was told over the phone, nothing in writing though. and yeah i was shocked too. we were even offered more if we went fixed for 5 years with one bank!!!! crazy i think.

davidoco: yeah its worth looking into that davidoco thanks for the info. i have done a quick check on daft and a 4 bed is looking for 1700 p/m and its only about a 5min walk from the house for sale!!!

bamboozle: i purposely applied a high rate just to see where it left us at the end of mortgage payments and house bills. i know that there are lower rates but for the purpose of the exercise i applied a high rate. its hypothetical at the moment and i would hope that if i bought the house that i would not pay full price. i was talking to a fwe people i work with and they have mentioned that they have found that some agents that 'plant' people in a viewing to up the price. dont know if its true or not but just thought it was worth mentioning.

again thanks for all the replies.

burger1979


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## Brendan Burgess

Howitzer said:



> Brendan, you used to advise young people to go interest only in the early years of their mortgage and increase their payments later on when their incomes had increased. Are you rowing back from that position given that it only made sense in a rising market or just in this particular case given the nature of the OPs employment type?


I have looked through my posts in this thread and I have not referred to interest-only? 

It is bamboozle who is recommending it in this case, not I.

It is an interesting topic, so I have opened a new thread on it here


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## burger1979

Done a scan of daft.ir last night and the most i can see asking to rent in baldoyle is 1700-1800 p/m for a 4 bed. but also thinking that doesnt mean that they have to mortgage the whole house to pay for it. the people who offered 480K might have money stored elsewhere and use that to fund the purchase of the house.


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## paddyodoors

Hi Burger 

You don't only look at the mortgage portion of an investment to work out the return, there is still lost opportunity of any funds used to purchase the house.

i.e. Why purchase an investment property earning a return of around 4% when you can get 5%+ sitting in a bank account.

Paddy


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## davidoco

paddyodoors said:


> Hi Burger
> 
> You don't only look at the mortgage portion of an investment to work out the return, there is still lost opportunity of any funds used to purchase the house.
> 
> i.e. Why purchase an investment property earning a return of around 4% when you can get 5%+ sitting in a bank account.
> 
> Paddy


 
I second that.  Say investor has €150,000 in cash.  Mortgage of 350k interest only covered by rent.  Equity in house would have to rise or they are losing money.  Would be better off putting that 150K on deposit.

Investor would pay €20,000 in stamp duty so total cost €500,000.


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## john m

My wife and myself have recently taken on a mortgage of 330k on a 475k house, our combined income is 90-95K/year, have no other loans (no car loans, credit card borrowings etc). I would not like to have put more into the mortgage because after all expenses and bills there is not a huge amount left for savings. My wife will soon be out on maternity leave and things will be tighter from then on, reduced income while out and childcare after that. Before you borrow just look at your situation closely, will your income fall if you are starting a family? What will childcare cost? Can you still manage all these on your combined income (reduced and full)? If its a family home you are buying all the talk of rental income means nothing, you wont be an investor in the rental market you will be a home owner, huge distinction.


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## davidoco

john m said:


> ..... If its a family home you are buying all the talk of rental income means nothing, you wont be an investor in the rental market you will be a home owner, huge distinction.


 
The topic of rent came up because an investor had seemingly put in a bid on the property that OP was interested in, and suspicions were raised for the OP because it seemed odd for an investor to be bidding on this house.


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## burger1979

If it was possible would i be able to list out my projected income/expenditure on the said mortgage - moderator?

i dont mind listing out the figs that i have worked out for further scrutiney by others.


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## outspann

Burger,

One thing that you may want to consider - and in some ways it is nothing to do with finances - is the buzz that can be got from buying your first house. I just noticed that in one reply you mentioned that you REALLY wanted this house....

It's often very easy to become convinced that "this is the only house for me", and head off down the road of believing that if you don't get this one, then every other house that you look at for the rest of your life will be a disappointment. People (myself included) can spend far too much money because they believe they are paying not just for a house, but also a "home". The crazy prices are explained away by a feeling that you're not just buying bricks and mortar, but also intangibles like happiness, childrens birthday parties, growing old together, etc etc.

Remember - you're not buying happiness. No matter where you buy or what you spend, the "home" bit will follow along in due course. Try as dispassionately as possible to figure out what the bricks and mortar are worth to you, and forget about the rest. I know it's a cliche, but there really is other houses out there....

