how difficult is it to get a mortgage?

J

james79

Guest
Hi,

My g/f and I are currently talking to an architect and getting a house designed. We are going looking for a mortgage soon. We have a site already. We have savings of 10k but a joint loan of 12k. Income is 28k and 42k.
how difficult will it be to get a mortgage in the current climate? should we pay off the 12k before we apply for a mortgage? any other tips?
 
in the current climate, you should avoid debt like the plague

continue to save until you have at least 25% of the cost
 
What are you going to secure the mortgage on?
It may be hard to get a mortgage on property that isn't built yet.
 
What kind of employment are you and you g/f in? Being in a public sector job makes getting a mortgage easier.
 
Liam, sent you a mail but advised out of office. \If you have another e-mail PM me please.

Thanks
 
hey liam,

I work as a retail manager while my g/f works as a youth worker. We already own the site. We will be looking for around 220k to get the house built.
 
You should have no problem getting the mortgage James.
As you own the site already the bank will give you a mortgage for 100% of the build costs (i.e the 220k). How much is the site valued at?
Depending on your ages and the term you wish to put the mortgage over, your combined salaries will be able to support the car loan as well as the mortgage repayments if you so wish.
The interest on the car loan may be higher than any interest you are accruing on your savings so it may be worthwhile paying off/reducing the car loan in any case unless you need ready access to the 10k.
 
I would have thought that based on the salaries and the little savings and the outstanding loan, it may be difficult to get the mortgage, as I would have thought that you are higher risk, especially with no real proven savings to show. I would think also that the bank may be reluctant to take the site as collateral, as the current market suggests that they may be forclosing a number of houses/mortgages this year more then they would like. The banks are still lending, but they are now following the rules that they should have previously on teh amount to lend.
 
No offence Tank but your thoughts are off the mark.

The OP has a strong case, it will be approved.
If the loan is paid off (it shouldn't need to be) then in real terms the mortgage is only about 3 times combined income.

There are much weaker cases than this being approved at the moment.
 
No offence taken NorfBank, I just thought that banks were not offering more than 92% of the required mortgage, meaning that james79 would need savings of 20K. I totally agree that much weaker cases are being approved, but also note some previous posts where people approved with 4X by the bank have been left in trouble making payments. I think that with the news this morning from the government my opinions have now swayed a bit, and I think that it may relieve the pressure a little.
 
With a self build it will still be max of 92% overall lending.
Say for arguments sake the OPs site is worth 50k so the value of the site plus build costs is 270k.
The lender is giving a mortgage of 220k/270k = 82% loan to value.
The banks still have an appetite for self builds as on completion this property may be worth €350k making it an overall loan to value of 62% (220k/350k).
 
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