Getting a Mortgage

D

dave29

Registered User
Messages
108
Hi All,

1st time poster.

I'll try lay out my question(s) and info about me to help you answer the question and help me!


1st a little about me
I'm 29,
1st time buyer ( living with g/f the past 4 years ) before that with parents.
I've been working since I left secondary school.
Current Salary is €32500 ( possible 0% - 20% xmas bonus ) probably 10% if i'm lucky.. hard time etc. Probably 0% in reality.
I was unemployed for 5 weeks during the last 11 years
I'm in my current job for 2 years 8 months and my old job for over 6 years.

I take homeabout €2220/month roughly. I've Heath insurance through the job and pay some BIK

Loans:
When i was younger I got a few loans for different things. I've never missed a payment ever..
My current loans payments are
1: Personal loan €480/Month ( was a 5 year loan. End this June "" Thank God "" )
2: Car loan €260/Month - Only started in march it's a 3 year loan

Other Direct Debits are
Iphone: €82/month - My phone and the g/f's
Car Insurance €70/month

I've a Credit card with about €3600 left to pay off it. Limit is €5800 but I've been working hard to clear it. I dont use it. I just pay off about €200 / month more if I can.

I've no savings but I will be saving when I finish paying my big loan in June. I know they don't offer 100% mortgages and know i will need €xx,xxx before I can apply.

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Mortgage
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My question is once I pay off my big loan and don't have that to pay would I be able to apply for a mortgage ?

I understand that a mortgage repayment wont be that cheap.
The places i'm looking to buy are roughly €100,000 - €120,000 max

I've never missed a payment on any of my loans and if i didn't have that bloody credit card I'd be alright lol.

The main reason for asking this is before xmas I wanted to get a Camera on Harvery Normans flexi rent thing and they said No. After a credit check.

I think the main reason for the No was I had to much money going out.

So once my big loan is paid off would that open the door for a mortgage

I understand it's not the easiest thing to answer but I hope you guys have more info then I do.

Thank you for your time.
 
I think you need to concentrate on clearing your loans/cc etc and work on getting some savings together (enough for deposit, 10-30% dependent on bank maybe more, legal fees and furnishings).
Why not switch your CC to a 0% balance and give yourself 6 months to clear it.
You could try filling out the money makeover section to see where you could be making savings.
Personally based on your information and what I have been told by my own bank in the last few weeks about what percentage mortgage they are lending you don't have a change.
No harm in applying though.
 
I tired switching my CC before and the new company said no. Think it was Halifax a few years back.
 
To answer your question, no, door will not open in June.

You need to built up significant deposit, I don't know how much exactly. Some banks advertise they are lending 92% but I think you would really need more. And don't forget transaction fees.

You should also look at clearing more debt before you apply, including credit card. If you tried switching a few years ago, you should try again. draw up a plan that is realistic for yourself and review it each month.

After clearing loan in June, I would then increase repayments on credit card. You should be able to clear the credit card debt by end of year.
 
Thanks for the replies.

My CC is with AIB,

Are other banks offering 0% for 6 months if I switch to them ?

0% for 6 months would help soooo much
 
Get your Iphone and download Dave Ramsey's podcast. You'll get 40 mins every day on how to deal with personal debt. It's more for the american market but the same rules apply. It'll show you the way to financial piece and its free.
 
You need to clear all debt before the banks will entertain you. Any outgoings on debt will be removed from your available income when applying for a mortgage, so if you have €2200 take home pay, and have loan payment of €260, CC minimum payment of, say €100, they will take your actual available income as bein €1840. Maximum mortgage would be based on around 30% of this, i.e €600ish per month.

You need to show regular savings. I called around a few months ago - 92% is bare minimum, and that is if you are with that bank. Ulsterbank this drops to 80% LTV if you are not a customer. If you are given a gift of a deposit, documentation needs to be drawn up to say that this is a gift, and does not require payment. Once all your debts are cleared, put the money into a savings account - banks want to see regular money put aside.

