Affordable housing mortgage approval

GreenSt

I currently earn 30K and am on the affordable housing list. Going for mortgage approval on my own I was advised by BOI that I would get €117,000 which is ridiculous. How can it be called affordable housing when you have to earn at least 40k to even get a decent mortgage but if you earn over 40k you are not even elidgeable for affordable housing.

As I could only get €117k on my own i decided to see if me and my partner who is also on 30k BUT NOT a first time buyer could somehow put our salaries together and get the mortgage required for affordable housing but were told firstly that that would get us 255k and secondly that affordable housing dont allow this.

As our joint salaries are 60k, it is well within our means to make repayments on a 245k mortgage but because my partner is not a first time buyer her salary is not taken into account with regards to affordable housing.

As we would be living together and therefore both paying the mortagage we want to know if anyone knows of any lenders that will be willing to approve a mortgage based on my salary (30k) and my partners salary (30k), with me being the name attached to the affordable housing and both of our salaries for the mortgage approval. Or if anyone knows of any other way to get mortgage approval relating to affordable housing.

There is no way that even by combining our salaries that we would get a mortgage that would enable us to buy a house. But with supposedly affording housing, we can. This being our only chance of getting a house/apartment.

Any help or advice would be gratefully appreciated

patrickolee

Does your girlfriend still have her property? Could you move in with her?

GreenSt

no she bought with her sister when she was younger thinking it would be good to get on the "ladder" but her sister has since bought a house with her partner and we and now renting.

Trinity

GreenSt wrote:

no she bought with her sister when she was younger thinking it would be good to get on the "ladder" but her sister has since bought a house with her partner and we and now renting.

No expert and have been previously turned down for affordable housing cos 'I couldnt afford it!' but i doubt your girlfriend would be accepted on the application. And having her name attached to a mortgage ror 20 or 30 years but having no rights to the house on paper may lead to trouble.

In fact i was turned down by the council, i wasnt even aware that you had to source your own mortgage, i never got that far with the application!!

The way they see it (even though we've both been turned down) is it is there to help people get on the ladder who cannot do so by normal means. Well your girlfriend was on the ladder and got off!! They also have to ensure that people are not buying affordable houses and selling them at a profit and buying them on the cheap again etc which i guess is understandable.

Did she sell her share of the house? Could you put that as a deposit for a normal mortgage and you could draw it up legally that in the event the house was sold that she could get that deposit back?

Sorry i dont have any advice, currently in the same dilemma, well similar anyway. Cant get a 'normal' mortgage but still dont qualify for affordable housing leaving you to come up with over 1200 a month on rent!!

Might be worth your while calling the council anyway and see what they can suggest.

Good luck!

seamus

117k is very low for a 30k salary. Do you have any particularly large expenses - loans, etc? with 60k combined, you should be well able to pay off a 300k mortgage without sweating.

sprinklestar

Im on the affordable list. Im on a salary of 32k and I got mortgage approval of €250k on my own with both EBS and Ulster Bank - do you have any loans that would be reducing your mortgage limits? 117k seems really low to me!

CherieAmour

Is it the Affordable Housing Initiative you are going for? Cos with the Scheme you get your Mortgage with the council and a 30k salary would prob get you 160k with them depending on your savings, outgoings etc.

With the Initiative you have to go to a bank and the houses are dearer. That sounds like a very very low mortgage approval from the bank for a 30k salary....do you have big debts/outgoings?

professore

CherieAmour wrote:

Is it the Affordable Housing Initiative you are going for? Cos with the Scheme you get your Mortgage with the council and a 30k salary would prob get you 160k with them depending on your savings, outgoings etc.

With the Initiative you have to go to a bank and the houses are dearer. That sounds like a very very low mortgage approval from the bank for a 30k salary....do you have big debts/outgoings?

Whatever happened to 2 1/2 times salary (€75 K) ? That's all I got back in 1998 - and I had a job with "good prospects" in IT (that disappeared in 2001 because of a bubble in stock values but that's another story) .

