Can a family on an income of €45k ever buy a house?

A

akl

Registered User
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So in a nutshell, I am feeling like we will never own a home. Our family is a single income family by choice with 2 small children. Our income is small <45k gross, and in addition to the rent we currently pay of €600, we manage to save an additional 700-900 a month. We have about 10K in savings right now after saving like this for about a year.

Right now, in our area average house price is about 150k and rising. We are looking to about 110-120k range, when those very rare properties show up. Banks won't lend more than 77k. We have no debt, don't live above our means and clearly show that we can put aside. We are experiencing more landlord issues and it's becoming more and more clear that we are forever at the mercy of our LL. Rents have also shot up and houses are disappearing from the market instantly, with many not making it on daft.

I don't mean to make this a novel, but is this something we should accept and get used to or is there an agency we can appeal to? We've tried a broker, and homechoice loans (still waiting to hear back from the one who still did them), and I plan to apply to the council, but I understand that it will probably not be fruitful.

What say ye?
 
You should apply to the County Council for a home loan. The conditions they set would seem to suit the situation you outline. Although I presume Councils have variables depending their location.

As the conditions for obtaining a Bank mortgage are becoming increasingly difficult, Government should introduce a policy of compelling Councils to up the provision of Home loans.

It worked extremely well in the early 70s (I hate harping back) when "the ordinary citizen" had no hope of getting a Bank mortgage, when banks were mainly interested in farming and business classes only, when the garda, the nurse, the teacher, the secretary, etc were allowed open a bank account but not worthy to be considered for a mortgage.

Everyone of my friends at the time, in a huge variety of employments....middle class...got Co. Council loans for our first homes.

They should become the first port of call now for defined income thresholds rather than the obscure possibility when the humiliation of bank refusals are established.
 
Thanks for your reply, I plan on sending out the application pack this week. I had been looking online, but hadn't been able to find anyone who was successful in applying in recent times. And the one article about it focused on the lack approved applications, but no word on how many applications were received. Honestly, the bleak situation kept us from applying but it seems the only hope now, so fingers crossed!
 
Are the County Councils still giving housing loans?

I thought that this had stopped some years ago?

Brendan
 
It is still going, albeit low approval rates. there is a journal.ie article about some in 2013, but I am not allowed to post links yet.
 
MyHomes mortgage calculator: 120k loan / 6.5% interest (so some stress test in there), 20 year term gives a monthly repayment of €894. A lot less than your managing to put aside (which, to be fair, might not be sustainable).

What reason is given for the low lending amount?
 
We were told the kids and the salary, and partners age (forties). If he earned more, we would get more was the feedback. While the savings is high (I think), we are still living comfortably, and our kids want for nothing. Splurges like new phones may need to wait a few weeks, but it is not difficult. But I understand his pay could be cut , life events, and emergencies come around though.
 
akl said:
Banks won't lend more than 77k.
Click to expand...
Have you tried Ulster Bank? It's two years since I've had dealings with them but at the time they we're the most amenable bank for a single income plus kids mortgage application.
 
Hi akl
We're in a similar position only we have 3 children and 30K in savings and looking for 75K mortgage to buy a 100k house, go figure.. We have tried all the banks without success. I've found that if you fail the banks affordability criteria then that's that- repayment capacity, no debt, proof of comfortable living etc. just doesn't matter. To reiterate michaelm, definitely try UB- I've also found them to be the most amenable at this time. Also, send in an application to your COco, let it run in the backround so to spreak- try and get a local councillor on the case also. Check my thread here where one of the posters said his cousin got one after 8 weeks, they do exist..albeit are rare as hens teeth. Keep saving and keep pluggin' away contacting brokers etc. I'm toying with the idea of approaching the house seller with a rent to buy plan, he's out of the country at the moment tho'. Keep us posted on you progress. Best of luck. J
 
There are minimum hurdles that must be cleared for all those contemplating taking out a new mortgage. These hurdles should not differ amongst the mortgage providers as they relate to CB rules and guidelines. In the cases listed above the hurdle appears to be repayment capacity. No matter what the amount of savings you have a mortgage cannot be granted unless stressed repayment capacity is evident. This can be checked by going on the bank website and entering in your details on the repayment capacity calculator.
 
Have you tried Ulster Bank?
Click to expand...

Funny you say to try them, I originally thought our first broker tried them, but I was wrong. The broker I contacted got back that ulster could offer a much more reasonable mortgage. I'm delighted, but will hold off celebrating just yet until I have a meeting and actual confirmation.




Sad to hear you are going through this as well, but glad to hear we aren't alone! I'll definitely send in the council application, I'm putting all the pots on the fire. And wow, 8 weeks, that must be a record! Hoping you and your family hear good news soon.
 
Got a hold of the application councillor today and found he reckons the average process takes about six months, definitely not a year, he said. Wont know until it's all said and done, but that's better news!
 

I disagree. Repayment capacity is not an issue. akl has a proven repayment 1300-1500pm for a 120K mortgage and i have a RC 1250pm for a 75K mortgage. Both would comfortably pass any stress test. The problem/frustration lies with the criteria the banks are using, bottom line any single earning families with children will find difficulty getting a mortgage despite plenty of evidence that they can afford it.
 
Have to agree with baywindow here, even for a family with two earners it can be difficult to get approval. But I recommend keep plugging away, and keep demonstrating that you have repayment capacity. Some monthly income/expenditure records are very useful, be truthful though.

Good luck!
 
In my excitement over the news, I forgot to update this. Well, we spoke to Ulster bank and we were pre-qualified for 127K, possibly up to 135k!! We are delighted. We're going in later this week to finish the rest of the application to obtain full pre-approval. There is already a house we have our eyes on, worst house in the best neighbourhood type deal (if anyone has any tips with this, I'm all ears!).

Assuming everything goes well with the pre-approval, we will not send in the council application as we are sure we can find a house within that budget. Thanks again for the push and advice and best of luck to everyone else in their hunt.
 
Have followed your thread. I am delighted for you and your family. I hope all goes well for you. Keep up the saving until you get really on top of things financially.
This hopefully will make your Christmas
 
Got Approval in principal from COco today. ( applied in late Oct- so not too long ) Told us to identify/confirm prpery in mind so they can send out their valuer. Fingers crossed..
 
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