Mortgage intermediary asking for cash deposit as mortgage condition

[lff12]

All:

I've a friend in a manjor panic. Basically she visited a mortgage intermediary after being referred to him by a friend and he told her on her income she could borrow a certain sum and to "go buy a house." She was borrowing 100% as she wishes to use her 4000 in savings to purchase furniture etc. She managed to find a house for about 7k less than the amount she was told was the max she could get and put a deposit on it.

However the mortgage man has been extremely problematic, difficult to get answers from, and very evasive. He asked her to put her father down as a guarantor, however now he says he is too old (he's around 60). Now he says the precondition for the mortgage is that she place 13k in a deposit account for one year (basically the first years repayments). She is in a total quandry now as she doesn't have that kind of money to spare, and has already paid out her savings as a deposit and on solictors fees.

At the moment the only other borrowings she has is about 500 euro on her VISA. Any suggestions as to how she can approach this quickly and effectively?

The only options I can see are:
1. Let the whole thing fall through, leaving her nearly 5k out of pocket.
2. Try to borrow 13k from the credit union or bank and divert the funds.
3. Bring in her partner (who currently isn't in the equation) who has a weak credit history from about 4 years ago and so savings but an income of about 32k a year, in as joint applicant for the mortgage.
4. The only alternative is her parents getting an equity loan on their own house.

 

[Sarah W]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

1. If she does walk away her deposit would be returned (presuming she hasn't signed contracts which, without a valid mortgage offer, should be the case) so she wouldn't lose any money apart from covering the legal fees which should be minimal at this early stage.

2. I'm guessing the lender in question is PTSB who are fond of asking for money on deposit. If she borrows this money it will reduce the amount she can borrow on the mortgage so that's a non runner. Guarantor's are not accepted on 100% mortgages at whatever age.

3. A possiblilty - depending on how 'weak' his credit history is (he should call the ICB to do a check on his rating before trying for a joint application).

4. Not an attractive option.

Your friend needs to either change brokers quickly or go directly to PTSB or whichever lender is being recommended and find out exactly where she stands. Being "evasive" is useful if you are a spy - not a good quality for a service industry employee!

Sarah

www.rea.ie

 

[Brendan Burgess]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

It doesn't sound as if you are getting a good service from the intermediary, but then again, he may be just passing on what the Ptsb(?) are insisting on. Get a second opinion from another mortgage intermediary.

Brendan

 

[Money12345]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

She should go and seek further advice. It does sound like PTSB alright - they tend to ask for these types of deposits on a 12 month term which really doesnt make sense especially on 100% mortgage. She would also need to double check with the broker to confirm their list of lenders. She should also factor into her income rental allowance.

 

[lff12]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

3. A possiblilty - depending on how 'weak' his credit history is (he should call the ICB to do a check on his rating before trying for a joint application).

When I say weak I mean credit card cancelled, bank account closed (both sent to debt collectors), and several months of arrears on a loan and another credit card. But everything was paid in full within 2 years. And has since had another credit card and a small loan - no payments missed as fas I know, and loan apparently only has a few months outstanding. Earns a higher basic salary than the friend, but overall income is smaller due to less overtime and lack of shift allowance.

Sounds like PTSB and this intermediary (who apparently is an ex PTSB employee) is taking my friend for a ride. It looks like the parents are going to ravage their own savings for her.

 

[Sarah W]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

I would advise your friend to get all her papers back ASAP and go to another broker who has agencies with all the main 100% lenders (First Active, Ulster, BoS, ICS, IIB and EBS) or for her to approach the lenders directly. I would hazzard a guess that this broker/agent may not have strong links with lenders other than PTSB.

Sarah

www.rea.ie

 

[CathyK]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

I would agree with Sarah, find a broker that deals with all the lenders that are currently offering 100% as it would appear that this broker may only have a relationship with PTSB, dont waste any more time on this one, move one now and your friend could still keep this property.

 

[lff12]

Re: Mortgage intermiediary asking for cash deposit as mortgage condition

As it happens the friend is from a family with savings. I think this is an appalling case of mis-selling as clearly this isn't really a 100% loan. Also the intermediary shouldn't have told my friend to "go buy a house" without having approved the mortgage first. And finally, if it were me it would be €4,000 down as I come from a fairly poor family who cannot pull 13k out of a hat just like that. I've passed on your advice and suggested that she complain to whatever professional body the guy belongs to as he really could have put her up sh**'s creek.

I'm constantly flabbergasted at the assumptions in Ireland that everybody is wealthy and has plenty of cash to blow.