Mortgage advise for a first time buyer

bazery

Hey there basically looking for advice on getting a mortgage, myself and my gf want to get a house at the end of next year and we want to take out a mortgage of around 400,000, Is this total wishful thinking or is this sort of think possibe, I'm earning just above 33 and she is earning around 22 a year, are we mad to go looking for this much or should we start looking for new jobs:) Any advice would be great because at the moment i have no idea what to expect

ixoy

You won't get a mortgage of 400k on a combined salary of 55k - certainly not under current market conditions.
Are you saving for a deposit now?

aquascrotum

400k on 52k!?

Without hijacking another users thread, myself and partner have a combined income of 72k.

What realistically are lenders going to offer us? I've no intention of borrowing to the hilt even if some eejit wanted to let us.

bangersandmash

bazery wrote: »

Hey there basically looking for advice on getting a mortgage, myself and my gf want to get a house at the end of next year and we want to take out a mortgage of around 400,000, Is this total wishful thinking or is this sort of think possibe, I'm earning just above 33 and she is earning around 22 a year, are we mad to go looking for this much or should we start looking for new jobs:) Any advice would be great because at the moment i have no idea what to expect

You're looking for over 7 times your combined salary on below the average industrial wage. Unfortunately that might have been unrealistic even at that peak of the boom.

If you're both permanent then realistically you'll be looking at 3.5 times your average salary, and requiring 10%+ deposit up front. That would give you about max 190k, assuming you have a 20k deposit. Obviously it'll vary from bank to bank, but it's unlikely you'll get far more than that.

Mitzy

You will qualify for a max of about €290,000 providing you are renting out a room. Max finance will be 92% so you will need to have your deposit. I'm also assuming you will qualify for a 40 year term. Hope this helps. PM me if you want any more info.

ZYX

bazery wrote: »

Hey there basically looking for advice on getting a mortgage, myself and my gf want to get a house at the end of next year and we want to take out a mortgage of around 400,000, Is this total wishful thinking or is this sort of think possible, I'm earning just above 33 and she is earning around 22 a year, are we mad to go looking for this much or should we start looking for new jobs:) Any advice would be great because at the moment i have no idea what to expect

It is also important to work out what you can afford not just how much you can get. At 5.5% interest a year, a €400,000 mortgage would cost you €22,000 a year in interest even before you start paying off the capital.

delly

Most mortgages are based on 40% net takehome pay per month at the moment, so roughly:
You: €2,200 PM
Your GF: €1,560
Room rental: €200
Total = €3,960
Minus 60%: €2,376
Total to pay Per Month (40%)= €1,584

So given 40% of your net per month is €1,584 and at a current rate of 5.5%, I reckon you might get €300k at a push. In saying that tho', your ability to handle a rate change would be volatile, so I doubt you'd even get the €300k.

bangersandmash

Mitzy wrote: »

You will qualify for a max of about €290,000 providing you are renting out a room.

Given the current state of the rental market and that living with an owner-occupier (especially a couple) is a last resort for many people, it would not be advisable to rely on that income.

Weyhey

400k mortgage as First Time Buyers? To me that's not getting your foot on the property ladder that's jumping a fair few rungs!

bazery

Thanks or all the advise guys, Its all very confusing at the beginning. I'm currently saving like mad and so is my girlfriend, hoping to have 30 saved by next year before we actually make a move on anything. What is the average industrial wage?? I'll be hoping to start a new job sometime next year also obviously with more money. I think she just doesn't want to end up living in some dody college type accomadation. would somewhere in the 250 bracket be a more realistic target with a 30,000 deposit? thanks again

bazery

ZYX wrote: »

It is also important to work out what you can afford not just how much you can get. At 5.5% interest a year, a €400,000 mortgage would cost you €22,000 a year in interest even before you start paying off the capital.

