Quickest way to apply for mortgage

A property has just been advertised and will be auctioned in 2wks time. We are interested but have not applied for a mortgage and would like to know:

• Is it possible to get a mortgage approved within say 10 working days?
• Would it be quicker to use a broker or go directly to the banks.
• The property has an AMV of €350k, but may sell for more than this at auction. Will the bank just approve the AMV or would they approve more for the purchase price (say €375k)
• Preference is to renovate/extend the property straight away but we guesstimate another €100k is needed. Would the bank approve this in the mortgage (say €475k). If this was not viable we could also sit it out for a few years to save towards the renovations.
• We would want a 90% mortgage (say either €337k or €428k), open to fixed / variable options.

I will post financial info separately

Is this a single or joint application: Joint
Type of Property: 4 bed detached
Value of Property: AMV €350k
Amount of Mortgage: 90%
Term of Mortgage: would look at 25yrs or 30yrs

Gross income: €90,000 / €71,000
Net income: circa €4300 / €3600 per month (roughly, need to check exact amounts)
Amount of savings and over how many years: €110k over 3-4 yrs, generally save €30k per annum
Is there a lump sum from any other source? If so give full details: no
Age of Applicants: 34 / 35
Employment situation. both private sector PAYE
How long are you in current position and are you permanent. 9yrs / 11 yrs
Have you any children: 1 infant

Have you any court orders or Judgements: no
Have you any other loans and if so full details of amount/period/% rate and repayment amounts: no
Cr. Card situation: €1k will clear this week, usually clear each month.
Have any of your existing loan or credit card monthly repayments been paid late over the past twelve months, even if you made the repayment in full a few days later? If so, how many times in the past twelve months?: no
Any previous negative Cr. history by either applicant: none
Are your savings and rent clearly visible and identified as such in your bank accounts each month: yes
Have you gone over your overdraft limit in the past six months, even if only for a day or two? If so, how many times in the past six months? no
If you have been refused a mortgage please give exact reason of why and address why you think you should not have been: not applicable. see original post. would like to know if qualify for mortgage value up to €475k and quickest way to go about getting this.
Did you use a Mortgage broker or are you applying directly?: open to options, see original post.

Any other relevant information.
wife currently on fully paid maternity leave. returns to work in August.
wife owns property in own name bought prior to marriage. Mortgage outstanding €215k, Value say €115k, Tracker ECB +1.25%, €950 monthly payment. Aim to keep and rent out for say €750pm
husband owns property with sibling bought prior to marriage. Mortgage outstanding €240k, Value say €190k, Tracker ECB + 1.15%, €950 monthly payment, rented at €800pm so pays €75pm. PRTB, Taxes etc above board.
What reason has the bank given to you for refusing you? not applicable
Have you checked your ICB record to make sure it's clean?: not yet, assume clean
Which bank(s) have you applied to? open to options, see original post.

Before applying for a mortgage remember you will have a lot of other expenses associated with moving into a house such as furnishing it/repairs/mortgage protection policy/house insurance/property tax/new telecommunications charge/new water charge/possibility a management co charge as well as the usual utilities fees. Also stamp duty, legal fees for a solicitor, bank valuer's fee, engineer's report: Yes have savings to cover

wife currently on fully paid maternity leave. returns to work in August.
wife owns property in own name bought prior to marriage. Mortgage outstanding €215k, Value say €115k, Tracker ECB +1.25%, €950 monthly payment. Aim to keep and rent out for say €750pm
husband owns property with sibling bought prior to marriage. Mortgage outstanding €240k, Value say €190k, Tracker ECB + 1.15%, €950 monthly payment, rented at €800pm so pays €75pm. PRTB, Taxes etc above board.

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With €450k in mortgages already, it's unlikely that they will give you more.
It would certainly take more than two weeks to get approval.

You have to forget about bidding for this house at auction. Don't waste money on getting a survey and the title deeds checked.

Maybe go to the auction to see if it's not sold. Then you can negotiate privately in the following days.

Who are the mortgages with? All the main banks now allow borrowers to port their trackers to a new property, although at a higher rate. You should investigate this angle.

If you are with one of the lenders who don't, you might get a deal to pay it off early.

blueblue said:

Is it possible to get a mortgage approved within say 10 working days?
.

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This is a bad way to approach this project. Panic already, no mortgage application, 2 negative equity mortgages, no legal title checked, no survey done etc.

