Mortgage prospects for single income family of 4

Discussion in 'Mortgages and buying and selling homes' started by Lucers, 12 Mar 2019.

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  1. Lucers

    Lucers New Member

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    Last edited by a moderator: 12 Mar 2019
    Hi, looking for advice on how best to plan for house purchase in 2021.

    1 full time civil servant - 2021 salary = 55668 if I stay at current grade. Prospect of further promotion this year to 66495 starting so near 70000 in 2021.

    3000 net income currently

    1 stay at home parent and no prospect of returning to work anytime before 2022 as youngest child won't be of school going age by then. Choice to stay at home is one sacrifice we are happy to make for our family even if it slows down our house purchase.

    Current property - 2 bed apartment bought under affordable housing scheme - Apartment valued at 219000 and our equity will be at least 60000 once clawback paid. We have a tracker rate of 1.15% with UB

    Savings- 24500 currently with intention to have 50000 cash by 2021. Saving at least 600 per month currently with CU.

    Credit card - 100 owed

    No other loans

    Are we on tracker for a mortgage of 340000 or if not how do we get there?

    Thanks!
     
    Last edited by a moderator: 12 Mar 2019
  2. PGF2016

    PGF2016 Frequent Poster

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    Most you can borrow is (usually) 3.5 times your salary. So around 210k if earning ~70k. Don't see how you can get up to 340k as things stand. Open to correction.
     
  3. kilamangiro

    kilamangiro Registered User

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    For a couple, you need to have 2,100 left over per month after your mortgage payment (Stress tested). Add €250 for each child, so €2,600 in your case.

    You say Net Income is 3,000.

    That leaves only €400 for stressed mortgage repayments. Only enough for a Mortgage of around €100k or so, given current salary levels.
     
  4. Lucers

    Lucers New Member

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    Last edited: 12 Mar 2019
    Thanks

    Apologies, house price of 340000 not mortgage of 340000.

    Also l was planning on making a single application, not joint so lower disposable income required. Also 280 child allowance to add to net monthly income if necessary.
     
    Last edited: 12 Mar 2019
  5. RedOnion

    RedOnion Frequent Poster

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    So obtain credit by fraud??!!....
     
  6. Lucers

    Lucers New Member

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    How am I committing fraud if I'm not married?
     
  7. RedOnion

    RedOnion Frequent Poster

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    You've no financial dependents?
    Unless you're going to say that, there's no benefit in a single application.
     
  8. Lucers

    Lucers New Member

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    I have two financial dependants so 1250 for me + 250 per child =1750 required per month to be left over each month leaving 1250 to cover mortgage. My partner is not my dependant. 3000 is a conservative monthly net income as it's based on current net income and not based on salary of 55668
     
  9. Lucers

    Lucers New Member

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    If I am misunderstanding the difference between a single and joint application then please advise.

    I understand that a single application can be made with or without dependants but is made by one person and a joint application refers to two incomes being considered and I am not compelled to make a joint application as I am not married.

    And as such I am fully within my rights to make a single application for a mortgage and will only need to have a net disposable income of circa 1750 after mortgage is paid.

    Really what I was hoping for was positive advice on how to improve my financial situation - should I use my savings to reduce my mortgage debt or should I pay off a smaller lump sum etc. After all I have time to make changes.

    Thanks in advance
     
  10. RedOnion

    RedOnion Frequent Poster

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    Well if the partner is financially independent, they should strengthen your application...

    You need to check the definition of dependent, and seek legal advice on the family home declaration you need to sign. With a single application, you'll usually need to sign a declaration that it is not a family home.

    Back to the amount you can borrow.
    If your salary increases to 70k, the monthly take home will be about 3650 (I've taken a guess at your pension deduction).
    Max you can borrow at 3.5x salary will be 240k.
    Over 30 years (I don't know your age) stressed at 4.5% will require 1216 per month. Leaving 2430 for living.
    It all depends on getting to that salary level.

    Keep saving or overpaying mortgage by a regular amount monthly to prove affordability.
     
  11. PaddyBloggit

    PaddyBloggit Frequent Poster

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    But ... the OP mentions that they are a single income family of 4, with 1 stay at home parent... surely the stay at home parent is dependent upon the working parent to provide for them? Unless they have their own monies coming in, I can't see how the OP can argue for a single application??
     
  12. misemoi

    misemoi Frequent Poster

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    Is the stay at home parent up for duscudiscu at all ? I took a brief look at the new childcare subsidies. Your family might qualify for some which might make a return to work on a part time basis feasible. Try to work out the additional income required for the house purchase.
     
  13. Monbretia

    Monbretia Frequent Poster

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    Your partner is a dependent if they are depending on you to provide income which is what you implied in first post and in your title. If they do not have an income to live on in their own right then they are a dependent on your income whether married or not from a bank point of view.

    You are perfectly entitled to apply in your own name but I would be very surprised if bank do not consider you have 3 dependents and will want you to apply in joint names. It doesn't matter that the second applicant has no income, they can still be joint applicant.
     
  14. Lucers

    Lucers New Member

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    Grateful for some clarity on the single/joint application situation from someone working in the banking / mortgage sector if available.
     
  15. Lucers

    Lucers New Member

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    And yes we are a family as I stated in the title but Revenue dont consider us to be one - there are many different definitions of family out there. For the purposes of a mortgage application I should not be compelled to add someone as a joint applicant if I dont so choose.

    Further, an adult child is not considered a dependant so why would a partner be?
     
  16. Monbretia

    Monbretia Frequent Poster

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    Last edited: 12 Mar 2019
    An adult child if not working and living at home with no other income would be considered a dependent. Your partner is a dependent on your income if they are not in a position to support themselves in some other way, it's simply a fact.

    You are not compelled to add someone as a joint applicant but neither is the bank compelled to approve an application from you in sole name with clearly 3 dependents if you don't fit the criteria.

    I know it's not what you want to hear and must be very disappointing if you thought the plan would work as I understand why you would want to be making plans to move but banks aren't fools either and they will query this scenario.

    (I no longer work in this area but was a mortgage advisor for many years with a main bank)

    Just on your other question re single/joint application there is no requirement for both people to have income for a joint application. For example any couple with a stay at home parent would usually be making a joint application regardless of the fact that one had no separate income.
     
    Last edited: 12 Mar 2019
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  17. RedOnion

    RedOnion Frequent Poster

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    Family definition has nothing to do with it. You can still do a single application if you do insist. But your partner is financially dependent on you.
     
    Firehead and llgon like this.
  18. Brendan Burgess

    Brendan Burgess Founder

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    I have deleted the abusive posts from the OP an subsequent posts.

    Brendan
     
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