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1 person mortgage

  • 13-05-2014 10:57am
    #1
    mel123
    Registered Users Posts: 2,189 ✭✭✭


    Are none of the banks helping single people buy houses anymore?

    I am not a first time buyer, I have my deposit, legal fees etc etc, but the money banks are willing to give me (obviously its based on my salary) wouldnt buy a house in the area I want to live in. I am about 30-40k short on what they will loan me.
    I rent at the moment with a friend, said friend will come and rent a room from me if I bought a house. I do understand the banks cant take that as a given, but when the rental market is gone so crazy you would think they would take it in to some consideration. They also dont take property that you have in your name as equity any more.

    Anyway, back in the good old days, banks helped you get to where you wanted to get. One of my friends went on a savings scheme with one bank - example they told him to save x amount per month for so many months and if he did they would give him the mortgage that he wanted, and they did.

    Just wondering has anyone been to a bank where they want you to get a mortgage and want to help you get to where you want to get?


Comments

  • #2
    coylemj
    Registered Users Posts: 25,326 ✭✭✭✭coylemj


    mel123 wrote: »
    Anyway, back in the good old days, banks helped you get to where you wanted to get.

    Indeed they did, they accepted fictitious proposals involving rented rooms in order to inflate the borrower's notional ability to pay and gave 100% mortgages which stoked the fire of property inflation and got us into the mess we're in.

    I'm sure you'd like the banks to learn the lessons of the past and apply them to new lending, provided it doesn't affect you.


  • #3
    mel123
    Registered Users Posts: 2,189 ✭✭✭mel123


    Thanks for the unhelpful comment, just what I came on here looking for.


  • #4
    fatherted1969
    Registered Users Posts: 2,164 ✭✭✭fatherted1969


    Back in the good old days when i bought my home i could only borrow 2.5 times my p60. I had a house picked out but my 2.5 times my annual wages left me 2k short of asking price so i had to look elsewhere. If banks had maintained that stance then we never would have got into
    the state we did.

    My advice, either keep renting and continue to save and possibly watch house prices continue to rise which may negate your savings or buy a cheaper house and use it to get on the property ladder and trade up in years to come

    Hopefully banks never go back to those days of throwing money to anyone


  • #5
    quadrifoglio verde
    Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    fatherted1969 wrote: »
    Back in the good old days when i bought my home i could only borrow 2.5 times my p60. I had a house picked out but my 2.5 times my annual wages left me 2k short of asking price so i had to look elsewhere. If banks had maintained that stance then we never would have got into
    the state we did.

    My advice, either keep renting and continue to save and possibly watch house prices continue to rise which may negate your savings or buy a cheaper house and use it to get on the property ladder and trade up in years to come

    Hopefully banks never go back to those days of throwing money to anyone

    The only problem with the property ladder is that the house that he hopes to one day trade up to will have risen by the same % if not more.
    This idea that you can buy a property and if it rises 100k you've got an extra 100k over the mortgage is false if you are trading up because the place your trading up to has most likely rose by more than 100k.
    If it falls, your stuck living somewhere that you don't want to live in.

    Op your best course of action is to examine why you didn't get approval and fix that. If it's wages, then you have to accept that you can't afford to own a property in that area.

    They won't take into account rent a room schemes. They were burned too much by this in the past. Also while your friend might be happy renting a room off you, will he be happy renting a room off you if there is a wife and kids there. And vica versa. Would you be happy renting out part of your home to someone else when/if you've children.


  • #6
    Addle
    Registered Users Posts: 4,812 ✭✭✭Addle


    I am also a single mortgage applicant.
    Houses cost x amount whether you're a single or joint purchaser.
    Single purchasers are definitely at a disadvantage.


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  • #7
    mel123
    Registered Users Posts: 2,189 ✭✭✭mel123


    quadrifoglio verde wrote: »
    Op your best course of action is to examine why you didn't get approval and fix that. If it's wages, then you have to accept that you can't afford to own a property in that area.

