Dot writes: yesterday the broker called to say that the lender we’d been reckoning on getting our mortgage from had reduced the amount they were offering us by almost €40,000, because I’m a public sector worker and might be subject to further pay cuts. I was upset, to put it mildly. We could just about find another €10,000 by spending our decorating budget but the gap would remain appalling. So this time yesterday I was busy (a) crying; (b) emailing the estate agent and the solicitor (oh dear, if we pull out how much will the solicitor charge us for what he’s already done); (c) contemplating our remaining possible sources of finance, which are both Irish companies heavily indebted to the state and charging higher interest than our preferred (Belgian) lender. I knew that Ken was very iffy about the whole project and had been extremely determined we should go with this lender or none.
Six or seven hours later we were engaged in a fraught conversation about whether this was just a stupid time to be buying and whether we should take this opportunity to get out. My arguments: I want a house, dammit. We’ve found a nice one in a pleasant area. AIB wouldn’t be charging that much more than KBC and we would be on a fixed rate. Hugh will start school in 2012 so this is a good time to be deciding where to live long-term. Ken wants to start a business at some point and we should get the house sorted out first. OK, prices will continue to fall, but interest rates will rise and lenders get meaner and our chances of buying where we live now remain slim. Ken’s arguments: look at the news. Look at the blogs. Look at the stress tests. It’s all pretty grim. Consider the opportunity cost of paying more than we have to for a house. Let’s just wait; let’s not be rushed into buying. And I was beginning to accept he had a point.
But this morning Ken did some sums and concluded that we could afford the AIB mortgage. He also did some reconsidering on the TRS issue, which is a tax relief that is to be phased out and which we would not get if we waited until next year: he decided that, while it is in effect just a sweetener, it would save us some money while we wait for the fairly large salary increment I am due in the not far distant future. He started to soften. And as I began to come over to his point of view, he began to come over to my point of view, and we seem to have agreed that it wouldn’t be such a disaster after all to take out a mortgage with a lender that is now 93% state-owned and announced 2000 job losses this morning. Would it?