If in doubt, remember the Garth Brooks song about property investment: "sometimes I thank God for unanswered prayers". And good luck.


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## television

Well said Outspann i.e. in relation to excessive sentimentality and that thet there are other houses out there. However what not just offer 420000 for that house and see what happens what you got to loose Burger.


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## burger1979

outspan: the heart is flutter with this one alright. i know that there are more houses out there and although we really like it we are prepared to walk away from it if its not right financially or otherwise. we have aeye on a few other houses as well. i shall now leave the office with gareth brooks in my head too.....thanks

television: do you not think 420K is too low and will be laughed at? the house has been on since christmas.

thanks for the replies again.

burger1979.


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## BROOKING

deedee80, quick question, your mortgage is €368k and your repayments are €1,500 net of interest relief, did you get a very good interest rate as your repayment is  much lower than I am paying for more or less the same mortgage, perhaps the mortgage term is longer, mine is 20 years, thanks


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## television

Yea probably but I would wait for another month. If its still on the market go in with a much lower bid. This is not a rising market so its not as if your going to pay more in a month.


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## paddyodoors

television said:


> Yea probably but I would wait for another month. If its still on the market go in with a much lower bid. This is not a rising market so its not as if your going to pay more in a month.


 
Be careful here - if it is a good house in a desirable location, waiting another month may not increase the price through the market rising - but does allow more time for new entrants to the market - i.e. another interested party may appear and could bid the price up.

its best to get in now with a low bid and hope they owners are keen to sell. Definetely take no heed of the offer "overheard" look at other properties in the area and get the average price - then offer lower.

I'd go in with an offer now to show you are interested but be realistic - state to the agent you are prepared to pay x but are also looking at other properties - so will move on if they are not prepared to accept your price.

10% below the asking/average mkt price gives you good flexibility - but don't then increase your offer too quick or by too much or you will quickly be reeled in by the professional sales agent

Paddy


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## television

Good point paddyodoors. Makes a lot of sence.


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## burger1979

paddyodoors good point alright i will be looking at other houses in the area and see what they are going for i was thinking of offering 450K. we have done some sums again and think we can stretch to 470K max(mortgage would then be 430K) at that point it will be no more but i am prepared to walk away before then if necessary.


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## deedee80

> BROOKING*Re: Should we borrow €460k on an income of €84k ?*
> deedee80, quick question, your mortgage is €368k and your repayments are €1,500 net of interest relief, did you get a very good interest rate as your repayment is much lower than I am paying for more or less the same mortgage, perhaps the mortgage term is longer, mine is 20 years, thanks


 
Hi Brooking, 

yes our mortgage is over 35 years so that is why its cheaper, as we are both in our mid twenties we thought we might aswell stretch it out!


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## sadie

Also if you are going to bid you should seriously think about getting someone else to put the offers to the estate agent. From experience, if you are emotionally involved in a house, it is REALLY easy to get sucked in and up your offer. Just think getting it for 20k less could mean a new car for someone. Get a calm unexcitable friend to do it for you as in making a short simple phone call to the agent without going into discussions and get the to come back to you with the answers.


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## television

I cant help thinking that who ever is selling that house would so love to get 470000 and would happily take 430-440 and run. But what do I know.


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## burger1979

i was thinking of something last night. if 460K is too much to borrow on a salary of 84K, what do people think should be the maximum we should borrow? i realise that its dependant on a few things like what interest rate/mortgage package is offered etc. but generally anyone want to throw me a few figures????

burger1979


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## askalot

I got some great advise a few years ago to think carefully about getting a mortgage where the monthly repayments were more than a third of my take home pay. 

Recent years of low interest rates may make it seem as if that advise is now too stringent but with the future movement of ECB rates a mystery, though with Eurozone inflation on the up and up further increases can not be ruled out, I wouldn't stray too far from that benchmark if you want to have a life as well as having a home!


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## deedee80

> askalot*Re: Should we borrow €460k on an income of €84k ?*
> I got some great advise a few years ago to think carefully about getting a mortgage where the monthly repayments were more than a third of my take home pay.


 
I followed that advise as well askalot. 

Burger, I would perhaps work out what 30% of your joint take home salary is each month and this is the very max I would want to be spending on mortgage repayments.


