Will I get a mortgage approval?

  • Thread starter Mr Bojangle
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Mr Bojangle

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Hi all,

Just wondering what the consensus here would be on my likelihood of being able to get a mortgage, facts are as follows:

Self: Civil Servant (permanent full-time): 36k p.a. gross (increments of 3k p.a. (hopefully!) over the next few years - is this relevant, do any of the banks still factor in the payscale for civil servants).

Partner: Public sector (contract, part-time) 13.5k p.a. gross

We are currently renting, paying 600 p.m., no real savings worth talking about. I'm paying c.220 p.m. on car loan with about 20 months to run.

Deposit will be primarily funded by way of support from parents (otherwise we'd be another few years saving for it), of 12k - 15k.

Looking at paying between 115k - 150k to get "on the ladder", preferably before mortgage interest relief is removed in 2012...

Given that we have no savings record to speak of, will we be able to get a mortgage on the basis that our mortgage payment would be (possibly substantially) less than the level of rents we have been paying for several years now...?

Any advice most welcome... thanks
 
I'd imagine you'd need a 20% deposit. 20% of 150K is 30K. There is a big gap between a purchase price of 115 to 150K?

Why have you no savings? That's not a good way to start out. Also do you really think it's a good idea to take the money from your parents because you are not willing to save? What exactly is wrong with saving for a few years?

Are you married?

In relation to mortgage interest relief, why do you think you should get on the ladder before this is abolished?
 
Given that we have no savings record to speak of, will we be able to get a mortgage on the basis that our mortgage payment would be (possibly substantially) less than the level of rents we have been paying for several years now...?

Any advice most welcome... thanks

No, it is essential to have some level of savings to prove financial competence.

Plus your wife's salary will not be taken into account as she is not full time.

Save as much as you can for the next 6 months and have a look again.
 
I'd imagine you'd need a 20% deposit. 20% of 150K is 30K. There is a big gap between a purchase price of 115 to 150K

The reason for the gap as mentioned is that the preference is for a 3-bed semi, with a view to staying there long term and having kids, but would settle for a townhouse for a few years if that is unattainable.

Why have you no savings? That's not a good way to start out. Also do you really think it's a good idea to take the money from your parents because you are not willing to save? What exactly is wrong with saving for a few years?

Why are you answering my questions with questions? Ones that are irrelevant in the context of the question I asked for an answer to? but I'll indulge your nosiness -
No savings for a variety of reasons, primarily because I worked for a pittance for years while training, and in 2007-09 we each had little spells of unemployment - only earning at a level that allows me to save a few quid, as of last year. We're in our late 20's and understandably neither us nor our parents wanted us under their feet at home so we've been renting for the last 5 years - not very easy to save when you're giving a landlord the same / more than you would be paying to buy the house yourself... So while there aren't NO savings, they're just nowhere near enough for a deposit, and not accumulating very fast.

As for my parents, I think its a great idea to accept a loan of money (again not that it's anyone's business whether they loan or gift it to us) from them to save us from handing 7k a year in rent to landlords for another 5 years while we try to accumulate enough money for a deposit. Their idea, not ours, as they have an aversion to "throwing away money" on rent...

Are you married?
No, are you?

In relation to mortgage interest relief, why do you think you should get on the ladder before this is abolished?
Because it's worth a substantial amount of money - I'm talking about mortgage TRS here. If I'm likely to buy next year at a similar price to this year, I might as well try to get in there 6 months earlier and get the benefit of the tax relief - over the first couple of years of a mortgage of the kind of size I'm talking about, it's worth c.€100p.m.
 
No savings for a variety of reasons, primarily because I worked for a pittance for years while training, and in 2007-09 we each had little spells of unemployment - only earning at a level that allows me to save a few quid, as of last year. We're in our late 20's and understandably neither us nor our parents wanted us under their feet at home so we've been renting for the last 5 years - not very easy to save when you're giving a landlord the same / more than you would be paying to buy the house yourself... So while there aren't NO savings, they're just nowhere near enough for a deposit, and not accumulating very fast.

As for my parents, I think its a great idea to accept a loan of money (again not that it's anyone's business whether they loan or gift it to us) from them to save us from handing 7k a year in rent to landlords for another 5 years while we try to accumulate enough money for a deposit. Their idea, not ours, as they have an aversion to "throwing away money" on rent...

People are trying to understand your situation better in order to give better advice. Having no savings might indicate that you can barely make it through until end of month (I am not saying you are), never mind take up a long-term mortgage repayment responsibility.
Banks require you put your own money towards a house purchase for various reasons. They want to see that the money is coming from savings, not some loan from some one else (Parents, CU, whatever) as this would just increase monthly outgoings. Also, regular savings ability means that you have some budgeting ability - which you will need when you buy a house, as there are many additional costs than just the mortgage (insurance, repairs and maintenance, interior, furniture, etc) - many things you don't have to care about when renting.
I don't understand your "throwing your money away on rent" - it is the same as saying a mortgage is throwing money away on interest. I assume you are getting some value for your rent, that is, a nice place to live that you are happy with, plus the flexibility rented accommodation provides - if this is not the case, rent somewhere else.
 
