exemption on loan to income

J

john keating

Registered User
Messages
15
hello all

me and my partner want to buy a house. we want to apply with my partner only.
does anybody know about criteria for
an exemption? will the bank consider one for a good ltv(57%)

house price--------------375k
less deposit-------------160k (includes 18750 first time buyers help to buy)
mortgage needed-------215k (57% ltv)

partners salary----------47500
partners bonus----------5100 not guaranteed

my partner has 35k in savings. with rest of deposit coming from a gift.

thank you for any advice

john
 
She wants to borrow €215k based on a
Salary of €47,500 = 4.5 times
Package of €98,500 = 2 times.

I think that the banks would be delighted to make an exemption for this.But they don't publish their guidelines, so the only way to know is to ask.

Brendan
 
Brendan Burgess said:
She wants to borrow €215k based on a
Salary of €47,500 = 4.5 times
Package of €98,500 = 2 times.

I think that the banks would be delighted to make an exemption for this.But they don't publish their guidelines, so the only way to know is to ask.

Brendan
Click to expand...

Hi Brendan,

They might, but my fear is that they might not.

The bonus seems to be €5,100 rather than €51,000, but in any event 4.5 times is within the "exemption corridor" of 3.5 to 5.0.

The issue as I see it is that there's less in it for the bank at this sort of level; in my experience they're quite cynical about the exemptions and tend to give them to people with great career prospects, people with bigger (and thus more profitable) mortages, and people to whom they may be able to sell ancillary products.

Gordon
 
The first criteria for the exemption is you must have identified the property. Banks won't give exemptions without it.

Your disposable income after the payments of debts must be +25% the required about ie if the basic requirement is €1,500, you need €1,875.
You have to show that you have the ability to repay the mortgage if rates increased by 2%. Your must satisfy this requirement 100%
Clean ICB


Steven
www.bluewaterfp.ie
 
hello brendan/steven/gordon

thanks for your replies

property is identified----------------------375k
mortgage required-------------------------215k
monthly payment at 3.5%----------------970

partners nett income-----------------------2650 monthly
currently saving ----------------------------1000 monthly(recently upped to 1250 just 1 month though)
rental payment-------------------------------250 monthly
car payment----------------------------------220 monthly(car loan to be cleared in full)


does this show adequate payment capacity and expendable income to satisfy the bank do you think?

my partners credit history is 100%. loans and credit card always payed on time
 
Yes, it does. The €970 stress-tested by 2% would still be less than your savings plus rent plus loan repayment.

It's all about getting an exemption which, notwithstanding my earlier pessimism, I'd be hopeful around.
 
Gordon Gekko said:
Yes, it does. The €970 stress-tested by 2% would still be less than your savings plus rent plus loan repayment.

It's all about getting an exemption which, notwithstanding my earlier pessimism, I'd be hopeful around.
Click to expand...
Thanks Gordon

Would you suggest using a broker in this situation? Do you know which banks are more likely to give exemptions? She banks with Ulster has all her life. Would they be more likely to do it given her history with them.

Thanks for your advice
 
john keating said:
Thanks Gordon

Would you suggest using a broker in this situation? Do you know which banks are more likely to give exemptions? She banks with Ulster has all her life. Would they be more likely to do it given her history with them.

Thanks for your advice
Click to expand...

I would actually. I think brokers add real value when there's nuance to an application.
 
Gordon Gekko said:
I would actually. I think brokers add real value when there's nuance to an application.
Click to expand...
thanks gordon. is there any issue with the gift portion of the deposit coming directly from me? what is the best way of handling this? it will be in the region
of 100k.
 
That would create a tax problem, no?

(I'm assuming that by "partner" you mean that you're not married).
 
Gordon Gekko said:
That would create a tax problem, no?

(I'm assuming that by "partner" you mean that you're not married).
Click to expand...

no we are not married. and it will definitely be liable for cat tax. im just wondering do banks
have any issue with the gift coming from a 'friend' and not a family member?
 
thank you for your replies. bank are happy to give exemption but need the gift to come from a family member!! anybody no how i would do this
without getting completely crucified on tax. can a family member sign gift letter but the money when transfered it would come from me to my partner
with a legal agreement between me and my partner as to what the money is for? would there be any implication for the family member who would sign the letter
if the money didnt come from them?

thanks
 
I take it that you are a second time buyer and thus would make the application ineligible for the first time buyers help to buy scheme? Otherwise I don't see why you would not make a joint application with your partner and avoid the tax implications.

I would imagine that the bank would need to see the funds come from the gift giver.
 
Just get a family member to appear to provide the loan, when in reality it comes from your partner.

Banks never cease to amaze me with their made up rules.
 
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