Getting a credit union loan

Hi,

Help! We just got refused for a 100% mortgage as we have not yet been working for a full year after coming back from travelling.

Am with Drumcondra Credit Union. Boyf is with Blessington CU.

We need a deposit of €35,000 minimum for a house (maybe €45,000 if we go second hand).

At the moment, we have €5,000 savings and will be gifted €10,000 from our parents - total €15,000.

This leaves us with a shortfall of €20,000 at least (and that's not paying for furniture).

Problem is that I lodged €10pw for 12wks and then never set up a standing order. This was 5 months ago. Bal €120.

He lodged €50 to open the account and then stopped.

So we have no savings record.

Is it in any way possible that we could lodge a lump sum and borrow? Does anyone know what these CUs are like?? We would be paying it off as quickly as possible to avoid paying through the nose.

Thanks in advance!

Sun

A deposit of €35-€45K implies, assuming a 10% deposit, a house in the €350-€450K bracket and based on your seeming difficulty in coming up with the deposit even with a helping hand perhaps you are aiming too high and need to shop around for something more affordable? I doubt that the CU will allow you to borrow based on a lump sum lodgement but, even if they did, where are you going to get this in any case?

Sorry - I meant €45,000 if we include the stamp duty associated with a 2nd hand house.

Our difficulty isn't in repaying. We actually cleared 10,000 worth of loans in the first six months of the year, hence the shortfall in deposit.

We have been offered a mortgage of €372,000 at 92% so we're actually holding back a bit (or so we thought!) - we're just scuppered by the 100% thing!

sun_sparks said:

Sorry - I meant €45,000 if we include the stamp duty associated with a 2nd hand house.

Our difficulty isn't in repaying. We actually cleared 10,000 worth of loans in the first six months of the year, hence the shortfall in deposit.

We have been offered a mortgage of €372,000 at 92% so we're actually holding back a bit (or so we thought!) - we're just scuppered by the 100% thing!

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is there no chance of getting a cheaper house , (below stamp duty limit)

did the bank say why you where rejected ? (credit history/work history..etc..)

work history - simple as that. In fairness to our broker, he pushed, but he got nowhere. It wasn't a huge surprise, but we're a little disappointed now. Two brokers had told us they should be able to swing it - salary was fine and we had 3 years employment in the same industries we're working in now before we went away. But it just didn't happen.

We're looking at cheaper houses, but you know yourself, there aren't many (certainly not in Lucan where we're buying) under the SD limit.

Bear in mind we do have €15,000 to lodge with the CU if necessary. (But I wouldn't like to lodge ALL of our money!)

But is it not the case that you can't withdraw from a CU when you have an outstanding loan greater than the amount you have on deposit?

So if you lodge €15k, you'd have to borrow the entire €45k, rather than just the €30k difference between the €15k you already have and the €45k you need.

Sounds like a crazy notion to me.

At the rate of saving/paying off loans you've achieved already this year, why not just keep saving?

On the numbers you've quoted - 92% loan of €372k + €45 further borrowing - you'd be straight into negative equity....and that's before the fall in property values that is going to happen one of these days.

Is there a particular urgency to buy?

While I'm not going down the 'property crash' arguement there's no denying property inflation has been slowing down dramatically so I'd suggest there's no hurry to get in such debt at such short notice.

Perhaps saving for another year or two would be a good option?

Sun Sparks
Go talk to the manager of your CU and explain the situation. Bring documentary evidence of your mortgage approval and your earnings. They will not be keen to lend the balance on a mortgage but you never know.

Slim

Slim said:

They will not be keen to lend the balance on a mortgage but you never know.

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I was surprised to see my local CU (Dundrum) proudly advertising 'house deposits' as one of the purposes of their personal loans.

RainyDay said:

I was surprised to see my local CU (Dundrum) proudly advertising 'house deposits' as one of the purposes of their personal loans.

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You and me both. Frankly I was astonished to see it given it clearly circumvents (technically if not legally) the whole point of weighting income/mortgage size.