Mortgage Advice

D

dub_guy

Guest
Hey just asking for advice on how difficult it is to obtain a mortgage. im earning 45k a year. have close to 100k in saving and one car loan which is sizeable at 640 a month. problem is most of my money is in fixed term deposit for another year. just recently ive seen places id like to buy coming into my price range. these are properties in the right area at the right price. when i put this cash away i didnt expect prices to drop this quick and thought it would be at least another year before i would buy. Im looking at paying about 160k and id be able to rent out a room if i wanted.
 
I probably have access to 25k and another 75k in a year...
 
Lenders look at 3 things
1. Loan to Value (LTV) which in your case is low as you have a big deposit
2. Income multiple (IM), on 45k you have strong IM for a purchase of 160k with 100k deposit.
3. Affordability – the car loan is high so this will go against you, you might want to think about clearing the loan with your savings or find a lender that’s not too worried about it.

There’s usually a penalty for early withdrawal form fixed term deposits where they give you less interest than they otherwise would have had you stayed the full year, up to you to weigh up pros and cons.

You would have a strong case and all the main lenders would want to lend to you. There are some decent looking 3 year fixed rates at around 3% that I’m thinking of going for.
 
I am not going to take my 70k that has another year to run because it is on a high interest rate. Just wanna see what advice there is out there.
 
From your 25k, you will need 12.8k for deposit plus say 2k for legals so c15k in total leaving you with 10k in cash. Can you pay 10k off the car loan to bring the repayments down? Could you reduce the car loan repayments for a short time until you drawdown the mortgage.

Does the institution where your savings are held provide mortgages? This could be your best bet.

On the face of it you have a decent case but banks are anti any personal debt at the moment especially for first time buyers.
 
Money is with Irisgh Nationwide. So im not sure what there policy is at the moment. I could reduce car payments by paying off some of the loan and increasing the term. i prob need to talk to someone in the know
 
Go to the institution that holds the fixed term deposit and if they can facilitate mortgages ask them to put a lien on your term deposit. ( irish nationwide are really not lending at present but try this angle )

A lien is a hold on your money, so that you are unable to withdraw any funds without their permission,ask your bank to explain .

This saves you on any breakage costs you may incur in encashing your savings .
 
Cheers Senni.. have a meeting with my bank this week so ill see what they say...
 
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