Declined for Mortgage for 185k. my annual earings are 33k gross.

D

Delmonte

Guest
Hi,
I have recently deen declined for a mortgage with one of the main Irish banks. These are my current stats
I earn 33,000 gross p.a.
I have been in employment for 2 years ( approx).
I recently received a gift of 80,000.
My bank statements show savings 200/mth but also that i have been in my overdraft on a regular basis.
I am purchasing a site subject to planning with the gift money and total costs legal and others will come at a total cost of 30k planning due in the coming weeks.

I am seeking a mortgage of 185,000 and intend to invest the remainder of the gift.
Please advise as to what i should do to put myself in astrong position to get a mortgage and time frame i should work within.

Thanks for you help in advance.

Delmonte
 
Re: Declined for Mortgage

How much is the site costing?

You are asking for a mortgage 6 times your gross income? That seems excessive to me, although I was raised on the expectation of 2.5 times gross salary.

Brendan
 
Re: Declined for Mortgage

Did you only try one bank:? Have you considered trying a broker?
 
Re: Declined for Mortgage

It should be do - able , I earn 30k a year and have just borrowed 186k.
Stop using the overdraft , they dont like that ;) if your not paying any rent at the moment you really should be saving way more a month, 800-1000, this will show your able to pay a mortgage too.
Clear any loans / credit cards.
Try more lenders, brokers, if you get turned down again , ask for the exact reasons why and go from there ...
 
Re: Declined for Mortgage

Thanks for your advice. I'll be taking you up on it. Overdraft dcancelled and savings upped. 6 months healthys statements might push me over the line.
 
Re: Declined for Mortgage

Yes anything like an overdraft will show up on your ICB check. Also, make sure you don't have anything else, like unpaid credit card bills etc.
 
Re: Declined for Mortgage

i have been in my overdraft on a regular basis.
Click to expand...

In the current climate, this will scare off a lot of banks. No matter what you say, they'll just point to your statements and say how do you plan to pay a mortgage if you cant even keep yourself in the black from month to month. You stop using the overdraft or any other sort of short term credit.

My bank statements show savings 200/mth
Click to expand...

How much are the payments on 185k likely to be? They will be a lot higher than 200/mth. You should consider saving an amount equivalent to the mortgage payments to prove that you have enough surplus income to pay the mortgage.
 
Re: Declined for Mortgage

I'm of Brendan's generation (and probably same thought process as well) - you are seeking almost 6 times your gross salary.

Repayments on E185k - over 20 years at say 5% would amount to c. E1,218 per month or 44% of your gross salary...

I think you are proposing to take on too big a committment at this time...

pjmn
 
Re: Declined for Mortgage

You've been declined for a mortgage because you can't afford it. Based on repayments for the amount you are looking to borrow, + utility bills, insurance, refuse charges etc + upkeep, you'll be paying out half your salary on property related costs. You might need to consider using some of the gift to reduce the mortgage amount you are looking for.
 
Re: Declined for Mortgage

pjmn said:
I'm of Brendan's generation (and probably same thought process as well) - you are seeking almost 6 times your gross salary.

Repayments on E185k - over 20 years at say 5% would amount to c. E1,218 per month or 44% of your gross salary...

I think you are proposing to take on too big a committment at this time...

pjmn
Click to expand...


Mortgages now are generally 35 years, my repayments are around 700pm
 
Re: Declined for Mortgage

True - but perhaps the advent of 35 year mortgages are in part to blame for the situation the country now finds itself in - I'd suggest merit in reverting to the old style 20 year mortgage - and if one couldn't afford to pay off a mortgage over 20 years then don't take it on..... just my opinion.
 
Re: Declined for Mortgage

I agree in part , obviously giving a 35 year mortage to someone in their 40's is crazy , I know of people who will be paying their mortgage well into their 70s, thats not something to be looking forward to ....
 
Re: Declined for Mortgage

what is the general rule of thumb in relation to borrowing would it be 3-4 x times your gross salary ?
 
Re: Declined for Mortgage

pjmn said:
True - but perhaps the advent of 35 year mortgages are in part to blame for the situation the country now finds itself in - I'd suggest merit in reverting to the old style 20 year mortgage - and if one couldn't afford to pay off a mortgage over 20 years then don't take it on..... just my opinion.
Click to expand...

If you don't mind me asking, who gave you a mortgage of 6.2 times your salary?

We went for a quick chat with our bank manager the other day, just to get the lay of the land. We've a combined income of €80k, savings of €45k, no loans, clean record, and 5 previous years of mortgage payments, and we were advised of a mortgage of €372k.
 
Re: Declined for Mortgage

In 2007 I had an apartment with outstanding mortgage of E175k. Also an investment property with an interest only loan with E275k outstanding. When I went to borrow E325k to buy another house, I ALSO asked to re-mortgage the investment property up to E445k. These funds (E170k) were to go towards buying the third place and renovating it.

The point here is that I was on a salary of E55k. Total borrowings of E965k. I had to write a letter via the broker to the bank setting out my plans for the E500k additional finance. 24rs later I got the loan offers via fax.

How easy it was to get money then!
 
Re: Declined for Mortgage

Soarer said:
If you don't mind me asking, who gave you a mortgage of 6.2 times your salary?

We went for a quick chat with our bank manager the other day, just to get the lay of the land. We've a combined income of €80k, savings of €45k, no loans, clean record, and 5 previous years of mortgage payments, and we were advised of a mortgage of €372k.
Click to expand...

No one ever gave me a mortgage of 6.2 times salary - what makes you think that I got one?
 
Re: Declined for Mortgage

pjmn said:
No one ever gave me a mortgage of 6.2 times salary - what makes you think that I got one?
Click to expand...

Apologies.
That shoulda been directed at Renter27. Pressed the wrong quote button!
 
Re: Declined for Mortgage

EBS, I also have additional income of around 10k so that may of helped .
 
Re: Declined for Mortgage

hi delmonte

which bank did you go to ? even some of the main banks arent lending .so you should try them all. some times the brokers cant get the rates the bank will offer directly so it is worth going to them all. how long are you looking to take out your mortgage for ?
 
You must log in or register to reply here.
Back
Top