Own property now want to take out a mortgage on it?

H

herestoyou

Registered User
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We recently bought a 3 bedroom bungalow (in need of upgrade) on 2 acres funded by a credit union loan of €50k at interest rate of 11%. We only required €35k in the end so the other €15k is sitting in my shares at present because if we cant get a mortgage we will do up the original bungalow with this money. Paying €845 per month. Title absolute on deeds.

We have got planning permission for an extension and upgrade of wastewater treatment plant.

We own another house which is rented out at present, mortgage owing is €140,000 value is approx €100,000 so roughly €40,000 in negative equity. On a tracker mortgage. Rent is more than covering the mortgage. I am uncertain as to a tracker transfer mortgage as I dont think the rented house would sell quickly. (dont you need to sell within 6 months)

We are renting elsewhere, paying cash, €400 per month, no record.

My salary is €37,000
Husband is self employed, profit 2015 €36,000, 2014 €23,000, 2013 €17,000
2 kids
Savings of €11,000 secured against credit union loan.
Approx another €12,000 already put into house, getting planning, clearing site and laying foundations for extension.

My question is can equity be released on the property we own to fund a mortgage. Looking for approx €120,000 to build extension and clear credit union loan. Any ideas welcome.
 
How much is your newly purchased property worth?

How much do you need to borrow to pay off the credit union loan and to do the work you want to do?

Brendan
 
Hi Brendan,
The new property is worth approx €80k we are looking for approx €120,000 to clear the loan of €35k and build the extension.
The house once build should be worth approx €200k (I dont know if this has any bearing)
Many thanks.
 
It's unlikely that the lender will value the property at €200k.

They might be shy about lending you €120k on a property you bought for €80k.

But with salaries of €60k to €70k,it should be possible to borrow €120k. Although you already have a mortgage of €140k.

This is a case where you should consult a mortgage broker. They will present your case in the best light.

Brendan
 

Maybe I am misunderstanding things but would you not exactly know what it is worth given that you just bought it, or did you anyways pay 80K?

based on plans etc, you should get a good indicative evaluation from an EA with local market knowledge (which is probably where the 200K comes from i assume).
you are certain that 85K is enough to bring the house in good enough shape to get a valuation of 200K, given the current value is only 80K?
LTV would be reasonably though at about 60%, you might not be able to keep the tracker on your other house if they find out that it is no longer PPR.
 
Thank you for your replys,
We bought at auction (allsop) and have done some condiserable ground work. Cleared off the whole site, got full planning permission for extension, laid foundations. So its not as straight forward as what we paid is what it is valued at. We are waiting on EA to come back to us with exact valuations.
 
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