My own situation is that i'm on rent-to-buy, don't have any savings as attempting to clear off all my debts, and it makes no sense to save when debts are around. I have applied for mortgages before adn while i was accepted by ESB, it was for much lower than i needed due to presence of a car loan (a €500 per month loan resulted in difference of around €80/90k if i recall correctly) so clearing that out of the way. AIB refused me a mortgage despite being with them for nearly 15 years. Other lenders when having an informal discussion with them advised clearing everything off and establishing regular saving patterns, no blips along the way. I was even advised that if i had any online gambling accounts (I have the Lotto only) to remove them as the transactions will show up on bank statements and can have adverse effect on your application.

Do you need such a high price plan for the iPhones? Can you get a cheaper deal elsewhere with other networks, pay as you go etc. Try and clear up as much in terms of savings that can be made in the house. MBNA are still doing balance transfers as far as i remember - worth applying.

Are you plannign on applying for a mortgage with your girlfriend?
 
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Thanks of the replies.

The Iphone price is for 2.My g/f's and mine. It's the cheapest around

I'll check out those pod casts. thanks.

I'm setting a saving plan up after my big loan is gone. I hope to have my CC all paid off my xmas. Then I want to put away 400-500/month for the whole of 2013. Then in 2014 I'll start looking around for Mortgage. I know this wont be enough. But If i can save more each month I will.

I can save, It's just been to hard over the last few years. You save a little and then something happens where you need money.. Everyone has a story i suppose. I just need to act.

I'm with the EBS and have been since I was 5. So thats 24 years with them. Not sure that matters much.

Anyone know where I can get 0% CC for 6 months ?
 
they say this on there site

Only if you pay your statement balance in full and on time each month

I think that refers to the 0% transfer.. I can't pay it all off !

Maybe i'm reading it wrong.

dame can't post URLs.

am i wrong?
 
If you get a CC, you do a balance transfer - whether that's from another CC or cash into yourt current account. You have to pay a minimum balance each month, think it's €25 (pay the maximum you can afford though), and as long as this is receioved on time (set up a standing order) you won't pay interest for the 6 months. After this time, the outstanding balance reverts to standard interest rate.

I think what you are referring to is the standard credit card set up for purchases. i.e. if you are outside of the balance transfer period, and you buy someting with your CC, if you pay it off by the following statement date, you do not pay interest on that amount.

Look at this link for comparison of MBNA cards and interest free / reduced interest offers. MBNA are actually 10 months at the moment.
[broken link removed]

I had a balance transfer offer with MBNA, used it to pay off some debts (student tuition fees etc.) and when it was over i then transferred it to an AIB platinum card where i managed to get 3.9% on transfers for 6 months. Then switched another balance over at the end of this to MBNA who offered me 3.9% as well for another 6 months. A little bit of hassle, but savings make it worth it. I plough everything I can (usually about €1000) off the card. Considering my car loan is at 10.9% it's definately worth it. HOWEVER - if you use your credit cards in this way, do not be tempted to spend on them. USe them wisely and they can help with money management (in my opinion).

Hope this is of some help
 

Why have you no savings despite having worked for so many years, do you not have anything to show for it? You said you'd be ok if you didn't have the credit card, why did you apply for it, why didn't you use it correctly, as in learn to only purchase what you can afford, and if you can't seem to do that you need to cut it up. How much interest have you paid to the credit card company in the last 2 years. That's an interesting exercise for you. How much was the Harvey Norman camera and what is 'flexi rent thing is that a type of store card? I don't think you should be thinking of a mortgage until you have learnt to save, to save for what you purchase, to not need to get personal loans (what was that for), to budget, and not to apply for new credit when you fancy something. Sorry if this is hard hitting but you are getting on to 29. Being turned down for the Camera should be sounding the alarm bells for you.
 
