So, I wanna become a first time buyer

ChewChew

Well as the title says.

I've been viewing a few houses and have put my name down on one to hold it with the estate agent untill I get mortgage approval.

My big big big questions are, as I am totally new to all this and I dont know who else I can ask:

1) If the property was worth say €300,000 would a bank give me the full amount or will they only give me a percentage and I have to cough up the rest?

2) If the property was worth say €300,00 and the bank told me I could only have €290,000 and I have to pay out the €10,000 myself could I actually apply for a mortgage of €310,000 to cover this?

I'm a little confused because I really dont know if I would have the full amount if they are looking for a percentage of the mortgage if you get me?

Anyways, any advice on the above or for a first time buyer doing this on her own would be hugely appreciated!

(apologies if you guys have had threads like this a million times over, I couldn't find an old one )

mikemac

Whereabouts in the country are you buying?

MysticalSoul

You will only get a % of the value of the property, and no you cannot ask for a mortgage for a higher value of what it is worth, as in the current climate, the way the bank would see it, is that there would be an increased risk of you defaulting on repayments, regardless of your credit rating.

Banks are no longer giving out mortgages of 100%, so you would need the balance % in savings yourself.

Dirk Gently

92% is currently the best offer I think, which means the bank would lend you 92% of the €300,000 and you would need to have 8% saved yourself. I know of a couple of developments with mortgage schemes where you give an initial holding deposit and another signing deposit totalling 10k. There's also rent to buy schemes and affordable housing.

You'll have to convince the bank that you can actually afford the monthly repayments on top of having the 8% saved. Remember interest rates will rise significantly shortly into your mortgage, potentially adding 100's of euro to your monthly repayments.

I'd suggest you talk to someone in more detail, doesn't sound like you've thought this through going by your post tbh. At the rate prices are dropping it wouldn't do any harm to wait a while and build up your savings.

ArphaRima

First off. You're mad. Prices are still declining. Wait. There is no rise forecast yet. Vested interests keep saying its as low as it can go and you should buy now, but yet the prices keep falling. Be patient. Rent.

Secondly. Only those trained and steadily employed in classic professional posts will get 100% mortgages: ie lawyers, solicitors, doctors, pilots, accountants etc. Banks have given them 100% mortgages for many years, and still do.

Dob74

You'll be able to borrow 92%. So you will have to have 24000 for a house worth 300,000.
Personally i wouldnt buy right now

ChewChew

Thanks a mill guys. this is just something at the back of my head. Am thinking about the affordable housing scheme so not 100% sure whats happening just yet!

D3PO

fluffer wrote: »

Banks have given them 100% mortgages for many years, and still do.

what banks are still giving 100% as far as i know they have all removed these products from the market ?

D3PO

ChewChew wrote: »

Well as the title says.

I've been viewing a few houses and have put my name down on one to hold it with the estate agent untill I get mortgage approval.

My big big big questions are, as I am totally new to all this and I dont know who else I can ask:

1) If the property was worth say €300,000 would a bank give me the full amount or will they only give me a percentage and I have to cough up the rest?

if you havent got a significant deposit saved your unlikely to be able to afford to buy a house as it indicates you live month to month and can only get by with where you are renting

remember rates are at an all time low. you have to consider that its likely whatever the mortgage payment would be now will be 50% higher in the coming years

jape

D3PO wrote: »

if you havent got a significant deposit saved your unlikely to be able to afford to buy a house as it indicates you live month to month and can only get by with where you are renting

remember rates are at an all time low. you have to consider that its likely whatever the mortgage payment would be now will be 50% higher in the coming years

If that, some economists are predicting the ecb base rate to rise to 9% by 2012. It is at 1.75% now and you won't start paying off the capital of the mortgage for years so, your repayments could potentially rise over 4-fold in the next few years if on a variable rate.

Senna

jape wrote: »

If that, some economists are predicting the ecb base rate to rise to 9% by 2012. It is at 1.00% now and you won't start paying off the capital of the mortgage for years so, your repayments could potentially rise over 4-fold in the next few years if on a variable rate.

FYP


OP from the sounds of it, you dont know the first thing about buying, which leads me to believe you will make a horrendous mistake by buying now.
When you say you have a house on hold (Ha Ha, EA's are getting desperate), Have you agreed a price? something near asking price?

My advice, read every post in this forum on buying and the market, then read every post on www.thepropertypin.com then when your finished, continue renting.

gurramok

OP, you will need 8% deposit of the total price first before you be even considered for a mortgage, thats 24k for a house.(more for an apt)

Also, banks base the amount they loan on so that you(ye) won't be forking out more than 35% of net (take home) pay on a mortgage.

oceanclub

ChewChew wrote: »

Thanks a mill guys. this is just something at the back of my head. Am thinking about the affordable housing scheme so not 100% sure whats happening just yet!

