Mortgage Approval

T

tosh100

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Public Servant, early forties, married 2 kids - no outstanding debt, income €83,000.

Applied for mortgage with AIB - how much do you think they approved??
 
Perhaps €275,000 approximately. Your age will mean a reduced term compared to other borrowers.

You may find BoI are willing to lend more (not suggesting that's a good thing). I understand they operate different rules relating to calculating repayment capacity and may offer a longer term.
 
Wanting to know if the amount approved was similar to others with similar circumstances.

Anyway, approval of €170,000 based on 23 year mortgage term. Was surprised but was told that they stress test for a 2% increase in rates and the fact that there are two kids to be reared .

Based on this approval am I right in believing that property prices have a way to go and I am best sitting on my hands for a while longer?
 
tosh100 said:
Based on this approval am I right in believing that property prices have a way to go and I am best sitting on my hands for a while longer?
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Who knows? Your guess is as good as anyone's. We can all speculate till the cows come home.
 
Banks have added 2% to current rates on mortgage lending assessment for years, some choose to ignore of course.
 
I'd have thought that they would have approved you for 250-270k eur but are there not cuts announced in the public sector? There are no safe jobs any more.
 
There must have been some other loading the quote. Your net monthly income would be about 4k a month?
Out of this, they usually require 2k for a couple plus 250 per child. That leaves you with 1500 per month for mortgage payments.
Using http://www.drcalculator.com/mortgage/ie/ to go backwards, over 23 years you get a max of ~215k.
 
I would make the monthly net income higher than 4k, granted there are nuances relating to pensions etc. The approval amount seems low by what we have learned.

We'd appreciate any more detail you can give OP, as it can be hard to get good information on this process, and it's a regular feature of topics here. Do AIB operate exponentially reduced amounts with shorter terms/older applicants?
 
Net monthly income after pension deductions, incl AVCs, is €3,700. Job in the education sector is 100% safe. Perfect credit rating.
 
Ah, I see. Net income is quite a bit lower than our estimates.

That would leave 3700-2500 = 1200 pcm to service a mortgage, which is more or less what you would need to service a €175,000 mortgage at current SVR + 2.0% over 23 years.
 
Thanks for that, will sit on my hands a bit longer. Not too many family homes in my area for €200,000.
Even though BOI may lend a bit more it would be pretty stupid to borrow beyond your repayment capacity.
 
tosh100 said:
Thanks for that, will sit on my hands a bit longer. Not too many family homes in my area for €200,000.
Even though BOI may lend a bit more it would be pretty stupid to borrow beyond your repayment capacity.
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It would, and I applaud you taking a conservative approach. It is easy to take what you can get at any cost and then go running around blaming everyone but yourself if things go awry.

However, think carefully over likely future movements in property prices. Prices may or may not decline further, however even if there are moderate decreases will that bring the type of property you want within reach? You may also find your approval amount shrinking as your own age increases and lending criteria may further tighten. It is hard to know what to do, I'm in a similar boat myself. If you are continuing to save money and building a deposit there may well be no rush for you. But you may need to consider all options (moving area, accepting you may need to rent for the foreseeable, etc)
 
Throwing cat amongst pigeons here - do lenders advance loans for properties which are in Receivership (which they originally appointed) ?

Or, to put it another way, would they deem a new mortgagee a more acceptable/lower risk than the property in receivership?

(If so, banks - in this case AIB - may grant a higher mortgage amount where they've appointed the Receivers?)

*just thinking aloud here and prepared to be shot down*
 
Kildavin said:
Throwing cat amongst pigeons here - do lenders advance loans for properties which are in Receivership (which they originally appointed) ?

Or, to put it another way, would they deem a new mortgagee a more acceptable/lower risk than the property in receivership?

(If so, banks - in this case AIB - may grant a higher mortgage amount where they've appointed the Receivers?)

*just thinking aloud here and prepared to be shot down*
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If I'm understanding you correctly, you're looking at buying a property where the vendor is in receivership? As far as I know the banks don't make any concessions for such a situation and assess the borrower (the buyer) in the normal way and subject to the normal criteria.
 
Just to come back to this thread, many posters (myself included) have often suggested that Bank of Ireland may be willing to lend more than AIB and other banks. This was based on some anecdotal evidence from people going through the process. However, having recently been approved with AIB I also pursued a mortgage with BoI, partly as a back-up option but also out of curiosity as to how much they would lend.

BoI offered over 15% lessthan AIB to me, which I was surprised at. This was a joint application with a single income, and we have one child. From what the advisor said the dependents may well be the factor reducing the approval amount most - perhaps for a working couple BoI may lend more than AIB. However the advice given to families seeking mortgage approval to go to BoI is probably ill-advised. It is AIB who may be the best bet.

It looks like families are at a distinct disadvantage in accessing finance these days.
 
bugler said:
However the advice given to families seeking mortgage approval to go to BoI is probably ill-advised. It is AIB who may be the best bet.
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My experience suggests that UB may be the best (least worst) bet for people with kids.
 
A few days after my initial post I submitted the same details to UB. If I were to reduce my AVC contributions by €200 month I would get €200,000 approval.
 
Based on recent dealings with them, AIB were prepared to lend more than BOI or UB. UB were happy we could cover repayments on the amount in question, but in-house policy wouldn't allow them make a loan offer as we had another property in NE and LTV across both properties exceeded their max, despite only asking for 70% loan on new property. BOI were nowhere near what we needed. Gladly went with AIB in the end.
 
Thanks for the additional feedback. This may be useful to other prospective borrowers in future.
 
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