As for my parents, I think its a great idea to accept a loan of money (again not that it's anyone's business whether they loan or gift it to us)

Open to correction on this from anyone, but as far as I know it is the banks business as they will request confirmation that it is a gift and that it does not have to be repaid.
 
Open to correction on this from anyone, but as far as I know it is the banks business as they will request confirmation that it is a gift and that it does not have to be repaid.

The bank might ask where the money is suddenly coming from, and if there is repayments associated with it as it will impact affordability of the mortgage.
If it is a "gift" from the parents, I wonder if there would be any tax implications?
 
Not sure if I am reading this right:

Up to €332,084 is exempt from tax when given to son/daughter?
 
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The questions I asked were pertinent to us giving you correct advice. The 'facts' you originally posted were not all the facts. The fact of you being unmarried is also very important but as you don't like my questions I'll leave it to someone else to tell you why.
 
Can I ask - what's the rush?????? You're in your late 20's from your posts I can take it you have had spells of unemployment - so therefore you are in a relatively stable period at the moment with both of you working. If I were you I'd focus on paying off loan, and then getting some savings together. The reality is the price of houses is falling and the more you can put to a deposit the smaller your mortgage will be....

As a "homeowner" I can tell you there are huge benefits to renting!!!! So don't knock it!!!!
P..
 
can i ask - what's the rush?????? You're in your late 20's from your posts i can take it you have had spells of unemployment - so therefore you are in a relatively stable period at the moment with both of you working. If i were you i'd focus on paying off loan, and then getting some savings together. The reality is the price of houses is falling and the more you can put to a deposit the smaller your mortgage will be....

As a "homeowner" i can tell you there are huge benefits to renting!!!! So don't knock it!!!!
P..

+1
 
Would you look into the 'Rent to Buy' schemes? I am currently involved in one, i pay rent every month, and after 2 years 50% of this is returned to me as a deposit. This reduces the maount that i need to put towards a mortgage, and is giving me ample time to clear off ALL my debts and get myself into a suitable position. Iknow the RTB schemes are fairly new, and there is a mixed reaction, but it could allow you to move into your own home whilst giving you a good chance to save towards your deposit.

Regarding parents giving you a 'loan' of a deposit - the banks will not accept this under any circumstances. Even if they were to gift it to you and confirm in writing it did not need to be paid back, you would still have to show that you have been in a position to save/budget on top of your rent for a good while (the fact I am clearing off my debts by vastly overpaying counts as this).

Remember it is a huge committment to make, take your time and find what is right for you.....

Floss.
 
Mr Bojangle will you please followup and post if you get mortgage approval and from which banks please?
 
The questions I asked were pertinent to us giving you correct advice. The 'facts' you originally posted were not all the facts. The fact of you being unmarried is also very important but as you don't like my questions I'll leave it to someone else to tell you why.

The bank will not take your partners income into account as he/she is not in permanent employment. If you applied on your own you may be approved for a larger amount than you would have if you applied together. If you were married your partner would be considered your dependent (an expense). As you are not it would be possible for them just to take your numbers into account.

The questions asked here are usually in order to give you better advice.

You would be best to stay where you are until your partner finds permanent employment and save whatever you can however little. Perhaps even accept the loan from your parents in drips and drabs until you finally apply.

Best of luck with the application.
 
Hi OP

Youll need to have a deposit and prove how you saved it up. I transferred my deposit into a new account a year ago and Ulster Bank queried why the account only started a year ago.

The surveyer of my house said it needed work ( cosmetic which was a bit odd anyway) and the bank said I had to get a quote and show the bank I had enough money to cover it

So Id recommend saving as much as you can each month , also have a record of rent paid so you can show you can afford repayments
 
Prices appear low. It must be tempting to anyone renting. If they can borrow.

In the neighbourhood I live in - 3 miles from Dublin City Centre. Quiet residential spot. Lots of old people. My house - I purchased in 2002(?) for IR£150k. Let's say €190k. It was a connected purchase but even so market value was appropriately established.

At the height of the boom, an architect, who had put an extension on the rear of one of these houses, declined an offer of €430k.

Now, a house down the road, in need of some work, just sold for €135k. I'll let you draw your own conclusions from that.

The houses have always let for €800 plus per month. I'm a bit perplexed as I haven't seen similar declines in most areas. Maybe because the owners have been there a long time and aren't sitting on hefty mortgages. Not seeing the drop in the wider commuter belt.
 
hi bojanles just read your thread and was wondering did you get approval in the end. I'm in a pretty similar position to yourself and any feedback would be appreciated. thanks.
 
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