Advice for FTB worried about amount we are borrowing

Sunny said:
I bought my place on my own. If I get made redundant, I am screwed. Down to zero income!! Don't regret it though!
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Not saying you should Sunny but Mrs 2Pack and I stress tested on the basis that we could survive on the one income if necessary and pull our beloved offspringers namely , 3pack , 4pack and dear little 5pack out of their childcare .

We would be left with over €25k a year to live on after all outgoings like loans and mortgages were covered and thats on the lowest income.
 
2Pack said:
Not saying you should Sunny but Mrs 2Pack and I stress tested on the basis that we could survive on the one income if necessary and pull our beloved offspringers namely , 3pack , 4pack and dear little 5pack out of their childcare .

We would be left with over €25k a year to live on after all outgoings like loans and mortgages were covered and thats on the lowest income.
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:D

All you need is a 6pack now!!! You are right 2Pack on stress testing yourself that way. Especially with a family. I don't particulary like the prospect of being indebted if I got made redundant but luckily my sunny outlook keeps me going and my boss loves me!
 
Sunny said:
:D
I don't particulary like the prospect of being indebted but luckily my sunny outlook keeps me going!
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6 Pack would be a miracle after I got me snip. Lets say he's on the medical profession .

Also remember that childcare in Ireland is Shockingly expensive. A €300k house over 35 years costs €1200 a month mortgage but a child in creche in an urban area costs €600 so 2 of them cost €1200, same as the mortgage every month

Its cheaper out the country and with childminders but the little sweeties can damage your stress tested wallet if they show up at any stage and should be factored in when housebuying .
 
Sunny said:
I bought my place on my own. If I get made redundant, I am screwed. Down to zero income!! Don't regret it though!
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Of course you don't have any regrets. Because you haven't been made redundant and therefore you aren't down to zero income. I'm sure you'd be so fancy-free if you were told you'll get your two weeks statutory per year of service and €165 per week on the dole.

But then, you're not really comparing apples with apples there, are you?

Single, no regrets.

Couple with young family, struggling to clothe/feed their kids while the mortgage takes up an increasingly significant portion of their income. That's the risk.

I hope it never comes to pass and wish Mag2006 all the very best with their new home. They're savvy people, they've crunched the numbers, real-life stress tested their living costs. I'm sure they'll put ample insurance in place to protect themselves from such circumstances. But then that will be because they've recognised that there are risks and they'll do their best to nullify them.
 
Sunny said:
As CCOVICH said this probably isn't the thread for this discussion but I would be interested in reading what data is suggesting that neagative equity is a real serious risk at the moment. Maybe post it on the relevant thread. It is always a good debatable topic!:D
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Already plenty of it in the thread... you know the one!!!
 
conor_mc said:
Of course you don't have any regrets. Because you haven't been made redundant and therefore you aren't down to zero income. I'm sure you'd be so fancy-free if you were told you'll get your two weeks statutory per year of service and €165 per week on the dole.

But then, you're not really comparing apples with apples there, are you?

Single, no regrets.

Couple with young family, struggling to clothe/feed their kids while the mortgage takes up an increasingly significant portion of their income. That's the risk.
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Ever hear of single Dads Conor?? Don't presume you know me. I have stress tested myself just like the OP and happy with my situation in this good environment and if it turns. My OWN PERSONAL opinion is that there no point overly worrying about things you can't control like redundancy.
 
If you are forced to do all your shopping in Lidl, you are definitely overstretching yourself, especially on a 35 year mortgage.

I am guessing that you are borrowing 420K, and if your salaries are 46K and 30K, that is 6 times the main earner plus 4.8 times the second earners. Banks have become completely reckless in their lending from what I can see.
 
Your Salaries should increase 4% P/A which you should take into account too.
 