    Thanks. I am very happy in my job, but could get better paid else where, so I may consider moving jobs (I would have to wait the mandatory time frame which I believe is 6 months to be in a job in order to apply again).


    I understand the whole buy a house cheaper and upgrade, but I dont really want to do that. I want to buy a house where I would be happy to live for the rest of my life if necessary. At the moment that seems unattainable so I think I will stick to the saving for a while longer, or consider a new job.


  • #8
    NIMAN
    Registered Users Posts: 32,975 ✭✭✭✭NIMAN


    Despite what the banks are saying in their adverts, they are still reluctant to lend for people to get houses.

    Applicants have to jump through hoops to qualify for a mortgage, and to be honest one person on their own will really struggle to get the required amount to buy a house on their own.

    In the past the banks were incredibly stupid, giving people any amount of money they wanted, and then they were unable to pay it. There were people on PrimeTime saying they were given 13 times their salary - those days are over, thankfully.


  • #9
    Addle
    Registered Users Posts: 4,812 ✭✭✭Addle


    I see in the newspaper today BOI's advertising is targeting couples!


  • #10
    Thoie
    Registered Users Posts: 6,344 ✭✭✭Thoie


    Unfortunately since the 1970s/80s when dual income households became the norm, house buying on a single income has become a nightmare. On top of the tax disadvantages of being single, the fact that you can't afford a mortgage for a "normal" place, and having no-one to take some of the pressure off when you finally get around to moving, it really does feel like society is punishing you for being single.

    If things were fair, mortgages would only ever be based on a single income, and couples would get to chose which income to use for their mortgage. Unfortunately, banks are there to make profits, so they'll never do that, so single people are left competing for housing against multiple incomes.


  • #11
    quadrifoglio verde
    Registered Users Posts: 3,670 ✭✭✭quadrifoglio verde


    Thoie wrote: »
    Unfortunately since the 1970s/80s when dual income households became the norm, house buying on a single income has become a nightmare. On top of the tax disadvantages of being single, the fact that you can't afford a mortgage for a "normal" place, and having no-one to take some of the pressure off when you finally get around to moving, it really does feel like society is punishing you for being single.

    If things were fair, mortgages would only ever be based on a single income, and couples would get to chose which income to use for their mortgage. Unfortunately, banks are there to make profits, so they'll never do that, so single people are left competing for housing against multiple incomes.

    Surely a couple who have a joint income of 150k are a safer bet than the single chap with an income of 75k.

    When you have to rely on other people, institutions and services life's not fair.


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  • #12
    Thoie
    Registered Users Posts: 6,344 ✭✭✭Thoie


    quadrifoglio verde wrote: »
    Surely a couple who have a joint income of 150k are a safer bet than the single chap with an income of 75k.

    When you have to rely on other people, institutions and services life's not fair.

    It's not that the joint income is necessarily "safer", it's just that the couple can afford more per month, and can therefore borrow more. It feels unfair if you're single, but it's just one of those things, and you get on with it.

    If banks only lent based on one income, then the playing field would be more even, and house prices wouldn't be quite so crazy. Let's take your €150k couple - say one of them earns €100k and the other earns €50k. Let's say banks always have a max lending of 2.5 times a single salary. In that case the couple could get a mortgage of 250k, while the single person could get a mortgage of 187.5k. Yes, there's still a difference due to income disparity, but it's not as huge.

    If the couple were earning 75k each, then the single person on 75k could get the same size mortgage as the couple. With house prices kept at a reasonable level, based on a single salary, then if the couple had kids, one of them could, if they wanted, stay at home with the children.

    That, in turn, would take pressure off the quality childcare, thereby reducing the cost for others who might need it (single parents, etc). With more affordable childcare, single parents would be easier able to work, and with mortgages based on a single salary anyway, once they're working they'd be easier able to afford a home for them and their children, thereby taking some pressure off social welfare.

    Ok, I've convinced myself - we basically need to have a cull on couples ;)


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