First Mortgage - Advice needed

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gooner

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Hi. We are a couple with decent saving and would like to get our first mortgage. We have saving of approx 100k, made up of bank approx 75k , saving bond approx 12k and credit union approx 15k. Monthly savings are approx 600 euro. We both have good credit history and never had any loans of any kind. We have a house at present (so no rent) which would probably be demolished to make way for a bigger new house. Only bills are the usual day to day costs and two cars. We are both working full time with a combined income before tax of about 45k per annum.

We are either looking at demolishing the existing house and building a new larger house.Another option is to keep the existing house and extend and renovate. To that end we are getting mixed opinions with most architects we've spoken to saying to go new and most builders saying extend and renovate. We are in one of the more rural settings, so have the first option already priced up at approx €160k builders finish.

Anyway as we have never been down the mortgage/loan route before we are clueless as to our options. So your advice would be most welcome.

1. Do we simply go to the bank we deal with for the mortgage, shop around all banks or go through a broker?

2. Do we use some, most or all our savings or borrow more and hold onto some savings?

3. Do we use the credit union at all. Not even sure if that's possible for building works. Guess they could come in useful for furnishing and finishing off. So might be worth keeping some funds with them?

4. We are in our mid 40's so I guess we should aim for a shortish pay back timeframe?

5. Is there anything else we should consider at this stage?

Thanks.
 
1. You should shop around. There is nothing stopping you from applying to a few banks and comparing their rates, etc. I used a broker and will again for my next mortgage, but thats personal choice. (I think I was very lucky with the broker I used - but others might have a different view)
2. a few grand in savings is always nice to have - you never know when you need a rainy day fund.
3. The interest rate in your credit union will be much higher than a mortgage rate.
4. your mortgage term will depend on what you can afford to pay monthy, or what the banks think you can afford monthly. Remember if you are on a variable rate you can usually over-pay your mortgage whenever you want. So you can shorten your term when you can afford to. The banks will also limit your term to a max age (I think 66? I might be wrong) So if you are mid-40's they will probably limit you to a term of 20-ish years.
 

Do you like your existing house. Do you need a brand new large house? Give us more of a feel about the house and your thinking. What is wrong with it. It seems to me your morgage decision should be based on being able to afford 600€ monthly. I've been watching a fab job on a house for the last year, bungalow to two story. But I'd say it cost a fortune. And my brother did a fab job on extending his own house. Lovely job. About 70K I think for new dining area, living, study, main bedroom and bathroom. (he's in the construction area).

Does the 160K include the architects fees, from start to finish. Where will you live in the mean time. Another cost to be added up. And I can guarantee you 160K will become 200k. In addition, builders finish is one thing, but the final finishing can cost a lot.
 

Cheers. Will try them all then so. Will also take a look at a broker, if I can find a good one.
 


Cheers. Current house is a small 2 bed approx 50sqm from early 70's with no central heating, but it does have a cavity and is dry. Still considering our options, but have been told by architects that since the house is small then all that would be left is a few walls when gutted. Builders seem to take a different view to it. Stuck between a rock and a hard place on that one. Price does not include fees. We do have planning already for a 150sqm story and half replacement. I do understand that costs and budgets can spiral upwards fairly quickly, so extending and renovating could have pluses. We'd have rent free accommodation while the building work would be going on.
 
My personal preference would always be to go with the builders. In addition I wouldn't be able to cope with an architect telling a builder what to do when I'd rather be discussing it myself. My sibling I was telling you about is currently dealing with one of the top British architects and I mean tops. Nightmare he tells me.

But it does depend on the person. You're not building the Taj Mahal. This is just a standard extension it seems to me. I'm not that old, but I reckon I'm too old to put up with major renovation around me. Had non major reforbishment myself 2 years ago, not building really, painting, repairing, fixing, and couldn't wait to get the men gone, thought I'd go mental if they spent another day. Well worth the result though.

I do advise you go and see in three locations what extensions the builders have done and ask the owners how happy they are.
 

Thanks for the reply. Yeah I guess there are financial pluses to extending. I think there are still grants for energy upgrades and vat off to a certain limit. There is a very good builder close by, not the cheapest around but very experienced and good.
 
One thing you will have to factor into your costs is where you are going to live whilst the work is going on regardless of what you do, where are you going to store your things etc. That could all be a cost

Risk of an existing site/building is that you don't know what you will find once you begin demolition. Hence if you go the extension route, I'd be inclined to keep some money back for contengencies. If you don't use it, then at the end you can either pay a lump sum off against the mortgage or go on a good holiday (as you might need it ) or both

If you are not comfortable dealing with banks, use a broker.
 

Cheers for the reply. We have somewhere to stay rent free and don't have much to store at all. You are correct on not knowing what may be thrown up with renovation.
 
gooner said:
There is a very good builder close by, not the cheapest around but very experienced and good.
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For goodness sake isn't this perfect. You don't get good, close by, experienced for cheap. In addition he can't run off on you. His reputation is on the line. And you know him.

Are you going 'up' with the extension? I ask because if this is your forever house I would recommend building to suit or be adaptable for old age. At a certain stage it's nice to be able to do everything on the one level. As it's so damp in Ireland good insulation, good quality windows and doors are a must. And don't please put in one of those pokey en suites that are so beloved of Irish people. Can never understand how the owners of houses put up with the worst bathroom in the house. I have the full sheebang myself. Full bath, separate shower, double sink. Window. A pleasure to be in.

What are you planning on doing. I like dreaming about houses. Light is very important. Place the windows carefully. I've an exceedingly sunny house.
 

Yes that's what I mean, he's not the cheapest but from what I've heard he is great to work with and his work is top notch.I don't mind paying for this.

I am thinking about later years alright. hmmmm what to do.
 
gooner said:
I am thinking about later years alright. hmmmm what to do.
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Wider door frames, large bathroom on ground floor, main bedroom downstairs or spare room/study/storage for now that can become main bedroom later. Don't make your back door go thru a utility. Hate that. Also hate cold downstairs toilets off the kitchen via the utility. Laundry cupboard next to washing machine/dryer, located near bedrooms if possible. There is no reason for laundry room downstairs if you dry clothes in a machine. I had a house once that had a chute directly from the bathroom to the washing machine. Very clever.
 
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