CherieAmour

professore wrote:

Whatever happened to 2 1/2 times salary (€75 K) ? That's all I got back in 1998 - and I had a job with "good prospects" in IT (that disappeared in 2001 because of a bubble in stock values but that's another story) .

With 100% mortgages now and some people getting up to 5 times their salary I think the OP should probably be offered more than what he has been....

....I'm not saying that banks giving people massive mortgages is right by any means and find it unfathomable how people can pay back these huge sums of money (when you consider what they're earning), but it is just an e.g. of how things have changed since 1998

jdivision

professore wrote:

Whatever happened to 2 1/2 times salary (€75 K) ? That's all I got back in 1998 - and I had a job with "good prospects" in IT (that disappeared in 2001 because of a bubble in stock values but that's another story) .

Banks were looking for a way to lend more money so increased lending limits to three times your salary, then four times, then 92 per cent mortgage, then 95 per cent mortgage, then 30-year terms, then 35-year terms, then 100 per cent mortgage, then five times your salary, then 40-year mortgage. The main reason for the continued increase in house prices was the banks relaxed their lending restrictions in order to increase their loan books. Otherwise the house price increases would have run out of steam because people would not have been able to borrow enough.

OP, the increase in interest rates has decreased the amount banks are willing to lend. Last year you would have got five times your salary. e117k sounds about right for a preliminary figure, they may offer you more eventually, and should be enough to get you one-bed apartment when combined with your savings, depending on which council list you're on. If you want to buy with your girlfriend you should be looking at the private market.

Brooklyn74

sprinklestar wrote:

Im on the affordable list. Im on a salary of 32k and I got mortgage approval of €250k on my own with both EBS and Ulster Bank - do you have any loans that would be reducing your mortgage limits? 117k seems really low to me!

How did you manage that? I'm on the same salary and could only get approval for €170k - no loans or anything!

byte

The Affordable Housing Scheme varies from one Coco to another.

We (myself and girlfriend) have just been offered an Affordable House by Donegal County Council.

We will be buying directly from the builder/developer (and, if we want to view the house, we'll have to arrange it with developer), not from the Donegal Coco. We have to source our own mortgage, and only from three approved mortgage institutions - EBS, IIB Homeloans or Bank of Ireland. We were told we were approved for a council mortgage, but we would have to be refused a mortgage by the other 3 lenders first to avail of a council mortgage.

We can not get a 100% mortgage, maximum 97% and we also have to pay our own legal fees etc.

However, I'm very happy to have been offered an Affordable Home in the first place Now, we need to sit down and discuss with the 3 lenders.

I'm hoping we'll be moving in in September when I have my holidays booked off work, but people tell me it will probably be much later than that!

Trinity

It appears i have been given a lot of misinformation!! I was told you can be years on it, as its like a lottery, if you're lucky your name will be pulled out of a hat when new property is built. Most of which are apartments these days

The shared ownership scheme i believe is different again in that you find your own place once its within the budget max cost to be 285,000?

I gotta call the councils again!

byte

I was under the impression that Dublin council (Fingal?) do work on the lottery basis, from what I've read in here.

Brooklyn74

Trinity1 wrote:

The shared ownership scheme i believe is different again in that you find your own place once its within the budget max cost to be 285,000?

You can use the Shared Ownership Scheme to purchase a house offered you by the Council under the Affordable Housing Scheme, too. That's if you don't earn enough to qualify for a mortgage from any of the banks that deal with affordable housing.

However if you exceed the maximum loan amount (in DCC it's €250K) you will have to come up with a deposit for the difference.

sheepshagger

Trinity1 wrote:

It appears i have been given a lot of misinformation!! I was told you can be years on it, as its like a lottery, if you're lucky your name will be pulled out of a hat when new property is built. Most of which are apartments these days

The shared ownership scheme i believe is different again in that you find your own place once its within the budget max cost to be 285,000?

I gotta call the councils again!

I ws told it was a lottery but got'drawn out of the balott' in just 3 months. . .by South Dublin CC.

Got my mortggae through BOI. . .by the sound sof it the OP must have existing loan repayments as they have offered you a low amount for your income. In saying that have been told that this is the biggets problem facing affordable home applicants (they get approved by the council but cant borrow enough from the banks ).

