dilemma: being cautious Vs age, mortg approval, work..

dear Pinsters,
I will highlight my dilemma:
I am 33 years old and have a huge urge to own a home.
I have mortgage approval for 260,000E.
I am working in construction and i’m on 45,000k (job due to end at xmas).
I have work lined up for next year(family business and won’t be getting pay checks if you know what I mean but will be able to make mortgage repayments)
When economy picks up I will return to engineering.
I realise that prices are still dropping but can you understand my dilemma that I will not be in a position to get a mortgage for the next few years and will be 35,36 when I get back to a salary that the banks will entertain…
What advice would you give me…

You need to balance your: “huge urge to own a home” with some realism on what “economy picks up” might potentially mean.

I’m afraid in your position, I would take a cold shower on that urge.

You have more reason than most to defer your decision for a couple of years.

Dont really know what you mean by

Will you be working in the black economy? Or not paying tax because if you are asking someone should you buy a house now using legit income and continue to pay for it using untaxed income you’re on a loser with me

MOD Edit: Play the ball, not the man.

My advice is that you do not encumber yourself with any debts that you do not have documentary evidence that you will be able to pay off.

I’m 36 years old. If I had listened to my “huge desire to own a house” at your age I’d be living 45 miles from where I work in a property that had dropped 100.000 in value since I bought it.

I doubt you’ll get past approval. You shouldn’t anyway.

Reminds me of Brendan’s (AAM) advice that everyone should run out now and get a mortgage incase they lose their job during the recession!

He didnt really say that , did he? XX

With an addendum that you were also better off taking out an interest only mortgage as house prices only ever go up.

Just to say - You have had a Luckey Escape!. Get a site from your relatives if you can and do a DIYU over the next 7 years @ 18k per year from a Credit Union, after all you are an Engineer and you should get work in plenty of countries and places.

Why do you think I will not get past approval anyway?
Is it the case that banks give you mortgage in approval and then when you want to draw it down they grill you on your ability to pay back and be in full time work for the forseable future?

Is this a joke?

[quotesfromthebubble.blogspot.com … under.html]
(Quotes from the Irish Property Bubble: Brendan Burgess, Founder, Ask About Money (askaboutmoney.com))

“If you’ve a real need to buy now – for example, if you are starting a family – don’t allow the fact that your job is a bit uncertain to put you off. If the worst happens, the government has ordered AIB and Bank of Ireland to lay off homeowners in arrears for at least a year, while other lenders must give them a six-month breather.”

Don’t bother being financially responsible, kids; that’s for suckers. Get other taxpayers to bail you out.

At the same time, you should of course “fill your pockets” with bank shares.


What approval do you have exactly?

Was this a once off visit to a bank where they gave you approval in principle?
Have you gone futher and supplied them with documentation from where you work to prove?

Have you told them you work in construction?
Have you told them you will be changing jobs soon?

He says “With the benefit of hindsight, [buying] would not have been a good idea over the past 5 years.” Isn’t it a real shame that people didn’t join Ask About Money over the past 5 years and inform Brendan that there was a bubble? There was the poor créatúr, literally crying out for an opposing point of view on his wonderfully free and open forum, and no-one would offer it.


I don’t see how he could possibly reach that assessment without someone writing a balanced piece summarising the arguments relating to the future direction of house prices in Ireland.


It’s very simple, assuming that the mortgage you have approval for now is for 25 years, with each year that passes plan to take a shorter term mortgage. So if you buy in 3 years time only do so with a 19 year mortgage. Prices are falling and another 30% off is being predicted, so that should be perfectly possible by then, or preferably choose a shorter term mortgage. If each year you wait shaves 2 years off your term it’s easy to see why you should wait.


Unfortunately The Real Crash (equites) is coming in the fall…

thanks all for replies and views,
So the unanimous verdict is that I would be crazy to buy anything now and that there is another 30% more to come off prices.

I know of a few people buying (or have bought) apartments in the city centre lately …Why would they have done such a crazy thing?

In did not know that all properties of all types in all areas would be coming down by 30% - I thought there would be variation between desirable places to live and not so desirable.

In relation to mortgage approval in principle I met with the banks and gave them all the documents and they know the industry i’m in.
I have not told the bank that at Christmas i’ll be finishing here(btw possibly could have another years work) with the prospect of being out of work for a while.(I will have money to pay mortgage and parental support)
Excuse my ignorance but are the banks just not giving mortgages to people in the construction sector?
Are they approving it in principle and then not following through?
Would I need a letter from my company saying I’ll be employed for years to come?

Your views and comments are really valued in helping me make the right decision.

People also bought at the height of the boom. Hell, they even bought 2 or 3 apartments at the height of the boom. People do stupid things. That’s the explanation. A friend of mine just bought too - short of breaking his legs there’s not much I can do about it. In fact, I’m rather surprised there hasn’t already been temporary increase in house prices as people, who think that because insanely overpriced property is now merely overpriced, it’s actually “cheap” rush out and “fill their boots”:


Funnily enough, prices are coming down the most in the more desirable areas - precisely because, as they were desirable, prices rose there the most during the bubble.

Surely this is the main fact behind whether or not a bank grants you a mortgage - whether you can actually pay it. Are you in a rush to buy a place simply to get it before you’re laid off and have to tell the bank you are? That doesn’t strike me as the wisest of courses.


MOD Edit: Removed unnecessary gratuitousness.

I don’t think you should be looking on websites to help you make such a huge decision penny. It seems that you want to buy a property and are confident you have the means of paying the mortgage should you find yourself out of work.
Your bank is the only source that will give you some of the answers you are looking for. While approved in principle there is no guarantee that they will ultimately loan you the money.

What they may do is ask for your parents to go guarantor on the mortgage which would suit your circumstances.
For what it’s worth if you are looking to buy a home then buy a property that you can see yourself in in 10 years time, as opposed to buying an investment property like an apartment which you may have trouble selling should your personal circumstances change i.e. you get married and have kids.

I’m starting to conclude that there are just too many properties on the market in Ireland for there to be any noticeable DCB. Has this ever happened before? Has there ever been a crash where there is such a huge oversupply of properties? There are over 400 houses in nice parts of Dublin that meet my minimum needs, and I’m not even sure if I’ll be moving back to enter the market. That’s just not right, it’s great for me, but my god the is country screwed.