Applying for mortgage on my own

N

Nic82

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Hi,

I'm new to this site. I'm hoping to get a mortgage on my own in the next few months. I earn 33k a year. I'm just wondering if anyone has gotten approved for a mortgage on their own recently? I have had appointments with a few banks but they aren't approving me enough. I'm looking for 200k. Has anyone got someone to go guarantor to help them? Any advice would be appreciated. Thanks.
 
What are the banks saying to you? What is the maximum they will lend. 4x salary? Have you a deposit? Proven record of paying rent or saving.

I would say 6x salary not a chance unless you are about to get a large increase in salary. Net income €2,250 repayments €1,250?
 
Nic82 said:
I earn 33k a year...I'm looking for 200k...
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There's no issue with banks giving out mortgages to single applicants at the moment.

Unless there's something about your income that you haven't posted here, the issue is that you're looking for more than you qualify for. If you can post back here the amount you're currently paying in rent each month and also the amount you're saving each month (for at least the last 6 - 9 months) we could give you an idea of a figure you might qualify for.
 
LDFerguson said:
There's no issue with banks giving out mortgages to single applicants at the moment.

Unless there's something about your income that you haven't posted here, the issue is that you're looking for more than you qualify for. If you can post back here the amount you're currently paying in rent each month and also the amount you're saving each month (for at least the last 6 - 9 months) we could give you an idea of a figure you might qualify for.
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Hi Liam - just came across this posting and was thinking about a family member on around the same salary (currently living at home but contributing). If they had 25k deposit and have been saving between contributing to home and actual deposits around 700 per month over a period of time - how much would they qualify for?

Roy
 
onekeano said:
Hi Liam - just came across this posting and was thinking about a family member on around the same salary (currently living at home but contributing). If they had 25k deposit and have been saving between contributing to home and actual deposits around 700 per month over a period of time - how much would they qualify for?

Roy
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Assuming they are single, aged 30 or less, and with no dependents then based off their current repayment capacity they could borrow perhaps €120,000 over 35 years. Perhaps a little more if they could up the savings.

They may want to be careful about the contributions to home - they may not be considered by the bank unless they are standing orders or similar. Doing it by cash isn't ideal.

The OP is looking for far too much - that is boom time borrowing. It is pity that what to lend is still left exclusively up to banks. There are no upper limits set down by law, despite what reckless lending and borrowing did to the country.
 
bugler said:
Assuming they are single, aged 30 or less, and with no dependents then based off their current repayment capacity they could borrow perhaps €120,000 over 35 years. Perhaps a little more if they could up the savings.

They may want to be careful about the contributions to home - they may not be considered by the bank unless they are standing orders or similar. Doing it by cash isn't ideal.
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Hmmm, thanks for the Bugler. Probably an oversight on my behalf that I hadn't thought of the contribution to the home should have been via standing order etc - I will suggest that going forward.

As a matter of interest the amount borrowed ie. €120k as per your note, if she wanted to go go a shorter term (which I would be recommending like 20 years) would the overall amount remain the same or would that be reduced? To be honest I was thinking of her using the rent a room scheme for a few years to ease the burden but also she would be paying a reasonable amount off the capital as opposed to a 35 year loan?

Roy
 
Shortening the term will reduce the borrowing capacity, as the net effect is higher monthly repayments which the borrower will not have shown they could make on a €120,000, for example. I am not sure any lender takes rent a room into account anymore.

If proceeding with the mortage the best plan would be to borrow over the 35 but overpay the mortgage, that is in effect shortening the term but without the downside on the application.

I feel for lower income single earners in particular. The country is set up to promote high property prices, our media and government effectively tell us high prices are a good thing.
 
ok thx Bugler - yes I agree the prepayments option would effectively be the same in terms of shortening the life of the loan and taking more capital off in early years - thanks

Roy
 
LDFerguson said:
There's no issue with banks giving out mortgages to single applicants at the moment.

Unless there's something about your income that you haven't posted here, the issue is that you're looking for more than you qualify for. If you can post back here the amount you're currently paying in rent each month and also the amount you're saving each month (for at least the last 6 - 9 months) we could give you an idea of a figure you might qualify for.
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Hi sorry only seeing this now. I'm back living at home due to a relationship break up, I only pay 50 euro a week in order to save for my own place. I have no debts. In total I am saving 185 a week and I have 25k savings. Thanks.
 
Joe_90 said:
What are the banks saying to you? What is the maximum they will lend. 4x salary? Have you a deposit? Proven record of paying rent or saving.