Me and the gf had this argument the other night :P I basically said i don't want to be broke for the rest of my life. We came to and understanding that we'll just have to have a very good sitting room and bedroom haha:D

dan_d

When we went for a mortgage a few months ago, as FTBs we told the broker that we didn't want to be paying half or more of our salaries (individually) as repayments per month.We also told her roughly what we needed.It gave a benchmark for her to start on and say "yes you can afford this amount" or no you can't. Plus we had less saved than you intend to have but our combined incomes were more.In the end we got a house for almost 100,000 less than we were approved for and a 35 year mortgage.Realistically it would have been very difficult to repay the full amount we were approved for, now that I look back on it. Get the biggest deposit you can together, and you'll be less likely to be broke for the rest of your life!Oh yeah, and one other thing is that if it is at all possible, try and save enough so that you have a decent deposit with a bit left over for yourself. Don't clean yourself out completely, if at all possible.

theloanarranger

I see the last post was a year ago. Are there any first time buyers out there?

D3PO

way to bump a year old thread :rolleyes:

spockety

theloanarranger wrote: »

I see the last post was a year ago. Are there any first time buyers out there?

Interesting user name

Why are you scouting for FTBs?

theloanarranger

Not surprisingly with the name "theloanarranger", I am a mortgage broker. I recently joined boards.ie after seeing the orange lights in the sky (possibly Chinese lanterns apparently). It was by accident that I stumbled upon the first time buyer thread. Our business in Ireland has been pretty much dead for the best part of 2 years, but my industry colleagues speak of the "F.T.B." (first time buyer) like a Messiah, always coming soon. I was hoping to see this thread being more active as an indicator that there might be some movement in the Irish residential property market, rather than actually looking for business. The latter is probably against the rules anyway?

I await the joyful coming of the F.T.B.

bmw4sale

me and so many of my friends sum looking to buy me and a 2more apporved planning but the banks just dont want to hand out money..

theloanarranger

bmw4sale wrote: »

me and so many of my friends sum looking to buy me and a 2more apporved planning but the banks just dont want to hand out money..

If you want to run your numbers by me on this board, feel free. Alternatively send me a personal message or consider an enquiry through my website. I don't think I'm allowed mention it here, but you should find it in my profile.

galah

while we're hijacking...

is it actually possible that the banks require less than the 8 % deposit if they can see that you have a good money saving track record? We have our sums done, got preapproval on the phone for an obscene amount of money (which we will not require), but, due to various things this year, our saved "deposit" has dwindled somewhat (we got married, and I need a new (as in second-hand) car cause mine os on it's last wheels...

So what used to be 8 % is now about 5 % of the mortgage deposit....

Any opinions on that?

theloanarranger

Re the dwindling deposit:
Yes I could offer some advice in this area, but I have just had my knuckles wrapped for daring to offer free expert advice to somebody who needs it. Apparently it is better to get mortgage advice from some Joe Soap who will perhaps have 2 or 3 mortgages in his lifetime. I expressed my opinion to the moderator that this makes this board a bit pointless. If it was about medical matters, presumably anyone could express an opinion, unless of course the person was a medical professional.

D3PO

galah wrote: »

while we're hijacking...

is it actually possible that the banks require less than the 8 % deposit if they can see that you have a good money saving track record? We have our sums done, got preapproval on the phone for an obscene amount of money (which we will not require), but, due to various things this year, our saved "deposit" has dwindled somewhat (we got married, and I need a new (as in second-hand) car cause mine os on it's last wheels...

So what used to be 8 % is now about 5 % of the mortgage deposit....

Any opinions on that?

Its a falling market and banks have removed their 100% mortgages from offer. The problem is not your repaying ability right now its that with a 5% deposit its likely the asset value could put you in negative equity in a 6 to 9 month period.

then putting the banks loan at risk should something happen to your ability to repay.

Do you really want to buy right now ? Maybe subconciously you dont want to I mean why else would you go and spend a portion of your deposit on a new car ?

galah

I need to spend a bit of my deposit on a new (secondhand) car cause mine is actually falling apart. As in "will not pass the NCT because it's 13 years old and has gazillion of miles on the clock, a hole in the footwell and an electrical fault with the engine" falling apart (not a celtic tiger "the ash tray is full" falling apart). I don't WANT a new car, I NEED a new car.