Right okay...as regards the silly comments about shopping in Lidl, firstly I do not have the snobby attitude towards it and sorry to rain on your parade but the quality of the majority of the Lidl groceries & cleaning things for the household is surprisingly excellent, so I would suggest that's it's pretty foolish to pay the extra in Tesco or Superquinn for the exact same product. Maybe if you went to Lidl and saw the amount of 06 BMW's etc in the carpark you would see that people are copping on to the rip offs in other stores. I buy all the nappies, wipes and fresh produce and bread, chicken & meat etc in Superquinn still but I buy everything else in Lidl as it does save money & it's good stuff. (their fig rolls are the best!):D

Sandymount, the bank are not being reckless with our application, perhaps you did not read my OP properly, we are both proffesionals and I get another 5% rise next month and hubbie gets his early next year so our incomes will increase annually. I think your attitude to shopping in Lidl is a bit silly really, you need to get out more & shop around!!. BTW we were not "forced" to shop there, gave it a go and it's great...you should try it!. There is one in Wicklow anyway so we wanted to see what it's like and we were impressed!.
Bearishbull- As for the "multinational" he works for leaving the country, I very much doubt it. It's a big international financial institution that is here for years so he is very safe. Again, you may need to get out more!!.

I actually think we have been very sensible with ensuring worst case scenario we can manage and we can. We are signing tomorrow at 4pm so wish us luck. It's going to be amazing, it's a house for life and we will always be able to pay the mortgage which is the important thing. We discussed it at length again last night.

Childcare is expensive and I suppose with our son starting school in September it's going down a fraction or two which helps and we are keeping them in the same creche anyway as we still go that way to get to work and they are happy. I've just changed my hours in order to drop him to school in the mornings and he will be collected by the creche's afterschool club along with his little pals. The baby will still be there fulltime though.

Thrifty...thanks...that's exactly how I've been feeling but once we have moved in we will be chuffed!.
We have taken out a 35 year repayment mortgage, not going interest only.

Again, thanks for the replies. And will some of you stop being snobby about Lidl, my mother nearly passed out when she saw a Lidl bag in my house so I took her shopping with me one day, she's so funny. She actually thought it was fine and picked up a few household things like loo-roll but she's still not converted. Ah sure after over 20 years using Superquinn and just her and Dad at home now, she's right!!. I just thought it was funny though....my friend used to live in Germany and it was the same attitude there for years (some people would not even stand outside the place :eek: ) and now it's the top supermarket overthere. (don't quote me on that but apparantly it's very popular)
 
Mag - all the best to you and your family. Good luck later today.

Just wanted to ask if you'd tried the Lidl nappies as I find them great for daytime use, especially at the rate creches go through the things.
 
Mag2006 said:
Sandymount, the bank are not being reckless with our application, perhaps you did not read my OP properly, we are both proffesionals
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You did not pass my stress test . Had the mortgage been c 300k you would have been fine .

You also never told us the interest rate you pay or the amount or whether its a repayment or interest only so we had to make intelligent assumptions :D ???
I think your attitude to shopping in Lidl is a bit silly really, you need to get out more & shop around!!.
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I agree totally, and don't forget Aldi either which is a tad better overall in MY opinion.

My other main reason for going into Lidl and Aldi (over the others) is that 3pack and 4pack do not see spiderman or superman and bob the feckin builder at eye level in every second aisle and hound us to buy some ****ty spaghetti hoops for 90c for the rest of the shop.

Its a pleasure to bring young kids into Lidl and Aldi because we are not ambushed by the shop all the time and left with "daddy I want xxxx" tantrums for the next hour .

Frankly I would never bring a child under 6 years old into ANY of the normal supermarkets. The only safe place in Tesco / Dunnes/ Superquinn / Supervalue if you have a 3 or 4 year old with you is the Booze section or the Dog Food Section which do not have kiddy brand ambushes a waiting for you .

How crazy is that.
 
On a more practical note what kind of salary increase(s) can you and your husband look forward to in the coming years? Are you both in careers where you can expect reasonable financial and other progress)?

Since you will need to pay €21,600 in mortgage payments every year are you both content to work for the next 35 years? Do you envisage a time when one of you will be able to cut down on work, and, if the answer to this is yes do you think that you would be able to cope financially on one salary? Otherwise you will both need to work full-time until the mortgage is paid off in full (in 2041!).

You have certainly taken refreshingly honest approach to your finances and according to the numbers that you have supplied us with you can afford to service this debt - but you would not have much (if any) leeway if your circumstances were to change.
 
