Mortgage Refused!!

barrymac20

Myself and my girlfriend were this week refused a mortgage due to the fact that her name is on the irish credit bureau (ICB) because of some trouble she last year with credit card repayments totalling €400. I am now trying to get mortgage with my dad as gaurantor but would be hoping that myself and my girlfriend can re mortgage in a couple of years. However we have been told that her name will be on ICB for 5 years and we are worried that we will not be able to get mortgage until that time is up.
Does anyone have any experience with this? She has a good job now and if she has a clean bill of health for the next couple of years would the banks still turn her down? Any help or advice would be appreciated.

P.S. Sorry if i havent explained situation properly!!

Victor

The banks are looking at people's risk profiles, especially with the current crunch. Anything that will interfere with repayments is being looked at.

That said, anything that puts distance between that incident and your next application will improve your chances of being accepted. Time, employment stabilty and salary progress are probably the most important factors. Make sure that it doesn't happena again - the banks don't like patterns of non-payment.

barrymac20

Thanks for your help Victor, much appreciated.

DublinDilbert

To be honest your story doesn't sound correct.... no one gets into trouble for a credit card debt of €400... they are quite happy if you don't pay it, they'll just keep adding on interest month after month.

The credit card companies make their money when people don't pay.... they would like if all of us to stay over-drawn month on month, year on year....

Victor

I imagine the banks are being a lot fussier at the moment. They would, yes, be happy to make their money on the €400. The would not be happy to lose cashflow on X number of €400,000 loans.

barrymac20

I take your point and your right to a certain extent. They are happy once you are making the minimum repayments every month. But she missed three or four months completely, hence the credit card was revoked. Its very frustrating considering its such a small amount.

ambro25

DublinDilbert wrote: »

To be honest your story doesn't sound correct.... no one gets into trouble for a credit card debt of €400... they are quite happy if you don't pay it, they'll just keep adding on interest month after month.

Just a wee €0,02 on that - since we don't know the first bit about the ins and outs of this.

I nearly managed to get myself a CCJ in the UK way back when, over a similar, trivial sum (actually half of that), when my "car insurer" (who turned out to be a broker) went bust and did a runner with the premiums, between the time I had resiliated the contract (crossing all ts and dotting all is per contractual terms) and the time the next direct debit was to come out of my CC account (having of course cancelled the DD in the intervening time). Needless to say, the real insurer still wanted the last 3 months' worth of direct debits, even though my contract was not with them - I fought the good fight, but all the same, had I lost and bagged myself the CCJ, the net effect would have been exactly the same as the OP's GF: bad debtor, with a credit score slap.

I know people who got in trouble for a whole lot less than €50 on a CC account

johnnyskeleton

barrymac20 wrote: »

Myself and my girlfriend were this week refused a mortgage due to the fact that her name is on the irish credit bureau (ICB) because of some trouble she last year with credit card repayments totalling €400. I am now trying to get mortgage with my dad as gaurantor but would be hoping that myself and my girlfriend can re mortgage in a couple of years. However we have been told that her name will be on ICB for 5 years and we are worried that we will not be able to get mortgage until that time is up.
Does anyone have any experience with this? She has a good job now and if she has a clean bill of health for the next couple of years would the banks still turn her down? Any help or advice would be appreciated.

P.S. Sorry if i havent explained situation properly!!

Poor credit rating? No problem, just talk to your local sub-prime lender*.

To be honest, such a small negative rating on her credit rating would have made little or no difference two years ago, but now it seems most banks want to find any reason not to loan money.

I would look at this as a blessing rather than a hinderance. Until house prices stabilise (which most estimates would consider won't happen for 2-10 years) you are always better off renting rather than purchasing. So if you take the next five years to rent and save you will be in a much better position to buy a place.


*Just in case you haven't been reading the papers for the last 6 months, don't follow this advice.

Glenbhoy

johnnyskeleton wrote: »

Poor credit rating? No problem, just talk to your local sub-prime lender*.