And you don't understand that you would need mortgage approval of the amount the property will actually sell for not it's AMV. Have you been to an auction. That is your starting point.

In relation to banks and auctions, you would want to be more than 500% clear that there is absolutely nothing wrong with the title before you could bid at auction. This does not apply to cash buyers, nor to those who are willing to take risks. Most of the properties at the auctions will be fine, but it is well known that the auction is the place to sell the dodgy property with title or planning problems. Beware.

Is this property liveable in, where are you currently staying?

You didn't ask, but how about sorting out the issue of husband owing property with sibling? It's all very messy.

husband owns property with sibling bought prior to marriage. Mortgage outstanding €240k, Value say €190k, Tracker ECB + 1.15%, €950 monthly payment, rented at €800pm so pays €75pm. PRTB, Taxes etc above board.

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Bronte said:

You didn't ask, but how about sorting out the issue of husband owing property with sibling? .

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Very good point.

This is the type of thing you need to sort out long before you even consider applying for a mortgage to buy a home. Your husband should seek to have his name removed from the title deeds and the mortgage.

Brendan

Maybe go to the auction to see if it's not sold. Then you can negotiate privately in the following days.

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Agreed.

Who are the mortgages with?

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EBS & PTSB

All the main banks now allow borrowers to port their trackers to a new property, although at a higher rate. You should investigate this angle.

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Presume this only applies if we sell say wife's property and bring negative equity to new mortgage?

Maybe go to the auction to see if it's not sold. Then you can negotiate privately in the following days.

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This assumes we would get a suitable mortgage. Which returns to the OP....is quickest way to get mortgage approval by using a broker or dealing directly with banks

The property owned with the in-law may not be a problem. Perhaps they both see it as a joint investment which they're both happy with.

That said, I agree fully that two weeks is not enough time to prepare to bid at auction. It might be possible to get mortgage approval in that period of time if you have all your bank and mortgage statements, payslips etc., filed away and are prepared to pay for couriers to get them dropped into a bank's head office (or do it yourself if that's practical).

But you'd still need to be absolutely sure that the legal title is 100% and you'd need to get detailed estimates of the cost of refurbishment / repair.

From a mortgage approval perspective, the two existing houses will be a significant drag on your assessable income. Banks always "stress-test" the mortgage repayment - add at least 2% to the interest rate and discount the rental income to account for tax on rent, repairs, ongoing costs etc. Most banks will assess your husband on the full mortgage with his sibling - not just half.

The timing seems suspect to me - from your original post you say that the property has just been advertised and is going to auction in two weeks' time. This would lead me to think that Bronte is correct - that there may well be issues of some sort with the property and that the auction is being set with an unrealistic lead-in time in the hope that someone will panic-buy and miss the issue.

My advice would be to forget this property. If you're keen to move, then arrange mortgage approval at your leisure first. Then start looking.

This is a bad way to approach this project. Panic already, no mortgage application, 2 negative equity mortgages, no legal title checked, no survey done etc.

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Not panicked, simply asking questions!
Agreed no mortgage application made, thus reason for OP!
Legal title and survey can be addressed. Have already investigated timescales but no point advancing further if finance is unlikely.

And you don't understand that you would need mortgage approval of the amount the property will actually sell for not it's AMV.

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I do get this. See OP whereby example of say our maximum bid would be €375k. Therefore mortgage required is €375k x 90% = €338k. EXAMPLE ONLY!!

In relation to banks and auctions, you would want to be more than 500% clear that there is absolutely nothing wrong with the title before you could bid at auction.

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Agreed.

Is this property liveable in, where are you currently staying?

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Yes new property is liveable in, but old and cold!
Currently reside in wife's property.

The property owned with the in-law may not be a problem. Perhaps they both see it as a joint investment which they're both happy with.

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Correct.

That said, I agree fully that two weeks is not enough time to prepare to bid at auction. It might be possible to get mortgage approval in that period of time if you have all your bank and mortgage statements, payslips etc., filed away and are prepared to pay for couriers to get them dropped into a bank's head office (or do it yourself if that's practical).

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Info I was looking for. Thanks!

But you'd still need to be absolutely sure that the legal title is 100% and you'd need to get detailed estimates of the cost of refurbishment / repair.

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Properties we tend to be attracted to need "modernisation". How likely is it to obtain mortgage in excess of purchase price to allow for repairs etc. Assume quotes are provided.

