Higher amount if getting a 35 year mortgage?

B

Bluebean

Registered User
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hi everyone,

Is it possible to get a higher multiple of your salary if you are young enough to take on a 35 year mortgage?
I've seen a house for 215k. I currently earn 25k, have 5k in the credit union and no other loans. The house has 2 bedrooms so I could apply for the rent-a-room scheme also.
Do I have any hope of getting a mortgage for c.200k, and either borrowing the rest of credit union or possibly a family member?

At the moment I could easily prove that I have been paying 375 in rent and 370 in savings with the last year. I know I could pay out 900 euro a month for mortgage without too much difficulty, but would a lender believe this as it would be 50% of my net income per month?

thanks in advance
 
Well, unless you are one of the professionals that can get a 100% mortgage then the absolute maximum that you will be able to borrow from most lenders is 92% or €198K for a start and, even then, a lender will only advance this amount if they are satisfied that your repayment capacity is sufficient to service this loan. According to [broken link removed] €25K for a single person on PRSI Class A1 and standard credits/allowances would be c. €1,800 per month net. As such €900 would be 50% of your net income and lenders would generally set a lower bar on what's sustainable/viable (e.g. c. 30-40% I think but there may not be hard and fast rules). According to Karl Jeacle's mortgage calculator €198K over 30 years at a fairly competitive 3.1% would cost c. €850 p.m. to service. This does not give you much headroom for ancillary charges (e.g. mortgage protection life assurance, home insurance, domestic bills, other day to day living expenses and possibly fluctuations in interest rates going forward). To be honest it all looks a bit tight to me in terms of affordability and ability to service such a loan but I could be wrong. Some of the suggestions in this topic might be of interest to you in terms of stretching the fundraising a bit further if you so choose.
 
thanks Clubman, I'll go through the other post again. I would be hoping to get approx 200 a month rent from the second room, but I am aware that this may not always be guaranteed money. It would be tight enough to start with, but manageable I believe. Plus I would be hoping that my salary would increase in the next year or two, I am currently considering changing jobs.

To be honest, the house just seems like a very good opportunity as it is in the area that I want to live in, and is the only one that comes anywhere close to under 300k.

thanks.
 
Have you applied for loan approval already and, if so, what sort of response/offers have you got?
 
Hi Bluebean,

Your salary of 25k qualifies you for a shared ownership scheme.

Have you looked into this ?


--
You qualify for the Shared Ownership Scheme if you are:

* in need of housing and your income satisfies the income test below....

see link:
 
On a salary of €25,000 and with room rental your maximum loan amount, even with room rental, is €165,000 over a 35 year term. Lenders stress test mortgages at between 1 and 2% over current rates and work on a maximum of 45% of your net disposable income (50% for professionals).

Sarah

www.rea.ie
 
Thanks for all replies, looks like its just a non runner sadly. I would qualify for shared ownership but maximum loan amount from my local council is 130,000 so that's no use to me.

Thanks.
 
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