To be honest, such a small negative rating on her credit rating would have made little or no difference two years ago, but now it seems most banks want to find any reason not to loan money.

I would look at this as a blessing rather than a hinderance. Until house prices stabilise (which most estimates would consider won't happen for 2-10 years) you are always better off renting rather than purchasing. So if you take the next five years to rent and save you will be in a much better position to buy a place.


*Just in case you haven't been reading the papers for the last 6 months, don't follow this advice.

Yeah, I had a similar problem about 3 years before I was approved for a mortgage, same type of scenario, where I was in let's say 'dispute' with the cc provider, the amount was less and it was eventually settled, but was still registered with the ICB, it was mentioned to me when my application was reviewed, but no issue was made of it, at all, times have changed though...

starky

barrymac20 wrote: »

I take your point and your right to a certain extent. They are happy once you are making the minimum repayments every month. But she missed three or four months completely, hence the credit card was revoked. Its very frustrating considering its such a small amount.

I don’t mean to sound condescending but posts like this really infuriate me.
Its not about the value of the amount in dispute. It’s the fact that she missed three payments. This is unacceptable. Its irresponsible and shows that she cannot be relied upon to hold up her end of a financial agreement with a bank. If she has done it once then obviously paying back monies owed by her is not of any major priority. The bank was quite right to refuse to lend her any more money as she has demonstrated that she is not responsible enough to even pay a trivial amount off her credit card.
When you sign for financial products you have a legal obligation to honour them, regardless of the amount involved.
Unfortunately for her the banks use the ICB to monitor defaulters to protect them self’s from financial loss.
I bet she will never miss another payment again, so in a way this has been a valuable lesson in the realm of financial products and the severity of not bothering to take them seriously.

Glenbhoy

starky wrote: »

I bet she will never miss another payment again, so in a way this has been a valuable lesson in the realm of financial products and the severity of not bothering to take them seriously.

Well if that's the case then there shouldn't be a problem with giving them a mortgage then.
I think several of us also made the point that whilst the banks should use the ICB info in scoring their applications, up until this year, they largely ignored it. Also, when you talk about consumers not taking financial products and the obligations to repay them seriously, you should remember that many in the banking industry have done the same:
http://www.npr.org/templates/story/story.php?storyId=90840958

starky

Glenbhoy wrote: »

Well if that's the case then there shouldn't be a problem with giving them a mortgage then.

Yea in about five years time ;-)

Glenbhoy wrote: »

Also, when you talk about consumers not taking financial products and the obligations to repay them seriously, you should remember that many in the banking industry have done the same:
http://www.npr.org/templates/story/story.php?storyId=90840958

Banks may have implemented irresponsible lending practices, but a finical contract takes two to tango, people did not have guns pointed on there heads when they were taking out massive mortgages.

They are equally responsible for any mess they are now in, and partially (along with many others) responsible for the Irish property fiasco.

Its always some one else’s fault in this country: banks, developers, estate agents these people were merely cashing in on the Irish obsession to buy properly fuelled buy the general “borrowing” public on a quest to make a quick buck, AKA greed. God forbid that it would actually be the fault of the public, sure weren’t we all mislead?

I have and never would borrow more then I could afford to pay back if more people had that attitude then the house prices may not have accelerated as rapidly as they did.

Just because you can borrow 500,000 (in the eyes of a bank) to buy a house does mean you automatically should.

We need a balance of responsible lending coupled with responsible borrowing but as the housing market collapses we will see banks and borrowers forced to think about this, its just a shame its come to late for many borrowers.

barrymac20

starky wrote: »

I don’t mean to sound condescending but posts like this really infuriate me.
Its not about the value of the amount in dispute. It’s the fact that she missed three payments. This is unacceptable. Its irresponsible and shows that she cannot be relied upon to hold up her end of a financial agreement with a bank. If she has done it once then obviously paying back monies owed by her is not of any major priority. The bank was quite right to refuse to lend her any more money as she has demonstrated that she is not responsible enough to even pay a trivial amount off her credit card.
When you sign for financial products you have a legal obligation to honour them, regardless of the amount involved.
Unfortunately for her the banks use the ICB to monitor defaulters to protect them self’s from financial loss.
I bet she will never miss another payment again, so in a way this has been a valuable lesson in the realm of financial products and the severity of not bothering to take them seriously.

