Advice on how much of a mortgage to get

Bronte said:
They are? Where?
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Legal, consulting, accounting, property mgmt etc....I think I recall a figure of a 2.6bn budget for NAMA's costs in these areas.
So a lot of folk that made money on the way up in the bubble, are now making it on the way down also. And I'd guess a lot of these live in the utopia that is SCD!
 

That's very funny Delboy, I like it. No wonder Noonan wants property prices to keep on rising. It's practially government policy.
 
I don't doubt that you or couples like you can afford to pay for these houses, clearly you can.
I'd just question the whole scenario.
The house you're buying is basically going to be a shack like all the homes built in that era, if it were to be built today to it's current condition it might cost 50k to throw up.
That means you're paying 0.5M for the site basically.

I just question whether the whole SCD thing is worth signing a large portion of ones life away for.

Before I would agree to this kind of indebtedness at your age I would take a huge step back and have a serious think about the big picture around why it is so important to live in this area.
Could you get work in other areas or do you have family ties that are drawing you in?
You have good incomes and a lot of options but paying down that kind of debt is going to take up a big chunk of your lives for what at the end of it all is going to be a very run of the mill home.
 
ebs_customer said:
I just question whether the whole SCD thing is worth signing a large portion of ones life away for.
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While I agree with you on the quality of some of the housing built over the last ten or fifteen or more years I can completely understand the SCD thing. If it's where your family are from, where you grew up, where a lot of your friends are living and so on, then why would you want to be elsewhere? I have a lot of friends who are now stuck in what they thought would be their "starter" homes in places like Clondalkin, Swords and Lucan and not one of them doesn't wish they were closer to "home".
 
ebs_customer said:
The house you're buying is basically going to be a shack like all the homes built in that era, if it were to be built today to it's current condition it might cost 50k to throw up.
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Why would it be a shack? Houses we're looking at were built in 1940s and 50s and are fine homes. Just need updating and insulating.
 

All our friends & family live in SCD, it's where i currently live and results in a 30min commute to work. And if work changes we can still get anywhere in dublin in 30-45mins.

I don't want to live west of the m50, i don't want to live on the northside and i don't want to live in North Wicklow. Hence SCD is the default and with literally thousands of houses i can't understand how we can't seem to comfortably afford to live there when so many others can.

Even at €150k joint income we can't afford a €0.5m home yet thousands upon thousands of others can. I just don't get it. Everyone seems to believe they won't come down but a 3 bed semi D in ballinteer for €450k just seems outrageous to me. Hoping it was a cash bubble but due to lack of supply and government interference i suspect they'll only go up....it's depressing.
 

Well if you go back to before the madness, the usual numbers used were like: twice your annual salary plus once your partner's salary and spend no more than about 25% of your monthly salary in repayments, oh and 25 years was considered a long mortgage. As far as I know, these are still the numbers used today by German, French and Austrian banks for one thing.

I would think that going beyond those sort of figures could have a negative impact on your other plans and dreams if things should go wrong... We're coming out of a recession right now, but no one can tell how far off the next one is nor how well this recovery pan out.
 

But you have no idea how those people live, you don't get to see their bank accounts nor sit at the breakfast table when they sort out their finances... But if we are to believe what we read, people have over stretched themselves with mortgages they are now struggling to meet.

Assuming you can get a mortgage, you too could have that live style, if that is what you are willing to risk in order in order to achieve your dream.
 

Out of curiousity when exactly was that? The madness ended summer 2006 but when did it start....... 1998?? 16 years ago??
 
I saw a post on the pin linking to this and thought it was interesting but a lot of the replies to date are a bit one sided.

As a couple myself and my wife bought a house for just under 500,000 (or "half a million" which has extra shock factor) in Rathfarnham 18 months ago. We sold a house nearby and after paying off the mortgage had €120,000 in cash. With some savings we took out a mortgage for €340,000 over 25 years, fixed for first ten at 5.05%. The monthly repayments are just under €2000. Our joint income is similar to your own but higher percentage on my side. I don't see the big issue paying €2000 a month in a mortgage. Our old mortgage was €1000 but we felt obliged to save all the time as we knew we wanted to move one day. Now that I feel we no longer have an obligation to save or hide personal loans/gambling from the bank that we have more financial freedom. If the mortgage is paid and you still have €5000 a month to live on whats the big deal, that's €2000 more than we need to live on a month. My wife is currently on unpaid leave with our first child but we are not on the breadline yet and childcare is for 5 years not for life.

In Wexford or Mayo a joint income of €150,000 and buying a house for €500,000 might seem outrageous but thousands of people in Dublin have this type of income, working in financial services, IT, medicine, education, semi-states etc. You don't have to be a lotto winner or have some inheritance.

In my opinion for a joint income in that region I can't see how a mortgage for €2000 is not affordable.
 
I don't think the income multiples are a huge problem or the monthly payments, I'm surprised at the low level of deposit, I think that may be the difference between you and other high income couples buying half a million euro houses.

About half of my friends in the same age and income bracket are stuck in negative equity but the other half have positive equity or approx break even but have built up a lot of savings so they would be looking at lower LTV purchases
 

Mine was valued at €195k only six months ago. It didn't even cost €350k in 2005, not to mind €500k.

Dublin106 said:
Quick question - if a finance couple on 142k pa can't afford a 3 bed semi D in south dubin for 0.5m who can? who is buying all these houses? in the likes of ballinteer, rathfarnham, dundrum etc?
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People that already have houses. You're coming from a position where your deposit is less than 10% of your supposed house price, and you've no existing property. Most of these people will be selling their current houses, probably worth €200k or €300k. They've got a significant head start on you. Probably half the salary but twice the buying potential. Note, this is my opinion; it's not advice.
 
ebs_customer said:
The house you're buying is basically going to be a shack like all the homes built in that era, if it were to be built today to it's current condition it might cost 50k to throw up.
.
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I'll hire you if you can build a house for 50K ! And I'd most certainly buy a decent, even if run down, well built older Dublin house instead of most of the new ones. Particularly if it was in a great location such as SCD.

Personally I don't actually see the attraction of SCD, but I do know that is the best location, in general, when one is talking about location location location and keeping values. I'd probably go for somewhere like Malahide on the North side myself. But I've no intention of living ever in Dublin. But it's the place to be for jobs.
 
Belton said:
Mine was valued at €195k only six months ago. It didn't even cost €350k in 2005, not to mind €500k.


.
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Are you saying that the house he's planning on buying was worth 350K at most at peak of the boom? And that currently they are worth 195K?

Dublin106, what would the proposed house fetch in rent?
 
Bronte said:
Are you saying that the house he's planning on buying was worth 350K at most at peak of the boom? And that currently they are worth 195K?
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No, I'm saying that close to the peak of the boom I bought a 3 bedroom house in South County Dublin for less than €350k. Six months ago it was valued at €195k.
What I'm saying is there are plenty of houses in, say, Dublin 16, for between €200k and €450. I don't see where this average of halfamil is coming from, tbh.
 
Whether we realize it or not, everyone has a choice about what we spend our money on.

OP, I'm sure your monthly expenditure of 3.5k+ seems normal to you, but my family's (similar age, 1 child) monthly expenses come in at around a third of that figure.

This is the reason you are struggling to afford the house you want in the current climate. Either cut spending and buy the house, or keep spending and buy a house in a cheaper location.
 
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