I would say 6x salary not a chance unless you are about to get a large increase in salary. Net income €2,250 repayments €1,250?
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Two banks have said I'd only qualify for 138k on my own. Yes I have a deposit. Full record of saving also. Net monthly income is 1920e, mortgage repayments over 35 years would be roughly 900 I was told.
 
Bronte said:
Based on the little you've posted my advice is you're looking for too much and stay away from guarantor's.
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Some people mightn't have any choice other than to get someone to go guarantor though?
 
I'm assuming that you can show a history of paying €50 per week rent and €185 per week savings through your bank accounts. If you pay cash at home, that won't be taken into account as it can't be proven.

Banks stress test repayments, calculating at 6% + interest to see how you will fare if/when interest rates rise. €140,000 x 35 years at 6% = €800 per month, which is nearly 42% of your net income.

I'd say the figure you've been given of €138,000 is as much as you're likely to qualify for - a bit on the optimistic side if anything.
 
Bronte said:
Then how can you afford a mortgage of 200K
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If I was to get a mortgage I would no longer be paying the 50 rent at home so that would bring my savings up to 235 a week which would pay towards the mortgage and my boyfriend will be living with me and paying towards it also? I have 25k in savings.
 
LDFerguson said:
I'm assuming that you can show a history of paying €50 per week rent and €185 per week savings through your bank accounts. If you pay cash at home, that won't be taken into account as it can't be proven.

Banks stress test repayments, calculating at 6% + interest to see how you will fare if/when interest rates rise. €140,000 x 35 years at 6% = €800 per month, which is nearly 42% of your net income.

I'd say the figure you've been given of €138,000 is as much as you're likely to qualify for - a bit on the optimistic side if anything.
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Yes these are all shown on my bank account. Maybe if my mother was to go guarantor this might help?
 
Nic82 said:
Yes these are all shown on my bank account. Maybe if my mother was to go guarantor this might help?
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I'm very wary of guarantor arrangements unless there is a very real and credible reason to believe that your income is going to increase substantially in the next few years. Current criteria state that you can afford around €130,000+ based on the figures you've posted here. If you borrow more than this, that's not really "helping" you.

If your mother has substantial income or unencumbered assets of her own, she might qualify as a guarantor and might enable you to get a larger mortgage. But if so, you're lumbering your mother with the responsibility that if you cannot repay your mortgage (for reasons that perhaps you don't anticipate now, e.g. you lose your job, you become ill and cannot work etc.) the bank can come after your mother to honour her guarantee and pay your debts.

If you can borrow €138,000 and have €25,000 in savings then you have enough to buy a property now for €150,000 or more, without involving your mother or taking on a bigger debt than you qualify for.
 
Nic82 said:
If I was to get a mortgage I would no longer be paying the 50 rent at home so that would bring my savings up to 235 a week which would pay towards the mortgage and my boyfriend will be living with me and paying towards it also? I have 25k in savings.
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If the boyfriend is going to be contributing to the mortgage you'll need to make sure that both he and you regard it as rent so that he doesn't have a claim on the house should you split up.

There have been a gazillion threads on this before, there have also been a gazillion threads about parents going guarantor for their kids and instead of having a happy and fulfilling retirement are having to sell their houses to bail out the child they went guarantor for, if you value your parents you will not allow them go guarantor on your mortgage.
 
Nic82 said:
Two banks have said I'd only qualify for 138k on my own. Yes I have a deposit. Full record of saving also. Net monthly income is 1920e, mortgage repayments over 35 years would be roughly 900 I was told.
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Hi Nic, can you say what banks told you this and what their rates were? The reason I ask is that on both BOI and AIB sites a mortage of 138k over 35 years at todays rates would cost you approx 650 euro, not almost 900.
 
LDFerguson said:
I'm very wary of guarantor arrangements unless there is a very real and credible reason to believe that your income is going to increase substantially in the next few years. Current criteria state that you can afford around €130,000+ based on the figures you've posted here. If you borrow more than this, that's not really "helping" you.

If your mother has substantial income or unencumbered assets of her own, she might qualify as a guarantor and might enable you to get a larger mortgage. But if so, you're lumbering your mother with the responsibility that if you cannot repay your mortgage (for reasons that perhaps you don't anticipate now, e.g. you lose your job, you become ill and cannot work etc.) the bank can come after your mother to honour her guarantee and pay your debts.

If you can borrow €138,000 and have €25,000 in savings then you have enough to buy a property now for €150,000 or more, without involving your mother or taking on a bigger debt than you qualify for.
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I am a civil servant and there is no chance of my income increasing substantially. My mother has a house that the mortgage is cleared on. There is no properties in my area for 150k it would mean I would have to relocate which is no an option for me unfortunately. If she was to go guarantor can her name be removed from this in a couple of years?
 
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