Mortgages Denied - Don't know where to turn

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LovelyHome

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We were lucky to sell our family home which was outside town in a rural area and secured 340k for it which was good considering where it was located.

We paid off a few bills and purchased a 40 year old house in great area in a city centre which are guiding just over 500K currently. The house was pretty much left the way it was and needs a lot of tlc. We got it for the bargain price of 330k due to the work needed. It's livable, but bleak and quite filthy. We were delighted as based on our salaries, etc, we would never have been approved for a mortgage for 500k and we avoided stamp duty on the finished house.

We moved from BOI to NIB and luckily got a tracker mortgage for 200k which secured the purchase. We also paid 15k stamp duty. We are currently renting a house and applied for a top up of about 60,000 but NIB told us flatly that they wouldn't give it to us.

Since then we have gone to a broker who tried AIB, Bank of Scotland who are saying they we won't quality for the top up. We got approval in principal with EBS but with a condition that we can't meet.

We are at our wit's end as we are paying out rent on a house and paying a mortgage on the house we bought. We need at least 60k to make it liveable.

Our parents will lend us 25,000
We got approval from Credit Union for 60k but it's too costly as it will cost 900 per month.
We just don't know what to do!
There is a granny flat attached to the house (converted garage) which help towards the mortgage payment (at least 400 per month) but we need the money to do the work before we can move back.

My husband is self employed and is affected by the slowdown so I am the main earner and I am only working parttime. I make 1400 per month and he is lucky if he brings in 1400 per month after his outgoings.

I don't know if we should just move back into the house as it is and try to reapply for mortgages in a year or bite the bullet and go with the credit union loan. Then we will be strapped and will try for a mortgage to pay this of but I think the banks are not happy about debt consolidation.

Our mortgage payment at the moment is 750 per month and Rent is 800 per month.
 
I forgot to mention that we got approval in principal for the credit union loan on the condition that we put the 25k into the account.

Any advice would be so welcome.
 
Can you live in the granny flat while fixing the rest of the house? That would save you the rent you're paying at the moment. (Do you have kids?)
Can your husband do any of the work himself if he's not working so much at present?
Just what does it need doing? Could you get minimal work done on the loan from your parents? Can you live in it with minimal work being done or is it a complete derelict? Can you work work done on it room by room and put up with discomfort for a year?
 
Thanks for the response.

In relation to living in the flat - we have two children so that isn't possible.

We have thought of just patching the house up and moving in but feel it will cost at least 25k to have it in any shape and all the work we plan on getting done is pretty big (structural) so it's all or nothing.

We are revisiting the Credit Union loan idea and may take that only option. We will be killed with high interest, but at least the Cr. Union said yes when the Banks said no.

Thanks though for the ideas.
We are still trying to think of some way of doing it so that the monthly payments will be managable.
 
Sorry to hear that you didn't get the mortgage LovelyHome...

Consolidation may not be possible, even in a year, so I wouldn't bank on it. If you take the CU loan, I'd look at it for the entire term and judge whether you can afford it on that basis, not on the basis of hoping you can consolidate to a lower rate in a year (or two) in the future. It may be possible, but I just wouldn't make any plans based on that.

I'd move into the house now, if it is indeed livable. You probably know this, but, if it's filthy, it's surprising how much difference a really good clean out & painting can do. If heat, water and light work, then you've got the basics. If you move into the house, you would save on rent and then do the granny flat up (with your extra income or your parents' loan (or a portion of the CU loan; you don't have to take the full 60k)). Then you could rent that out and get extra income to support another loan application. I know it would be hard to prioritise doing up the granny flat, rather than the main house but, if it can be a source of income, then that will help with both a new loan application and with general monthly income into the household.

€800 is a lot of money on rent - it would support a mortgage of (about) €200k at current rates, for example. Unless the house is verging on dangerous, I'd move in and see how it goes. Once you rent out the granny flat and you get a better loan rate based on that extra income, you could rent a separate place again for the period required to get the work done to the main house. It's all step-by-step, but I think that getting rid of that rent obligation is a priority.

Best of luck with it
Sprite
 
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