How will we be affected? AIP to trade up next year?

M

mdina2106

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We have full loan approval for a new build that won't be finished until circa one years time. The builder is renowned for taking his time which we were fine with until hearing that restrictions will be imposed on mortgage lending. My reason for posting today is to see if we have reason to worry. We are married (32 & 34 yrs old) with 2 kids. Joint gross of €120k pa. No childcare costs. Bought a house in boomtime which is too small for our needs. Outstanding mortgage of 300k (earning 1, 100 per month rental, repayments 950 pm) & renting a house ourselves at €1, 300 per month for past year and half. We have €110k savings plus 30k shares if required. The purchase price is €360k & we are approved for €250k. Obviously we will need to get re-approved for loan throughout build. Should we be worried that we may not get re-approved? Any thoughts much appreciated
 
Switcher mortgages are exempt if the principle stays the same.

As are neg equity mortgages. The 80% LTV will apply to the new house alright though.

29% of loans in 2006 had a LTV of over 90%. During the boom, 2/3 of mortgages were for over 3.5 times salary and 1/3 were over 4.5 salary. The CB have seen the damage that that did and want to reduce the chance of it happening again.



Steven
www.bluewaterfp.ie
 
Many thanks for reply.
The house if we were to sell would probably set us back by 100k negative equity. We have chosen & was advised to keep property & continue to rent out. V strong rental area & is pretty much servicing itself as we've a tracker mortgage. So we won't qualify for exemption under these new rules. Currently we've a good chunk of savings after a good number of years I may add & can access more funds in shares if required.
Is rental income included in terms of working out affordability (multiples of income)?

It's very worrying to think that we could be midway through the build and be turned down for loan re-approval.
 
SBarrett thanks again for your input. Yes we have committed to the house with 10% paid (out of savings) & balance due on completion. Our loan approval will expire in Dec & house will not be completed so we won't be able to draw down funds. I'm correct in saying that the bank can refuse to extend / reapprove the loan approval? Or are we ok?
Incredibly stressed about all the uncertainty of this.
 
Regarding the part above querying will rental income from one property with an outstanding mortgage be taken into account in the 3.5 times limit when applying for a second mortgage?
I'd be interested to know how this would effect the 3.5 times limit restriction
 
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