Do banks give out a mortgage to 3 applicants?

H

Hanks09

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Hi all,

Me and 2 housmates presently renting but are thinking that instead of paying dead money we could buy a house for approx 140k and each pay of our own bit of the mortgage! How does the banks look apon such applications?

Cheers.
 
Banks will lend to three applicants. It's viewed in the same way as a normal mortgage.
Just be sure to put a legal side agreement in place for your own sake that will outline what will happen if one of you wants out.
 
Cheers NorfBank! Can you tell me what is the shortest term possible on paying this back? All 3 of us could pay back our share of approx €50,000 in 5/6 years. Do banks do short term mortgages or could they give out a personal loan to all 3 of us. Pls advise, not too familiar with this kind of craic. Thanks.
 
Gernerally personal loans mean higher interest payments, so mortgage would be better. If all 3 of you are on good salaries with little or no debt, the banks would look favourably on you, I imagine.

In regards to shortest mortgage term, probably something you would have to discuss with the bank themselves. A €140k mortgage over 6 years at an assumed rate of 3.25% (could be higher, or lower) means monthly repayments of €2142 a month. Can you afford that comfortably between you?

Don't forget you'll need your deposit too - between 10% and 20% of the property purchase price.
 
I'd think long and hard before buying a house with friends. If you buy this year, you may be in negative equity for a couple more years, who knows. What if one party needs to move house (eg. to move to Australia, or buy a house with a partner, lost their job). What would happen then? It is a VERY BIG commitment to enter into such a huge financial commitment with friends. It changes the happy-go-lucky arrangement you have now, to one of being very committed to each other financially. So much so that any plans one person may have in the next few years, seriously affects the lives of the other two in the agreement.
 
You might have a search through the forum to note the people having big problems trying to get out of mortgages with ex-partners and/or friends. It seems like a mine-field when things go wrong and there is a property in the middle. You won't think it now (no one ever does) but it could get really complicated if things go south. Adding a third person (as opposed to just the traditional 2 person mortgage) increases the chances of someone wanting out early.

Sorry to be pessimistic. I just have been reading theses board for a good while now. Get a good lawyer to draw up an agreement before buying. Probably one each!
 
NorfBank said:
Banks will lend to three applicants. It's viewed in the same way as a normal mortgage.
Just be sure to put a legal side agreement in place for your own sake that will outline what will happen if one of you wants out.
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Unless i was given completly wrong information a few years ago or if they have changed the rules, when myself and my ex partner were buying our house i enquired about having my mother on the mortgage as well so we could get approved for a larger mortgage. I was told that only 2 people are allowed to get approval for a mortgage but we could put down an extra person on the deeds of the house.

So we only got a house of what we could afford between the two of us which as it turns out was a blessing, having problems with the mortgage we have now, let alone if we had one that could of been costing us an extra 400-500 euro.
 
I'll just second the advice to bear in mind what will happen if one of you decides to move your partner into the house or becomes unemployed.
 
Why is everyone looking at this negatively? Yes i agree that things can get messy with ex partners etc but that there is a lifetime committment, our situation is a 5/6 year business agreement (with all potential problems covered in a legal document). At the end of the term we sell the house. If we make a profit fantastic, if we make a loss well no big deal, we are still coming out with a few pound in our back pocket that'll will put us in a stronger position to go on our own after that. At the moment we are paying dead money on someone elses mortgage so why not pay our own?
 
The reason people sound negative is that they are just pointing out that it is necessary to think of the potential down side when entering any business
arrangement, and especially when it is with friends.
 
Hanks09 said:
Why is everyone looking at this negatively? Yes i agree that things can get messy with ex partners etc but that there is a lifetime committment, our situation is a 5/6 year business agreement (with all potential problems covered in a legal document). At the end of the term we sell the house.
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That's all correct perhaps but you are assuming that nothing is going to change for any of the 3 of you and that you will all stay in jobs, be able to afford your 1/3 of the repayments etc.

A mortgage doesn't work like 1/3 of a rent - you are not just liable for your 1/3 - even if one person stops paying their share, you will collectively have arrears on the mortgage. And you are all responsible for it.
 
Why do you call renting dead money, you are paying or a roof over your head. When you buy your are paying the bank interest for god knows how long and that is also dead money. You may also not make a profit at the end of it. Renting is the way to go at present not getting into debt when jobs are not secure any more and the economy is up in the air.
 
Joody1 said:
When you buy your are paying the bank interest for god knows how long and that is also dead money.
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You are paying the bank interest for the term of the mortgage (so god knows and you know how long) , at the end of the mortgage you will own the property.
If you rent for 30 years, you own none of the property but have probably paid off someones elses mortgage.

I agree that now is a good time to rent but saying having a mortgage is dead money is just wrong.
 
huskerdu said:
The reason people sound negative is that they are just pointing out that it is necessary to think of the potential down side when entering any business
arrangement, and especially when it is with friends.
Click to expand...

Folks i do appreciate you pointing out the potential downside and i thankyou for that. Maybe i am being too optimistic here on this but can anybody see anything positive to this situation? (all jobs are secure but a legal framework will cover all the possibilities like job loss, partners moving in etc etc)
 
ok good points, you pay the mortgage and will eventually own the house, instead of paying someone else mortgage and owning nothing. Even if you go your seperate ways you can rent out the house and have someone else pay your mortgage. In 25 years ( or how ever long you took the mortgage out for ) your'll have a 3rd of the house price as a little nest egg for yourself, or to pass on to your kids, bascially to do what ever you want with.
 
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