From a mortgage approval perspective, the two existing houses will be a significant drag on your assessable income. Banks always "stress-test" the mortgage repayment - add at least 2% to the interest rate and discount the rental income to account for tax on rent, repairs, ongoing costs etc. Most banks will assess your husband on the full mortgage with his sibling - not just half.

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Info I was looking for. Thanks!

The timing seems suspect to me - from your original post you say that the property has just been advertised and is going to auction in two weeks' time. This would lead me to think that Bronte is correct - that there may well be issues of some sort with the property and that the auction is being set with an unrealistic lead-in time in the hope that someone will panic-buy and miss the issue.

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Had the same thoughts. Seems to be limiting the market to me. Cash buyers would need to access funds...may have fixed term or notice deposit accounts. Mortgage buyers need time to get all their ducks in a row.

My advice would be to forget this property. If you're keen to move, then arrange mortgage approval at your leisure first. Then start looking.

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Coming to that conclusion myself!

You currently reside in your wife's property .

That is good news as portable trackers are restricted to home loans .

So stay in your wife's property and apply to EBS for a portable tracker .

€215k, Value say €115k,

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If you want to buy a property for say €415k, you will need an additional €300k.


This could be attractive to EBS as it gets rid of the negative equity and increases the margin on the tracker.

AIB will be launching their product in the next few weeks. Another reason not to bother with this house.

AIB announcement: allowing to move with tracker

I ran some calculations using the criteria of one lender and came up with a result that you would qualify for a new mortgage of around €350,000 using the details that you gave in post #2. This would assume that the salaries shown are your basic salaries, good credit and savings records etc. As I say, that's just one lender - others might differ. But it gives you an idea of your starting point.

Lenders have different attitudes to giving out money for renovations - a typical example would be maximum 90% of purchase price and 90% of renovation cost provided that final loan does not exceed 90% of final value. Written estimates of renovation works would be required at the start and money for renovations would be released in stages as the work progresses.

Total loan (including renovation piece) still has to remain within lender's criteria re affordability. So if your maximum overall loan is €350,000 based on affordability and you need to borrow €70,000 towards the renovations, then you'd be borrowing €280,000 for the purchase.

Cash buyers would need to access funds...may have fixed term or notice deposit accounts.

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True, but a cash buyer only needs to put down the contract deposit at the day of the auction. The balance of the money would come at closing which might leave them time to serve out whatever notice period they might have on the accounts. Alternatively you can often break out of a fixed rate deposit by paying a penalty.

Thanks for the info Brendan.

On a tangent:
With regard to the portable tracker mortgages, is it possible to get the non-tracker element fixed.....isn't there a risk that any benefit gained by the tracker is eroded due to a SVR that can be set at an ever increasing rate by bank.

LDFerguson,

Many thanks for running the numbers and the info provided. Your hitting exactly the info I was looking for.

Agreed re: cash buyers.

If for pig-iron and curiosity's sake I was to try and pursue mortgage approval within the next two(ish) weeks would you recommend using a broker or applying to the banks directly?

Thoughts being, if the auction does not result in a sale I'd be interested in being in a position to make a private treaty offer in the days/weeks afterwards. Therefore a quick turnaround on mortgage approvals is still required.

In any event I don't see anything to lose in pursuing this: If it comes off so be it and if it doesn't we simply know for certain what we can or can't achieve in terms of mortgage borrowings at the moment and can plan around this.

blueblue said:

Thanks for the info Brendan.

On a tangent:
With regard to the portable tracker mortgages, is it possible to get the non-tracker element fixed.....isn't there a risk that any benefit gained by the tracker is eroded due to a SVR that can be set at an ever increasing rate by bank.

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Which would you prefer

A) 415k @SVR
or
B) 215k@tracker
+ 200k @SVR

It should be clear that it is B you want.

You may make a choice to fix the €200k part, but, under no circumstances, should you fix the tracker bit.

blueblue said:

If for pig-iron and curiosity's sake I was to try and pursue mortgage approval within the next two(ish) weeks would you recommend using a broker or applying to the banks directly?

Thoughts being, if the auction does not result in a sale I'd be interested in being in a position to make a private treaty offer in the days/weeks afterwards. Therefore a quick turnaround on mortgage approvals is still required.

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You don't have time to deal with the banks yourself if you want a quick turnaround so you need a broker. So that you know LD Ferguson is a broker.

On the other hand, if buying after auction, then it's just a normal sale.

*


Thought I should come back and say thanks for the tip Bronte!

LDFerguson was open and 'to the point' which I like. Very helpful. However we did not pursue this property further.