Q. My home is worth € 280,000 with no mortgage but I need to do about € 45,000 worth of work on essential renovations. I am just wondering at age 58 single, no dependents but little income ( € 39K per annum ) will I get a bank loan or would you suggest going to the credit union ? Not even sure what the rules are there either. The column’s great and thanks for any advice. Fintan – Gorey Co Wexford
A. Thanks Fintan for the query. With most banks the maximum age on maturity of a home loan for a PAYE employee is 68. Therefore to service a € 45K loan over 10 years attracting the best interest – 3.45% ( fixed 4 years ), the repayment would be € 443.93 per month or just under 14% of your net monthly income. I always have a rule of thumb that your financial commitments ( mortgage, car loan, credit union loan etc ) should not exceed 35% of your net disposable income. So you would qualify IF you have no other loans outstanding AND you have a decent credit history ( the lender will do a check on you with www.centralcreditregister.ie – you can request a report, they are free and takes 3 to 4 days ) There will be some costs – mainly legal but also a valuation will need to be carried out. You will need life cover but shop around. The alternative is to go to your friendly credit union – they can give you up to 12 years to age 70 but their rate will be more expensive. € 45,000 over 12 years at 7.5% would cost you € 474.85 per month but there are no legal fees as the loan is unsecured. Think I would prefer to see the back of that mortgage before age 68. Best wishes.