Mortgage broker too nosy?

M

mustang01

Registered User
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Getting docs together for Avant trade up mortgage of 30% LTV and the broker practically wants my first born, asking for a deep dive into all my finances and not just proof of savings but where funds originated etc and a paper trail going back years re same. Is this level of intrusion justified? Feels more like an audit than a simple trade up mortgage application!
 
Avant have a reputation for being more risk averse than the mainstream banks. Possible the broker has experienced this several times now and is just making sure the application meets their requirements.
 
PolkaDot said:
Avant have a reputation for being more risk averse than the mainstream banks. Possible the broker has experienced this several times now and is just making sure the application meets their requirements.
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Should that realistically extend to my deposit/savings though? Only concern of the lender should surely be my ability to repay loan and id have thought a larger deposit would be a much lower risk situ in any case.
 
It's Avants money so ultimately they can look for whatever they like before deciding to lend to any of us. Though from reading about other people's experience on here they do seem to have gone down a few rabbit holes but that's ultimately their choice. Perhaps they are overly cautious but it could also be we've been use to borrowing from banks with poor credit standards.

In saying all that AML requirements probably come into play - all lenders will be required by CBI regulations to ask where large sums of money come from. This could easily be the case if you're trading up. Likewise Avant wants to be sure you're not on the hook to repay those savings to someone else which could ultimately undermine your ability to pay them. Proof of how those funds were saved would go a long way at putting their mind at ease.
 
My experience of Avant is that they do look for a great deal of detail about every aspect of your finances. I assume that this is their policy. Offer lower rates than competitors but be very cautious about who they lend to.
 
A guy I work with was asked to provide proof of funds he said were in inherited from his father 15 years previous. He had to seek out the proof via the UK where is father lived which took a bit of time. These are covered under the AML afaik so it appears they have gone that way now.
 
So it’s just Avant then? I def don’t recall Irish banks I’ve dealt with being so pernickety about deposit funding.
 
Basically I was told same thing. Avant waste of time unless your a civil servant with simple finances. I earn 150k but have around 70k of business loan and a business mortgage of 125k and I only qualify for something like 200k despite BOI clearing me for 410 2 years ago.
I refixed with BOI for 10 years @ 3.3 as ICS are already 3.6 for 5 years and I thing by the time the better Finance Ireland had approved me the rates would be more than 3.3.
Finance Ireland's rates arent alot more and they allow overpayment if 10% of balance Vs 10% of monthly payments with BOI.
Anyway the true rate with BOI is under
3 % for 12 years as I got 3% cash back and first 2 years at 2.9 and next 10 at 3.3 so that's grand. Only fly is overpayment but then again with rates on rise I can't see any charge being levied on bulk overpayment. My fix was on 22/5 and erstegroup indicates the 10 year swap at 1.68 , today it's 1.9!
I would fix at whatever you can personally for as long as you can. Whilst 2% is great 3 isn't bad but 5+ is a killer.
 
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lomber said:
Basically I was told same thing. Avant waste of time unless your a civil servant with simple finances. I earn 150k but have around 70k of business loan and a business mortgage of 125k and I only qualify for something like 200k despite BOI clearing me for 410 2 years ago.
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But that was two years ago?

Avant are able to offer low rates because they cater for super-prime applicants.

That doesn’t just mean civil servants.

Self-employed people are deemed higher risk and people with €195k of other debt are also deemed higher risk.

That’s eminently reasonable.
 
lomber said:
Basically I was told same thing. Avant waste of time unless your a civil servant with simple finances. I earn 150k but have around 70k of business loan and a business mortgage of 125k and I only qualify for something like 200k despite BOI clearing me for 410 2 years ago.
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Do you have personal guarantees on those loans?
 
Sure, Im a sole trader so of course Im on the hook. I took out a covid loan and stuck it in the US stock market (not down alot luckily as Euro gone down the toilet vs dollar . So the 70k would still be there in a different form. Avant wont take that into consideration. They think that you should be straight laced and proper like a Civil Servant would or should be.
Anyway its all academic. With long term Euro swaps today at 1.9% Avant is economically unviable as the minimum cost to service loans is 1.5% above market. So their rates will soon be at 3.4 and mainline banks at likely 4.5-5. I believe the 1% extra is needed to run the labour intensive main street banking system and absorb higher losses on bad loans. In the States in the last few months rates went from 3-5.5 on 30 year fixed for example. Average credit applicants are paying over 6%. There are some solutions like 5 year fixed and 15 year fixed around 5% though. But 5% is a killer imo. I paid 6.5 back in 2006 on a business mortgage(1.5 above euribor, thank god this adjusted down to the current 1.5 with only 125 k left) and my god the interest was staggering. Im still paying for it today as I had to be interest only for several years with a decreasing term so forced to repay capital and interest in a shorter period. Thank god the interest adjusted to under 2% when euribor rates collapsed.
Basically Alan Greenspan triggered the last housing crash when he lifted the fed funds rate from 1.13 in 2003 to 5.5% by 2007. Lehman Bros went bust and the system almost collapsed.
 
