Buying a second house

K

karll

Guest
Hi just looking for a bit of advice as I dont know where to start, basically my nextdoor neighbours house is for sale for 100,000 as its attached to my house Id love to buy it, probably rent it initially biut ultimately look to knock the wall down and combine thee two into one house. My current mortgage is with BOI I have it 4 years it was 320,000 so think theres about 308,000 left on it.

The mortgage is in my name with 50,000 guaranteed by my Father, my wife works part time but is about to start a new job so our household income will increase by about 25,000 a year. We have no problems with our current mortgage, but no savings. What would be our best option if we wanted to look to getting a loan for the neighbours house? I presumbe a new mortgage is needed, could my wife apply as a first time buyer? If so would she need a deposit and would she be ikely to get approval earning circa 33,000 a year?

Alternatively we could apply together but with the negative equity on our house Im not sure how that would be viewed, I earn about 39,000 a year...

Cheers,

Karl
 
Not to put a dampener on it but does this mean you are in negitive equity of over 200k on your own house?
If you go for this make sure you can cover both martgages if the interest rates increase by 3-4%.
 
Your wife is not a first time buyer. You will assessed together by a bank whether you like it or not.

You want to get a 100% second mortgage for an investment property with huge negative equity on your first mortgage.

I would say you have no chance,
 
Hi Karl

How much is your house worth?

If you are in serious negative equity, then I doubt if you will be able to get a mortgage.

However, an opportunity to buy the house next door for €100k won't come up very often and you should explore other ways to achieve the same objectives.

Why is it only €100k? Is it the same as yours? Do they need a very quick sale? What could it be rented for?

Would your father be prepared to buy the house next door in his own name? Do you know anyone else who would be prepared to buy it as an investment who would be friendly to you and maybe sell it to you when your financial position is better?

Brendan
 
You haven't a hope of getting another mortgage for that property and you will be better off without it. Sorry.
 
Brendan Burgess said:
Hi Karl

How much is your house worth?

If you are in serious negative equity, then I doubt if you will be able to get a mortgage.

However, an opportunity to buy the house next door for €100k won't come up very often and you should explore other ways to achieve the same objectives.

Why is it only €100k? Is it the same as yours? Do they need a very quick sale? What could it be rented for?

Would your father be prepared to buy the house next door in his own name? Do you know anyone else who would be prepared to buy it as an investment who would be friendly to you and maybe sell it to you when your financial position is better?

Brendan
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Hi Brendan, thanks for the response, my house is semi detached with a much bigger garden and side entrance, next door isnt in great condition, Id say I could probably get it for 90-100 as the seller who I know well wants a quick sale. Going on house sales on my road Id say my house is worth about 200 meaning Ive 100 negative equity but like I said, weve no problems paying our mortgage Im in a secure permanent job and we will now have an extra 30 grand or so coming in a year that we didnt have before. Id say I could rent it easily for 7-800 a month and it wouldnt need an major work to get to this stage, nothing I couldnt do myself. Im hoping despite the fact that Im in negative equity the bank will base there decision on the fact that we have enough income to cover both mortgages, wishfull thinking maybe but like you said its and opportunity that wont come up again and down the line we could knock the wall down and double the house size...
 
Brendan Burgess said:
If you are in serious negative equity, then I doubt if you will be able to get a mortgage.
Click to expand...
I would hope that even without serious NE, the OP wouldn't get a mortgage or else the banks have learned nothing from the recent past. While the idea is great and it's a fantastic way to get a much bigger house at relatively low cost, this is classic Celtic Tiger stuff - the OP currently has a mortgage of 308K on a 39K salary (almost 8X salary!) and wants to up it to 408K (10.5X single salary, 5.5X joint including wife's new salary). That is just too much debt on those salaries.
 
karll said:
my house is semi detached with a much bigger garden and side entrance, next door isnt in great condition, Id say I could probably get it for 90-100 as the seller who I know well wants a quick sale. Going on house sales on my road Id say my house is worth about 200 meaning Ive 100 negative equity but like I said, weve no problems paying our mortgage Im in a secure permanent job and we will now have an extra 30 grand or so coming in a year that we didnt have before. Id say I could rent it easily for 7-800 a month and it wouldnt need an major work to get to this stage, nothing I couldnt do myself. Im hoping despite the fact that Im in negative equity the bank will base there decision on the fact that we have enough income to cover both mortgages, wishfull thinking maybe but like you said its and opportunity that wont come up again and down the line we could knock the wall down and double the house size...
Click to expand...

I don't think just because your own house is semi detached with a much bigger garden can justify the house next door going for less than a 100,000 grand. In fact if one thinks about it they should be no more than 30 or 40 grand in the difference. You say it requires major work but nothing you can't do yourself so that probably means it's heated, connected up to the electricity, double glazed and all it needs is some modernisation and decoration that would probably cost no more than 15 or 20 grand.

Tread very carefully here you are already up to your eyebrows in debt, what on earth are you taking on more for.
 
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