DarraghK1978
Registered User
- Messages
- 13
Hello, I’m hoping to get some general advice before speaking to my bank or a broker, please.
Current home has a value of c. €420,000 and the mortgage is €250,000. Remaining term is 14 years and we switched to Ulster Bank last year on a 7 year fixed rate of 2.99%. Our monthly mortgage is €1,900.
Our combined income for 2019 was €206,000 (married couple- PAYE, €100k + €106k between basic salary and bonuses- basic salaries come to €182k, bonuses aren’t guaranteed, but consistently paid) and it should be a bit higher for 2020. Jobs are secure and both have long tenure. We’re both 41, no children and no plans to change this.
Net income is about €8,600 and we’re both contributing well towards pensions.
Currently have €100k in savings and putting €5k/month into this.
We’re hoping to buy a second house which will be our long-term family home. Our ultimate hope is to keep house 1 and rent it out. It should probably rent out for about €2,200 minimum (similar houses around range from €2,200-2,600) but obviously we’ll be taking a loss given the mortgage is €1,900 (and will increase if we move to BTL mortgage). However, the house is in an excellent location and we’d like to have the option of using it to help nieces and nephews in future if they decide to study or work in this city- but that’s a long way off and the property would be mortgage-free at that stage.
We’re looking at houses priced in the region of €750k so would need to have savings of €150k and a new mortgage of €600k on top of our existing €250k. So total mortgage of €800k on earnings of €185k basic/€206k total (3.9 - 4.4 times salary depending on whether bonuses are taken in to account).
My questions are-
Given our incomes and the fact that we don’t have dependents, do you think any banks are likely to give us approval for more than 3.5 times our income?
Will bonuses be counted in income calculation?
Am I right in thinking that, to rent house 1, we’d need to change to a BTL mortgage which seems to be on the region of 5% interest rate, given LTV?
How do I calculate the cost to rent out house 1 to factor in taxes etc?
Given that we’ve recently switched to Ulster Bank, do you think there’s much scope for negotiating with them if we were to take on a second mortgage with them?
Is there anything I’ve missed?
Wouldn’t be 100% against selling house 1 but would prefer to do it at a later date once we’ve agreed on house 2. Also, given Covid impact on house prices is unknown, I’d prefer not to be facing into a sale in the next while.
Current home has a value of c. €420,000 and the mortgage is €250,000. Remaining term is 14 years and we switched to Ulster Bank last year on a 7 year fixed rate of 2.99%. Our monthly mortgage is €1,900.
Our combined income for 2019 was €206,000 (married couple- PAYE, €100k + €106k between basic salary and bonuses- basic salaries come to €182k, bonuses aren’t guaranteed, but consistently paid) and it should be a bit higher for 2020. Jobs are secure and both have long tenure. We’re both 41, no children and no plans to change this.
Net income is about €8,600 and we’re both contributing well towards pensions.
Currently have €100k in savings and putting €5k/month into this.
We’re hoping to buy a second house which will be our long-term family home. Our ultimate hope is to keep house 1 and rent it out. It should probably rent out for about €2,200 minimum (similar houses around range from €2,200-2,600) but obviously we’ll be taking a loss given the mortgage is €1,900 (and will increase if we move to BTL mortgage). However, the house is in an excellent location and we’d like to have the option of using it to help nieces and nephews in future if they decide to study or work in this city- but that’s a long way off and the property would be mortgage-free at that stage.
We’re looking at houses priced in the region of €750k so would need to have savings of €150k and a new mortgage of €600k on top of our existing €250k. So total mortgage of €800k on earnings of €185k basic/€206k total (3.9 - 4.4 times salary depending on whether bonuses are taken in to account).
My questions are-
Given our incomes and the fact that we don’t have dependents, do you think any banks are likely to give us approval for more than 3.5 times our income?
Will bonuses be counted in income calculation?
Am I right in thinking that, to rent house 1, we’d need to change to a BTL mortgage which seems to be on the region of 5% interest rate, given LTV?
How do I calculate the cost to rent out house 1 to factor in taxes etc?
Given that we’ve recently switched to Ulster Bank, do you think there’s much scope for negotiating with them if we were to take on a second mortgage with them?
Is there anything I’ve missed?
Wouldn’t be 100% against selling house 1 but would prefer to do it at a later date once we’ve agreed on house 2. Also, given Covid impact on house prices is unknown, I’d prefer not to be facing into a sale in the next while.