Declined for Mortgage for 185k. my annual earings are 33k gross.

The OP wants 6 times salary and can only manage to save 200 a month while having an overdraft in a well paying job?

A strong position would be to have at least 10% of the purchase price saved, plus legal and tax costs. Borrow 3 to 4 times salary, borrow over not more than 20 years and be able to afford interest rates rising by say 2 -3%. Ideally he should have no other borrowings, this means no car loans, credit card debt, overdrafts etc. He should also be able to demonstrate that he can save the same amount as the mortgage amount will be for about 6 months.

Re: Declined for Mortgage

Brendan said:

How much is the site costing?

You are asking for a mortgage 6 times your gross income? That seems excessive to me, although I was raised on the expectation of 2.5 times gross salary.

Brendan

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5-6 times was the norm during the celtic tiger. If it was left at 2.5 salary we wouldn't be in this mess now.

Lets put it another way. What do you want the €185k for? Have you recieved quotations from contractors? A 3,000sq. ft. house in the boom times could be built for €160k, via. direct labour.

Pope John 11 said:

Lets put it another way. What do you want the €185k for? Have you recieved quotations from contractors? A 3,000sq. ft. house in the boom times could be built for €160k, via. direct labour.

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When you say via direct labour, do you mean with your own 2 hands?

Or would the 160k include the cost of emplying tradesmen, labourers?

I'm trying to establish what the cost per square foot of a "new build" would be either in Boomtime or evenn NOW if possible. I would then have a benchmark of what teh cost of a property would be, against the ridiculous askingprices.

Thanks.

When I was getting my mortgage last summer, they (AIB) based what my repayments would be as a % of my net monthly pay, think this is the way they do it now. I had no loans, overdrafts and savings of €25k. On a salary of €53k, I got €306k over 35 years. They also took into account the fact that I would rent a room (this is why singles can end up getting a higher multiple of their salaries than couples).

Before my rental income from renting the spare rooms, my mortgage is less than a third of my monthly net salary and very easily affordable, so I don't agree with pjmn and Brendan on their 20 year advice...

amiafool said:

When you say via direct labour, do you mean with your own 2 hands?

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Direct labour generally means that you don't employ a builder to take the job from beginning to end - you hire all the sub contractors, provide their materials and get your hands dirty to keep the project ticking along. But you earn the 15%+ that you save.

Or would the 160k include the cost of emplying tradesmen, labourers?

I'm trying to establish what the cost per square foot of a "new build" would be either in Boomtime or evenn NOW if possible.

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I've recently got a quote and the price per sq ft was pretty much the same as in 2004 for the same builder. The price varies considerably depending on your location.

160k would be on the low end for a 3000sq ft house - low spec and only a builders finish I'd guess.

I would then have a benchmark of what teh cost of a property would be

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Not all houses are created equally. if the house looks pretty much like loads of others in the area and is fitted out with 'standard' spec (white pvc windows and loads of pine inside are often an indicator) it would have been a lot cheaper to build than houses that are that bit different or are fitted out with higher spec. Be prepared to look at the detail