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lomber said:
Sure, Im a sole trader so of course Im on the hook. I took out a covid loan and stuck it in the US stock market (not down alot luckily as Euro gone down the toilet vs dollar . So the 70k would still be there in a different form. Avant wont take that into consideration. They think that you should be straight laced and proper like a Civil Servant would or should be.
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So you have €195,000 in personal debt already. Of course they are going to take that into account.
 
lomber said:
Sure, Im a sole trader so of course Im on the hook. I took out a covid loan and stuck it in the US stock market (not down alot luckily as Euro gone down the toilet vs dollar . So the 70k would still be there in a different form. Avant wont take that into consideration. They think that you should be straight laced and proper like a Civil Servant would or should be.
Anyway its all academic. With long term Euro swaps today at 1.9% Avant is economically unviable as the minimum cost to service loans is 1.5% above market. So their rates will soon be at 3.4 and mainline banks at likely 4.5-5. I believe the 1% extra is needed to run the labour intensive main street banking system and absorb higher losses on bad loans. In the States in the last few months rates went from 3-5.5 on 30 year fixed for example. Average credit applicants are paying over 6%. There are some solutions like 5 year fixed and 15 year fixed around 5% though. But 5% is a killer imo. I paid 6.5 back in 2006 on a business mortgage(1.5 above euribor, thank god this adjusted down to the current 1.5 with only 125 k left) and my god the interest was staggering. Im still paying for it today as I had to be interest only for several years with a decreasing term so forced to repay capital and interest in a shorter period. Thank god the interest adjusted to under 2% when euribor rates collapsed.
Basically Alan Greenspan triggered the last housing crash when he lifted the fed funds rate from 1.13 in 2003 to 5.5% by 2007. Lehman Bros went bust and the system almost collapsed.
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Not sure what the digs at Civil Servants are contributing to your question to be honest, or the references to Lehman Bros, or your analysis of Avant’s viability as a business,
I am not civil servant. It would never cross my mind to take out a loan to “invest“ in the Stock exchange. Whilst already having a debt of 125K hanging over me that I was only able to service on interest-only for a few years.

The way you have described your situation puts you in a high-risk category. Any bank that wouldn’t do a deep dive into your finances would be negligent. I guess I am surprised that they didn’t already outright reject the application.
 
Who didnt reject the application? I was approved for 410k by BOI in 2019/20. I didnt have the covid loan but then I didnt have the asset on the other side of my balance sheet. Thats the point.
If you have a zillion on one side and its balanced by a zillion on the other its neutral and any banker could see that. At the end of the day lending in Ireland is with recourse so basically they have you any which way. Theres no handing keys back. Sure you could do a Personal insolvency but the risk of this can be factored into the rate (probably .05 percent) and theres the LTV to protect them.
I understand what your saying though.
For interest Finance Ireland has no debt limits and neither does BOI and persumably the other mainline lenders.
 
lomber said:
I took out a covid loan and stuck it in the US stock market (not down alot luckily as Euro gone down the toilet vs dollar . So the 70k would still be there in a different form. Avant wont take that into consideration.
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Borrowing to invest would be considered a high risk activity.
 
Thats crazy 10 Ive no idea whats taking so long to repossess and persue the borrowers for the difference and interest. Likely what happened there was the loans were sold on several times to vulture funds and each time it complicates the matter.


Borrowing to invest could be considered high risk but in my opinion if the 70k cash flows which it does it makes no difference as its over 5 6 or 7 years (no idea what) then as the shares are not bought on margin I wont be selling till I get my money back and or a return.
 
I gave up on Avant after they queried a 10 gbp overdraft arrears fee from 8 years ago, despite the credit check showing it was cleared the next month and everything 'green'. This was after 2 months of providing documents and facing delays and already receiving the AIP.

I challenged them on why they couldn't proceed based on the information provided showing no issues and they eventually came back after 'escalating' and agreed to proceed. By that point I had decided to refix with BOI.

I understand the need for proper credit risk assessment, but they came across as incapable to digest data provided and make a credit assessment. I was expecting them to next ask for proof of where my communion money came from!
 
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