Would like to get an opinion on the situation which I was presented with this evening by AIB. We are hoping to sell our current home which is in negative equity and embark on a self build project - or at least that was the plan !!
Our current situation is as follows:
Joint application
Current home value - 135k
Amount mortgage outstanding - 170k on Tracker
Self build is a five bed detached - 3300 sq ft (approx.)
Value (and this is where the challenges start) - valued at approx. 350k
Build cost - approx. 380k (so build cost is more than house will be valued on completion due to area and current climate)
Mortgage required - 92% - so approx. 322k
Term of Mortgage - 25 years
Amount of savings - savings of 95k
Age of Applicants. - late 30's & early 40's
Employment situation - Private sector - both full time for number years
Have you any children - 1 child
Car loans - 1200 pm
Cr. Card situation. - paid in full on monthly
Salary's - 140k and 56k
No other loans etc
The issue we have is that we want to use the Tracker Retention Product offered by AIB for the self-build. Theoretically with this product we would have approx. 170k of the new mortgage at current tracker rate +1% (approx. 1.8%) with the balance (approx 150k) at the SVR (approx. 4.6%).
We are currently in negative equity to the value of approx. 35k. We want to sell our current home and bring the negative equity with us to the new mortgage. The self build will however cost more to build than will be valued in the current climate (350k valuation vs 380k to build). Unfortunately due to location that is the max valuation we were given.
AIB have said that in order for us to move and get a new mortgage we would need to pay the balance of the negative equity approx. 35k and then fund the self-build with our savings to the value of 60k.
This is effect wipes out our savings for a mortgage of 322k. I was hoping to hold on to the savings. Repayment capacity is not an issue and I was hoping to hold onto the savings.
So my questions:
- Are AIB being unreasonable in their approach? They essentially want use to put up approx. 90k in savings (addressing negative equity and balance for deposit) for a mortgage of 322k.
- Do you think other lenders would be a better route for us (assuming we paid AIB the 35k negative equity and just move on from them).
- Any other feedback on the situation?
Our current situation is as follows:
Joint application
Current home value - 135k
Amount mortgage outstanding - 170k on Tracker
Self build is a five bed detached - 3300 sq ft (approx.)
Value (and this is where the challenges start) - valued at approx. 350k
Build cost - approx. 380k (so build cost is more than house will be valued on completion due to area and current climate)
Mortgage required - 92% - so approx. 322k
Term of Mortgage - 25 years
Amount of savings - savings of 95k
Age of Applicants. - late 30's & early 40's
Employment situation - Private sector - both full time for number years
Have you any children - 1 child
Car loans - 1200 pm
Cr. Card situation. - paid in full on monthly
Salary's - 140k and 56k
No other loans etc
The issue we have is that we want to use the Tracker Retention Product offered by AIB for the self-build. Theoretically with this product we would have approx. 170k of the new mortgage at current tracker rate +1% (approx. 1.8%) with the balance (approx 150k) at the SVR (approx. 4.6%).
We are currently in negative equity to the value of approx. 35k. We want to sell our current home and bring the negative equity with us to the new mortgage. The self build will however cost more to build than will be valued in the current climate (350k valuation vs 380k to build). Unfortunately due to location that is the max valuation we were given.
AIB have said that in order for us to move and get a new mortgage we would need to pay the balance of the negative equity approx. 35k and then fund the self-build with our savings to the value of 60k.
This is effect wipes out our savings for a mortgage of 322k. I was hoping to hold on to the savings. Repayment capacity is not an issue and I was hoping to hold onto the savings.
So my questions:
- Are AIB being unreasonable in their approach? They essentially want use to put up approx. 90k in savings (addressing negative equity and balance for deposit) for a mortgage of 322k.
- Do you think other lenders would be a better route for us (assuming we paid AIB the 35k negative equity and just move on from them).
- Any other feedback on the situation?