I don't think the asset value is a big problem - we're not talking totally overstretching by 100s of thousands - we're talking the difference between 20 k and, say, 14 k as a deposit. So mortgage repayments wise, we can afford it, even if the interest rates go up by another 2 - 4 percent (it won't be pretty, but doable). Also, the mortage would be less than our rent, and I am sick of the city and want to move out.

I don't care about negative equity, we're buying to live in the house for a long time, and are not planning to sell for profit or anything anytime soon.

Any carefully phrased opinions on that?

D3PO

galah wrote: »

I need to spend a bit of my deposit on a new (secondhand) car cause mine is actually falling apart. As in "will not pass the NCT because it's 13 years old and has gazillion of miles on the clock, a hole in the footwell and an electrical fault with the engine" falling apart (not a celtic tiger "the ash tray is full" falling apart). I don't WANT a new car, I NEED a new car.


I don't care about negative equity, we're buying to live in the house for a long time, and are not planning to sell for profit or anything anytime soon.

Any carefully phrased opinions on that?

ok so can i assertain you havent actually bought the car yet ? Is so get the mortgage approval first then buy the car the offer will remain valid for 6 months so you can drawdown later.

on the second point you dont care about negative equity but unfortunatly the bank do which is the problem here.

galah

but as long as I can afford the repayments, and afford the repayments for a long time with rising interest rates, I don't see the problem - sure another 5 grand on top of the loan wouldn't make a difference?

It still does not answer the question though - will the banks look at your savings record at all, and, in some cases, make an exception regarding the deposit required?

The_Chopper

Guys if you're looking to see how much you could potentially get use this site https://www.mortgages.ie/index.cfm/spKey/home.apply_online

theloanarranger

"Is so get the mortgage approval first then buy the car the offer will remain valid for 6 months so you can drawdown later.

on the second point you dont care about negative equity but unfortunatly the bank do which is the problem here."


Dangerous and misleading advice here to galah! Most offers will not last 6 months anymore, certainly not without an updated credit check being performed. The undisclosed loan will then be spotted if you borrow to buy the replacement car. However if you take the car loan over as long a term as possible (until you draw down the mortgage), the monthly car repayment may not ruin your application if you already comfortably qualify for your intended mortgage amount.

The current 92% maximum mortgage is only available from a dwindling number of lenders. Grab it while you still can.
In the current environment, planning and presentation of a mortgage case has become very important. Go to a mortgage broker. As I can't promote myself, perhaps refer to PIBA.ie and search the list of mortgage brokers.

D3PO

theloanarranger wrote: »

Dangerous and misleading advice here to galah! Most offers will not last 6 months anymore, certainly not without an updated credit check being performed. The undisclosed loan will then be spotted if you borrow to buy the replacement car. However if you take the car loan over as long a term as possible (until you draw down the mortgage), the monthly car repayment may not ruin your application if you already comfortably qualify for your intended mortgage amount.

The current 92% maximum mortgage is only available from a dwindling number of lenders. Grab it while you still can.
In the current environment, planning and presentation of a mortgage case has become very important. Go to a mortgage broker. As I can't promote myself, perhaps refer to PIBA.ie and search the list of mortgage brokers.

You might think your the authority on mortgages but your post stinks of being a vested interest.

hes not planning on taking a loan out for the car so your "advise" is of no use here as he wont be leaving any loans undisclosed.

Many instituions do still offer 92% mortgages. Is it maybe that some of these institutions are either no longer paying brokerage fees or have reduced these fees thats making your post sound like nothing more than you being somebody with a vested interest ?

Your providing misleading advise and trying to lure persons to using your services. Is business that desprate that you have to do that ?

so please before you call somebodies advise dangerous make sure you word your post in a way that doesnt look like your desperatly touting for business.

If I wanted to provide dangerous advise I would have suggested the OP find a credit union that doesnt provide data to the ICB and get a loan from them to make sure he has the full deposit value.

That would be dangerous advise hense why Im not giving it.