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## Lulu123

I would agree with the previous 2 posters. 30% should allow for any unforeseen events (like babies, one of you losing a job etc) Its best not to leave yourself open to 35 years of struggling to pay back a mortgage. 
Also would you consider buying a house that needed a bit of work doing to it or had room to extend, that way you will be able to increase value to it in the future and will allow you to stay it in for longer.


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## burger1979

i was thinking that 33-35% max should be spent on the mortgage repayments. this should leave us with enough money for bills and savings and also some expenditure money.


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## Mr DT

I'd say 30-35% of you net income is about right. BUT remember if you are doing this with a 30-40 year loan you are paying *100's of thousands* more in interest to the bank than you would if you could do it over 20-25 years.Keep the lenght of the loan as short as possible.

HAve you looked at the senario of what would happen if you had to live of one income? could you? You have good savings to use in a critical situation at the momment but will you be using this saftely net when buying the house? Some say you should have 6 months salary at least stuck away just in case but this is not practical for most.

Rememeber lifestyle and quality of life could be important factors, depend on your priorities in life. We aren't around for that long so is a house important to you or do you want to eat out, have 2-3 holidays a year, have children with out having to worry about money etc.

There is a balance some where, depending on what you want out of life. I am lucky enough to earn a good 6 figure salary but have choosen to live in a normal 3 bed end of terrace as I didn't want a mortage over more than 20 years. 

Friends have more debt, bigger houses and more money worries. As a family with 2 kids we have a great great quality of life which I would not change! 

It personal preference but worth thinking about.


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## Mr DT

whoops pressed the button twice so i've deleted by duplicate post!! Sorry


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## burger1979

Just as an update we have decided to buy a house in navan. the mortgage will be equal to 30% of our net income, roughly. thanks to everyone for their input/comments. our bid for the house was accepted this morning and we are going to proceed with the sale. 
now if anyone wants to contribute to the burger mortgage fund then please do so!!!!!


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## burger1979

oh yeah sorry the bid was 425K and was accepted.


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## Mr DT

Congratulations! You sound like you have done this with out financially stretching yourselves. Good luck in your new home.


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## funkylady

you must be mad getting a morgage that size ,how about buying somethin
more affordable to get you on the property ladder then upgrading later ,you will be living beyond your means ,when a family arrives circumstances change,you really need to think more carefully,


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## bamboozle

Funkylady, I disagree, I think now’s the time to push the boat out (within reason) there’s little sense now to be buying a stop gap of a house and forking out thousands on stamp duty, solicitors & furnishings & then do it all again a few years down the road when a larger house becomes more affordable.


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## burger1979

Funkylady: our mortgage will only be 391K rather than the 460K mentioned in the heading of the thread. we eventually decided that 460K or close too was too much and would be stretching ourselves should our circumstances change.


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## deedee80

Congratulations Burger, sounds like you made a good move.  I'd say you got a great house in Navan for that money.

Funkylady, I would not agree with your post.  FTB's are now being advised to buy their second house first (so to speak) as it is not just about getting on the property ladder anymore. If a ftb can save and buy a better house now (even if this means stretching themselves a bit at the start), chances are they will get it for a good price, spend many years there and avoid having to pay hefty stamp in a couple of years along with all the other expenses of moving.


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## Pope John 11

burger1979 said:


> oh yeah sorry the bid was 425K and was accepted.


 
Congratulations by the way.
Hope you have worked out your commuting times etc from Navan to the City.From previous threads there seems to be mixed views.

M3 on the way!

& as part of transport 2*1*21....a rail link on the way....
http://www.meathontrack.com/


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## burger1979

Pope John 11: yeah i lived in navan for 3 weeks and done the commute and in the morning it was grand  i was up and out the door by 6.15am which is only 15 mins before i normally leave. then on the way back to navan it took me about 1.5 hours on average. now that might seem like alot and it is. but since i have been doing the journey back to raheny by luas and dart it has been taking me the roughly the same amount of time so its not really much of a difference in the commute time. also my finace has given me some handy tips for the back roads to get back to navan quicker (around dunshaughlin is one).

as for the rail link i will believe it when i see it 
gonna miss the train to be honest i have had it easy living in raheny and getting the dart in and out of town, and the relative ease of it all.


