# Looming Goverment bail out and Mortgage



## regvw (16 Nov 2010)

Hi All, 
I was just about to take out a morgage to build our home, self build. 
We currently have a morgage but was hoping to rent or sell our current home once the other house was built.

Now all I hear is that the IMF may have to bail us out as a country, with the ramafications of this on all of us am I mad to be thinking of taking on more debt. I dont work in the public sector tho and my job is as safe as it can be these days.

On the other hand I have my own site and I think that building rates will never be as low again.

Would areciate any advice

Reg


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## RMCF (17 Nov 2010)

To be honest I can't really see an IMF intervention affecting your situation too much. 

Its not as if the entire mortgage/housing market is going to collapse.

As you say, now is the cheapest time to find and pay builders. Getting finance from the bank may be your only worry, in case they make it harder and harder to qualify.


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## Igcuimhne81 (17 Nov 2010)

You are mad to be thinking of taking on more debt.

The property/mortgage market is collapsing as we speak. Who are you going to rent your first home to? There are thousands of empty houses/apartments around the country, the supply has far exceeded the demand. 
If unemployment rises any further (taking €6bn out of the economy should ensure that it will) it will put further downward pressure on rentals, in turn, putting further downward pressure on house prices.
If the IMF/ECB bail out the banks, finance will be available, but undoubtly with strict criteria and costly interest rates.


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## huskerdu (17 Nov 2010)

My advice is somewhere between the two above. 
Only you can assess the security of your job and if you genuinely think that you can take on a bigger mortage, having stress tested the amount carefully,  and it is the right thing for your family, then you should go ahead.

However,  you will have to convince a bank that your plan is financially sound.
You are asking for a second mortgage and it may not happen,

If the self build is your life long dream, you may have to sell up now and rent to fund it.


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## canicemcavoy (17 Nov 2010)

A lot of this depends on how big the two mortgages are, and if you could afford it if that rent you admit you "hope" for isn't forthcoming or is less than the current rate. The best thing here is to research and be completely objective about it.


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## regvw (17 Nov 2010)

Thsnks guys, Really apreciate your comments. I should really have added how I expect the morgage thing to work out. 

Spoke to the bank manager and he said i will qualify for a morgage for a quite a bit more than i want to borrow.

My objective outlook is that I will sell my current house for 30k less than what I currently owe on the morgage and considerably lower than I paid foer it 

Between building the new house on my own site and taking the loss on the other house I expect to be right back owing the same ammount in a morgage. 

As you can see i dont want to build a dream palace just something modest.


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## spreadsheet (17 Nov 2010)

I say go for it. Get the work out of the way and get on with the next chapter in your life.

You know what they say, "buy when everyone is selling" and vice versa.

That's kind of what you are doing.


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## Smart_Saver (18 Nov 2010)

It's a good time to get cheaper labour etc. However you have to take into consideration all the other current issues. I dont want to be negative but
e.g. - what is your personal wealth ? Can you repay that new loan (presuming you have it)  if it increases by 1 or 2 % in the coming years ? 
If you can fair enough - but what happens if you can't and need to sell your other house. I'm not going to predict where house prices will be tomorrow/next year but with all the property on the market the numbers seem to suggest that prices are still on the way down.
Best of luck with it - I hope you get it built. also not many people working in construction industry now so this job would help someone.


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