Mag2006 said:
I use this site for reference alot and think it's fab but despite hearing about it in the press alot recently & subsequently reading the thread about the MARKET CRASHING. I am terrified about what we are about to do, my husband and I feel that if the housing market was to go belly up we would be one of the first to be destroyed by it, then if it goes the other way we are fine.
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A price crash would only impact you if you intend to sell or trade-up.

Also consider that price crashes are never even phenomena and that the impact on your house could be very small or even nil. If it occurs of course.

The only frustration would be if similar houses became available at a cheaper price than you paid for yours. Its all very speculative and who knows what will happen.

The only thing that worries me is that building of standrd 3 bed semis in the Dublin area is practically grinding to a halt. This could cause prices to rise faster due to shortages and panic buying.
 
2 pack...agree totally with you about Aldi & Lidl....you see Lidl is closer to us and I was in Aldi once and it's excellent but no baby seats on trollies(that was the one on the Belgard rd now) so a bit of no go for me!.
It's much easier to shop with the kids.
Have to run for a few mins, under pressure in work.
 
Sorry about that, getting back to you on our repayments. We are going 1 year fixed at 4% €1797.20 per month and that is over 35 years. We have decided not to go any longer with the fixed rate, this is a good rate that we got and very manageable plus we can still save some some money for the following year.

As regards cutting hours in work, we we are hoping that I can reduce to a 3 day week in the next year, especially with out little fella going to school and more time to spend with baby aswell, they would love it and so would I. We should be able to do it as I would only be paying for 3 days childcare then plus I would still be doing work from home anyway so I would not loose too much salary, fortunatley I have an really nice boss who has been fine about it when I discussed the possibilty with him..well I am the only person in the company that can do my particular job and both times I have been on maternity leave it's been a disaster so he wouldn't want me to leave & I'm happy here anyway.

We will fine, whethere we failed your stress test or not, obviously the bank were happy with us & know that the mortgage will be repaid without a hitch.

Frazzled...tried the Lidl nappies once, maybe she was a bit small at that stage but she was soaked in them but apparantly the toddler onces are very good so when I get to that stage going to give them a go. I'm a bit funny that way, I stick to huggies & pampers until a certain age and then on goes the sandpaper!!!!LOL!!!.
 
Mag2006, Please do not take offence and I do wish you and family all the best. If I was in your position I would not go ahead with the purchase. That is my honest opinion.

I do shop in Lidl myself, I also shop in Tesco, Superquinn, Farmers Markets, Spar etc
 
If you are forced to do all your shopping in Lidl, you are definitely overstretching yourself, especially on a 35 year mortgage.
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Lidl is excellent for continental style meats - i'd go there more often but the wait at the tills gets me.
Many people seem to have forgotten that wages tend to increase by approx 5% p.a.
If there is a property crash and multi-nationals go, we're all fecked, so that's not really a consideration.
If the OP is happy staying where she is for a considrable period, then there's no negative equity.
Childcare will not go on for ever, so that'll be a saving, which could be pumped into the mortgage thus reducing the term.
As for this making/not making financial sense, there is more to life than that, presumably the satisfaction gained from having one's own property within reasonable commuting distance is worth making this move for the OP. As we know, satisfaction is someting economists find very difficult to measure.
Personally, I see nothing wrong with people buying a house they're happy to stay in long term. They just have to adopt a philosophical attitude, come what may ie, it was a good decision for us at the time. The people who will be hit hardest if prices drop will be the investors who remortgaged/released equity on their own home to buy an apartment in carrick on shannon (or Dublin) recently, and the majority of FTB's who in their desperation to get on the property ladder have bought a 1 bedroom apartment with their 4 mates in Ongar.
The biggest downside is that if house prices drop, and the OP then feels that in fact they'd have prefrred to be in another location, there would be regrets. Since we can't tell, when/if that will happen, time to revert to the bird in the hand philosophy.
 
I agree with you Glenbhoy, no one can have a crystal ball. Well I agree with almost everything...the one about the children growing...yes they do but they never leave................

Good luck in your new home Mag2006, I don't know of any sensible person who was not scared witless on buying first house.
 
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