Trinity

sheepshagger wrote:

I ws told it was a lottery but got'drawn out of the balott' in just 3 months. . .by South Dublin CC.

Got my mortggae through BOI. . .by the sound sof it the OP must have existing loan repayments as they have offered you a low amount for your income. In saying that have been told that this is the biggets problem facing affordable home applicants (they get approved by the council but cant borrow enough from the banks ).

Congrats!!

I on the other hand wouldnt win a raffle, never mind a house

CherieAmour

Fingal is list only, no lottery so when you get high enough to start getting offers, homes are sold in the order of your place on the list. Very fair in my opinion, the rest of the Dublin councils use a lottery system - I'm not sure if they have a list too or not....

seamus

CherieAmour wrote:

Fingal is list only, no lottery so when you get high enough to start getting offers, homes are sold in the order of your place on the list. Very fair in my opinion, the rest of the Dublin councils use a lottery system - I'm not sure if they have a list too or not....

I was under the impression that all of the Dublin councils had abandoned the lottery in favour of a list. When your name comes up, you're offered a place. You can review the place and reject it if you don't want it, at which point you go back to the end of the list.

CherieAmour

seamus wrote:

I was under the impression that all of the Dublin councils had abandoned the lottery in favour of a list. When your name comes up, you're offered a place. You can review the place and reject it if you don't want it, at which point you go back to the end of the list.

I definitely didn't hear anything about the lottery being abandoned. I know with some of the Dublin councils you go to the end of the list if you turn a place down, but you don't with Fingal. You can turn down as many as you like but your approval is only for a year after which time you get reassessed. If you continue to be eligible you retain your place on the list.

Mrs_Doyle

I was approved last year, for €200k, on a salary of €27.5k

I earn a bit more now, have no loans, and a few bob in the bank, so I'm hoping to be approved for as close to €250k as I can get.

I am surprised you were approved for such a small amount.

The_Conductor

Mrs_Doyle wrote:

I was approved last year, for €200k, on a salary of €27.5k

I earn a bit more now, have no loans, and a few bob in the bank, so I'm hoping to be approved for as close to €250k as I can get.

I am surprised you were approved for such a small amount.

I have a friend in a similar situation. He'd be very interested in knowing roughly what he could hope to be approved for mortgage wise, so he could start looking around. It would be great if you could post what sort of a mortgage you qualified for (or if its too personal, I'd be grateful if you could PM me).

Kind regards,

Shane

deadduck

my car loan is whats killing me. with earnings of 36k, and 330 going on car loan a month, i'll only get approved for 160k, but if there was no car loan to be paid, i can get up to 260k (according to the mortgage calculator on EBS). gonna have to shift the car loan!

Mrs_Doyle

deadduck wrote:

my car loan is whats killing me. with earnings of 36k, and 330 going on car loan a month, i'll only get approved for 160k, but if there was no car loan to be paid, i can get up to 260k (according to the mortgage calculator on EBS). gonna have to shift the car loan!

Can you reduce your car loan and pay a smaller amount over a longer period of time?

deadduck

not at the moment, but after christmas i should be able to knock a good chunk off of it. time for some overtime methinks!

(should also add that the 260k EBS will give me, if no car loan was to be paid, is totally dependent on me renting out the other room of a 2 bed apartment)

gavdbyrne

I am also in the process of buying an affordable house and have included income from renting out a room in my mortgage application. When I asked the SDCC about renting a room under the affordable housing they said I couldn't, does anyone know if there is a definite legal clause when you sign for your house that says you can't rent a room?

I can understand not being able to rent the entire property, as they don't want it to be used as an investment. But renting out 1 room to help out with the costs involved seems reasonable to be me!

podge018

You can with Fingal but not with the rest I think. Another reason why I believe Fingal is head and shoulders above the other councils when it comes to Affordable housing.

deadduck

maybe i'm just not looking in the right place, but i can't see anything about not being able to rent out a room? (in the dublin county council regulations)