Thanks flossie I'll look into that


Bronte you are 100% right.

I'll try explain things more here.

I only been getting paid this much for the last 2 years 8 months. Before that I was on 19k/year before tax.

When i was 18 I got a credit card to buy things online. Back then I lived at home and didn't have have bills. It slowly crept up and up playing online poker etc ( I haven't played in over 2 years )

When i was 20/21 I went to Oz for 3 months and spent alot. I got a loan to pay off my CC back then. ( €3k loan )

Then I got 2 more loans over the next 2 years for new cars ( mainly insurance as i was a new driver ) . both €6k so that was €15k - total. Then my last loan about 4.5 years ago was for about €10k helped my mam pay or a extension on the house, Basically for the past 8-9 years I've been paying a loan of some sort off. This was all with the one company GE money. When i was younger getting this money was to easy.

The reason I can't save is down to something like this over the last 4 years.

Big loan €480
CC - from €300 - €600 / month - Sometimes i just have to use it !
Rent - €300
Bill/Upc/Phone/Gas € 200
Food - €150-200
Petrol - €150-€200
Car Insruace - €70


The reason I've to use my CC is sometimes I just have no money left coming up to payday ( paid by month )

Plus there always seems to be something that needs to be done.. like this month is a Car service and NCT. Then next month it's Car Tax !

I need my car for work so I can't get rid of it.

Once my big loans is gone I'll be blasting my CC out of it.

It's probably going to take me a year longer then I think before I've got the savings for a mortgage.

Cheers.
 
Unfortunatly you will have to clear all debts, credit cards and loans. I was very lucky to have a father who cleared all mine. I would have been in the same situation myself. He retired and I pay him monthly now. But like you, I went to the banks and they kept telling me to clear everything, which at the time was impossible. Even now at this very moment, with no loans etc, they want to see 6 months of good savings. A mortgage adviser told me 7/8 grand of savings and thats with me getting a gift deposit.
 
sorry to be a pessimist for you.

I earn just over 90k p.a. - comes at now at 4,200 p.m. Semi state secure job.

My mortgage is 1034. Paid for 8 years on time every month.

I have no credit card debt. (well I have what I spent in the last month but that's 200 - will be paid off when due).

Saving 400 a month

Have had a car loan for 5 years - last payment due 31/1...thought I might get a new car. was refused. BOI. Banking with them for 15 years.
 
Why are you only getting €4.2K p.m. net on a €90K+ p.a. gross? Seems low.
 
hi guys,
could ye help??
I am currently saving at the moment for a mortgage, and need advice are the banks giving out mortgages would ye think car loan paid in april no credit card no credit union loans just gym payments living at home with parents, is it a good time to apply for mortgag!e??
any info helpful!
 

Well you're a poster boy for the celtic tiger cubs, but at least you're honest.

You need a new way of thinking, the reason you cannot save it not down to your loans, but down to the fact that you overspent on lifestyle and got into debt. You have now got into a viscious circle whereby you are not managing on your salary (using credit card before salary comes in).

You need to learn to budget. You must write down your monthly spending and list all your annual expenses so you can figure out how much you need monthly (I assume you are paid monthly). You then open a new current account and lodge your salary there, and you transfer the amount you need to pay all your bills into your account which has all the direct debits. You also decide on how much you can afford weekly to withdraw in cash for incidentals, lunch, bus, going out. You also need to figure out an amount to save, into an account that you won't touch.

As posted above you should show you are serious on debt by figuring out how much interest you have paid on your credit card/loans in the last 2 to 5 years. You will be amazed at how much has gone just on interest.

You are also very vague on your figures, is petrol 150 or 200 a month, ditto with food.

It will be a long time before you will be able to afford a house, certainly not until you learn to budget. Also buying a house with a girlfriend is not a good idea (many threads on this). Do you share the finances, is she better with money?
 


How can one reply to this, no proper details or figures. And it should be in it's own thread.
 
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