Refused by NIB

B

BarryY

Registered User
Messages
19
I've been refused a mortgage from NIB. I've owned my house for 4 years and have a mortgage outstanding of 212,000 and it is worth 480,000. I bought it on my own with a guarantee from my mother and my wages have increased approximately 13,000 to 49,000 now. I have rental income of 800 euro and wanted to remortgage for 260,000 over 21 years in only my name (i.e taking my mother out of the equation regarding life assurance etc.) and NIB have refused me. Any ideas why?
 
Do you have any personal loans? A car loan etc will reduce the amout you can borrow drastically!!
 
No personal loans at all. Perfect credit history. Always pay my credit card off in full. Permanent pensionable job. They said that if I was doing a straight switch I would have a better chance but I need more money to do some home improvements. Also said that the rental income isn't guarenteed but I argued that it is seeing as it's my partner that pays it.
 
Seems a strange one... Did you apply yourself or trough a broker?
I have an advisor who is very good & is well in with a lot of the under wrighters in the banks. PM me if you want his details.
 
I'm not close to how much banks would lend these days, but doesn't a mortgage of 260,000 represent over 5 times your current salary.

If it's net income they lookat, according to one of the bank quotes 260k over 21 years would mean about €1500 a month in morgage repayments. If you're earning €49000, I presume you're getting about €2400 into your hand after tax. That would suggest you are proposing to spend over 60% of your net income on mortgage repayments (before any further interest rate hikes). If I was a bank, I'm not sure I'd take that on!! Although I would have thought the guarantee from your mother should mean something??
 
Someone on €49000 would get more than 2400 into their hand each month. I'm on about€40k and get more than €2400 a month.
 
Just as an aside if you are getting more than €635 from renting a room you are liable to tax on the full amount. And are you really charging your partner €800 a month???!!

Sarah

www.rea.ie
 
The reason they said no is because you can't afford it.

repayment on NIB's variable (4.49%) today is approx €1595
however you will more than likely be stress tested (+2%) = €1892

your net income is about €2881

works out to be over 65% of your net income and therefore no chance
even taking full rental into consideration (most banks won't) you're looking at 51%. It's still a big stretch.

change lender, but either increase the term or lower the amount requested. If you can't, then your mother stays or you get someone else on the mortgage with you.

Bob
 
Why not increase the term - pay the extra you were prepared to pay into a good interest savings account and save it to pay off a lump sum at a later date.
 
Thanks for all the replies. I meant to say I got 600 euro from my partner and now realise that I couldn't afford that mortgage on my own. I presumed having so much equity would help me. I will reapply for just the 212,000 and see how I get on.
 
Why don't you also buy your credit records.. see how they stand, that's what they are looking at as well when you apply

[broken link removed]
 
€49,000 salary = €3,000 p/m after tax ([broken link removed]) +€600 rent = €3,600
NIB Tracker (LTV <60%) €212,000 @3.87% over 21 years = €1,230 p/m (here)

Repayment (as % of disposable income) = 30% appx. They should give it to you.

Over 25 years...

NIB Tracker (LTV <60%) €260,000 @3.87% over 25 years = €1,353 p/m
Repayment (as % of disposable income) = 37.5% appx.

You should still get it, if not with NIB, then with another lender.
 
I think your best bet is to apply for your new mortgage over the longest term possible as there is much more likelihood that NIB will give it to you that way. €260,000 should be possible over 35 years. You can then make extra repayments every month if you wish and pay it off in 21 years. Make sure to say that you will get €635 under the rent a room scheme as this will be taken into account. In my experience, Ulster Bank are one of the most lenient and will also pay your legal transfer fees.
 
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