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## moneygrower

God that's a big jump in location. Are you not worried you might see a house for sale in Raheny for 425k in a year or two? I'm presuming you have family in Raheny and that is a major part of your decision. When you have kids you will realise how great it is to be close to family, esp. for babysitting! 
Also - what if you miss the sea?!
The two investors (stage) whispering high offers that will be automatically rejected is the fishy-est thing I've heard in a long time and I'm not the paranoid I hate estate agents type. Who the hell loudly makes an offer to the estate agent in the house with other people around? And TWO investors in this market?? Ring around a few E.A.'s and ask them how likely is that.


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## burger1979

moneygrower: yeah big jump in location for me but not for my finace as she is from there. a house for sale in raheny for 425 would be dificult especially for the type of house that we wanted and one that would suit our future needs.

as for the sea well dollymount is nothing to get excited about these days

and the investors, well thats another thing altogether, that EA got himself in a complete fuddle about that house and couldnt answer the q's we asked about it etc. etc. so we put a bid in, it was rejected by him cos he said that there was a better offer on it so we left it at that.


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## moneygrower

Well you sound happy with your decision, good luck and congratulations with your new home


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## mtk

came across this old thread , not sure how, feel sorry for the buyer/borrower here but i guess none of us knows the future ( then or now)


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## Brendan Burgess

Hi mtk

Yes, it's an interesting thread. 

Discussion forums will be a great resource for historians. 

burger made an informed decision based on all the factors and knowing all the risks 


Very high borrowings
both working in the contstruction industry
Uncertainty about house prices
He was originally planning to borrow €460k but ended up borrowing €391k. So based on combined salaries of €84k, he reduced his mortgage to salary level to 4.6 times from 5.5 times.  There seemed to be a general consensus that having repayments in excess of 35% of the net salary was not a good idea.

One poster said he should not hold back, which is fully understandable giving the very high stamp duty making trading up  a very expensive process. 


This thread shows that burger considered all the information and advice given and reduced his borrowings accordingly.   He got approval over the phone for a higher amount from a broker. I wonder did he finally get that from a bank? 

The initial views in the thread argued against him buying now as both were employed in the construction industry.

The Key Point, is that the future is uncertain. We can't forecast the future, but we can identify risks.


Brendan


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## mtk

Absolutley correct Brendan people have to take resposibility for their actions, i guess i just had an "empathy" attack this monring


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## burger1979

MTK/Brendan,

I think you might be right on historians looking on forums for resources. I am surprised this thread popped up. 

To give you an update we are 5 years in the house. And the house that I discussed in this thread the sale fell through. The vendors pulled out at the last minute. But we did manage to buy in the same estate and the same size house for less money, €410K was the agreed price. This means that our mortgage was €377K. Our salaries have increased since the original thread started and of the net income from both mine and my wife salary, our mortgage repayment is 30% of our take home pay at the moment. Both of our salaries have increased since we took out our mortgage and we are able to live and save at the  same time as keeping the roof over our heads. Jobs wise we are both secure.

If you want more updates then ask questions away and I will reply.

Regards,
Burger


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## Brendan Burgess

Hi burger

Thank you very much for the update. 

It's one of the points I have made on a few occasions. Commentators talk about people who bought at the top of the market with a 100% SVR mortgage who have since lost their jobs.  In fact, this is a very small minority of the people. 

We have around 13.5% unemployment and I would guess that is even lower among mortgage holders.  50% of home loans are on trackers, and their repayments are at an all-time low. 

When I saw that you were both in construction, I feared for the worst. 

Glad it's worked out fine.


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## mtk

Brendan Burgess said:


> Hi burger
> 
> Thank you very much for the update.
> 
> It's one of the points I have made on a few occasions. Commentators talk about people who bought at the top of the market with a 100% SVR mortgage who have since lost their jobs. In fact, this is a very small minority of the people.
> 
> We have around 13.5% unemployment and I would guess that is even lower among mortgage holders. 50% of home loans are on trackers, and their repayments are at an all-time low.
> 
> When I saw that you were both in construction, I feared for the worst.
> 
> Glad it's worked out fine.


 
Glad it worked out too.
The media have a lot to answer for re mis-information /sensationalisation
They talk like debt forgiveness is not a zero sum game!


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