I appreciate your comments and i apologise for "infuriating" you. However, the point of this thread was not to discuss irresponsibility in repaying debt. I merely trying to get some advice from someone in the know as to whether or not we would be able to get a mortgage sooner than the five years quoted. Thanks and apologies once again!

brendan4

I'd say you would be able to get a mortgage from somewhere before the 5 years have elapsed. However you'll probably be viewed as a higher risk and therefore end up paying a higher rate. You'll be deemed 'sub-prime'. There are lenders out there that provide products specifically for your situation (and people like the self employed, older, or otherwise viewed as riskier). Check out http://www.gemoney.ie/en/mortgages/index.html
Their rate is higher, but it might be an option for you?

For the record, on the judgements been made on your gf by other posters, I think it's quite unfair. They do not know the circumstances, or the situation. We all make mistakes, don't be too hard on her.

starky

barrymac20 wrote: »

I appreciate your comments and i apologise for "infuriating" you. However, the point of this thread was not to discuss irresponsibility in repaying debt. I merely trying to get some advice from someone in the know as to whether or not we would be able to get a mortgage sooner than the five years quoted. Thanks and apologies once again!

To be honest I was just doing exactly what a bank would do, looking at the situation in black and white. Banks are not interested in reasons why or extenuating circumstances when it comes to credit approval, (they may be more fourth coming if you already owe them money) they look at you simply as a risk factor. Anything you have done however unintentional, that may increase your risk of non payment will generally go against you.
You will most likely be at the mercy of the subprime lenders if you do need a mortgage.
I would advise you to apply to every single bank, you never know one of them may over look the minor infringement on the ICB credit report in order to secure the business, mortgage times are tough after all.

Glenbhoy

starky wrote: »

Its always some one else’s fault in this country: banks, developers, estate agents these people were merely cashing in on the Irish obsession to buy properly fuelled buy the general “borrowing” public on a quest to make a quick buck, AKA greed. God forbid that it would actually be the fault of the public, sure weren’t we all mislead?

Why do people always come out with this crap about 'the irish obsession to buy property"? It's thinking such as that which led to the situation here, and in Spain, and in the UK, and in the US and, well actually, everywhere else where's there's been a property bubble, i.e the notion that something makes this particular asset bubble unique.
You are right of course that borrowers are also partially to blame, but you also have to recognise that for many people, the fact that a bank would lend them money was sufficient for them to feel they could afford it. I also know better than most that the information on applications was often 'exaggerated', but again, when the the govt are encouraging people to buy their properties through both the generous tax benefits available to owner occupiers and by exhortations from the likes of our former great leader, who in April 2006 (the very peak of the boom) was encouraging people to buy property on the basis that those who had waited had lost out, it was understandable that many would fall for it.

Victor

Glenbhoy wrote: »

Why do people always come out with this crap about 'the irish obsession to buy property"? It's thinking such as that which led to the situation here, and in Spain, and in the UK, and in the US and, well actually, everywhere else where's there's been a property bubble, i.e the notion that something makes this particular asset bubble unique.

The Irish obsession is stronger than the others. The bubbles in Spain and parts of the USA have been driver by non-locals.

Ste.phen

Victor wrote: »

The Irish obsession is stronger than the others. The bubbles in Spain and parts of the USA have been driver by non-locals.

Spain, Florida were probably Irish investors in large numbers, no?

Victor

A lot of Spain was grey / black money that people were getting out of other countries, combined with local corruption.