Stating that banks are offering 92% mortgages is not misleading

stating that banks mortgage offers stay valid for 6 months is not misleading. (Tell me what banks are not offering this term with theri offers)

movin_2d_sticks

theloanarranger wrote: »

but my industry colleagues speak of the "F.T.B." (first time buyer) like a Messiah, always coming soon.
I await the joyful coming of the F.T.B.

lol im still laughing here, funniest thing i read all day

im an FTB so

bit i will be avoiding your kind like fire and buying in cash

i still remember the days only a year ago when the banks were trying to sell me mortgages and/or shares, in hindsight im quite happy i told them to stick their loans/credit and "investments" up their ... (needless to say that bank manager doesn't have a job anymore)

'

D3PO

Galah also I forgot to mention you can get a 97% mortgage with BOI still but only if you are looking to purchase an affordable housing property.

probably doesnt help you but our learned vested interest on here hasnt pointed it out so I said I would.

Instead he feels its necessary to scare you into thinking that 92% LTV mortgages are as scare as a precious metal :rolleyes:

galah

Cheers guys for all your input.

We're meeting the bank now to discuss all our options, let's see what they have to say. If it doesn't work, it doesn't work, we're in no rush to buy as such (although the house we saw would be perfect).
Oh, and I don't get why I should go through a broker when I can deal with the bank directly...? Where's the sense in that?

D3PO

galah wrote: »

Oh, and I don't get why I should go through a broker when I can deal with the bank directly...? Where's the sense in that?

True, I went and met some brokers back when i was buying, they can have a vested interest as they get a set percentage on your drawdown value. (Although some banks dont pay them anymore)

all they were trying to do was push certain instituions to me despite them not being the best offers on the market and trying to get me to take out more than i needed so they could maximise their profits.

Anyway back on topic best of luck with your bank meeting.

Make sure you have everything with you P60's, Bank statements, proof of regular savings, salary certs from work and any other documentation that you think is necessary (details on your share portfolio, value of your other assets etc)

alliejo

spockety wrote: »

Interesting user name

Why are you scouting for FTBs?

are you looking for some ftb leads ??

galah

cheers, all went well, no problems. We still need the full 8 %, but we'll get that somehow...but definitely no problem getting a 92 % mortgage...

ChewChew

galah wrote: »

So what used to be 8 % is now about 5 % of the mortgage deposit....

Any opinions on that?

I got approved last week for a mortgage and have been offered 95% of the mortgage. I already had 2% deposit paid so just have to pay the 3% now so yeah, it is possible.

stepbar

As true as I'm sitting here, AIB said a 100% (yes you read correct - based on my bro's profession) FTB mortgage of 400k on a 35 year term would have been possible based on our combined income (me and my bro) - assuming no other debt and significant outgoings.

This was back in mid 2008. I just chucked to myself. Myself and the bro earned a combined income of 60k gross.

I'd love to go back and see what would be offered now.

Diairist

is this insanity? one poster offered 95, another 100%. Is this the celtic Tiger happening again? Haven't property prices further to fall? Are they being set up for negative equity?

gurramok

That was 100% in mid 2008, they don't exist anymore.

Interesting about the 95%, care to elaborate ChewChew? Bullet proof highpaying job and/or huge deposit?

It don't say on any of the banks websites that they offer 95%, wonder who does.

D3PO

gurramok wrote: »

Interesting about the 95%, care to elaborate ChewChew? Bullet proof highpaying job and/or huge deposit?

.

cant be a hugh deposit if its a 95% mortgage. the deposit could only be 5%

alliejo

The_Chopper wrote: »

Guys if you're looking to see how much you could potentially get use this site https://www.mortgages.ie/index.cfm/spKey/home.apply_online

Yeah I found them good too... they will go through everything with you

ChewChew

gurramok wrote: »

Interesting about the 95%, care to elaborate ChewChew? Bullet proof highpaying job and/or huge deposit?

It don't say on any of the banks websites that they offer 95%, wonder who does.

House is €200k. Bank giving me €190k and I already have €4k paid!