The affordable housing scheme is a dead duck ever since the real market value of property dropped below the AHS selling prices.

P.

simonbyrneno.4

Hey guys,

Me and my girlfriend put down a deposit on a house this week on a house in Wicklow but I'm concerned about actually being approved for the mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

spockety

simonbyrneno.4 wrote: »

Hey guys,

Me and my girlfriend put down a deposit on a house this week on a house in Wicklow but I'm concerned about actually being approved for the mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

:eek:
:eek:
:eek:

simonbyrneno.4

spockety wrote: »

:eek:
:eek:
:eek:

it's fully refundable! What do you think our chances are

oceanclub

"We have basically been living from pay cheque to pay cheque, "

Is your mortgage higher than your current rent? Have you factored in both the coming tax raises _and_ interest rates increasing?

P

D3PO

simonbyrneno.4 wrote: »

Hey guys,

Me and my girlfriend put down a deposit on a house this week on a house in Wicklow but I'm concerned about actually being approved for the mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

You have no chance at all.

D3PO

simonbyrneno.4 wrote: »

Hey guys,

mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

why woudl you even contemplate buying even if the banks would lend you the cash which 110% wont happen. this is wreckless beyond belief you cannot afford to buy.

oceanclub

simonbyrneno.4 wrote: »

it's fully refundable!

Why would a developer be accepting deposits that can be fully refunded?

P.

Senna

oceanclub wrote: »

Why would a developer be accepting deposits that can be fully refunded?

P.

I'm guessing he means booking deposit, so yes fully refundable.

Fighting Irish

simonbyrneno.4 wrote: »

Hey guys,

Me and my girlfriend put down a deposit on a house this week on a house in Wicklow but I'm concerned about actually being approved for the mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

lol

simonbyrneno.4

D3PO wrote: »

why woudl you even contemplate buying even if the banks would lend you the cash which 110% wont happen. this is wreckless beyond belief you cannot afford to buy.

So I'm guessing you guys don't think we will get it? But we've done out budgets and such things that show that we can afford it. What factors do banks take into consideration when going through a mortgage application?

gurramok

simonbyrneno.4 wrote: »

So I'm guessing you guys don't think we will get it? But we've done out budgets and such things that show that we can afford it. What factors do banks take into consideration when going through a mortgage application?

Job security(have you worked full time for the last year) and those loans.

Loans reduce the amount of potential mortgage they will give you as i said earlier:
"banks base the amount they loan on so that you(ye) won't be forking out more than 35% of net (take home) pay on a mortgage. "

simonbyrneno.4

gurramok wrote: »

Job security(have you worked full time for the last year) and those loans.

Loans reduce the amount of potential mortgage they will give you as i said earlier:
"banks base the amount they loan on so that you(ye) won't be forking out more than 35% of net (take home) pay on a mortgage. "

I'm still only part time and my girlfriend is only full time for the past 9 months. The mortgage works out to be under the 35% of our monthly average pay but that isn't taking into account the likelyhood of tax rates or interest rates increasing.

irlrobins

Is your gf on probation currently? Is she permanent?

From the information you've given to date I don't think a bank will offer what you're looking for. They're very restrictive with their lending in the current climate.

simonbyrneno.4

irlrobins wrote: »

Is your gf on probation currently? Is she permanent?

From the information you've given to date I don't think a bank will offer what you're looking for. They're very restrictive with their lending in the current climate.

She's been made permanent recently. How long does it take to get an answer from the bank normally? I don't really blame the banks being so tight with lendin in the current enviroment

irlrobins

Turn around time is pretty quick, usually less than 5 days. Provided of course that you've given them all the required docs (pay slips, P60s, proof of savings, etc).

Eglinton

Simon, I'm sorry to have to say but ye are in no position to buy a house for that amount at this point. You simply don't meet the sort of criteria banks require these days. Your part time job and those loans will mean a certain 'no' within 5 minutes of meeting the bank manager.

According to BoI's mortage calculator, even if ye did get a mortgage, your combined salary would entitle ye to a maximum of 162K.

The fact that your combined salary is only 36K is a little worrying. It's highly likely that the banks wouldn't even consider you as you're only part time so presumably your other half is making a lot less than 36K which means she could only get a much smaller mortgage.

My advice is to keep saving, clear those loans (and don't take out any more loans!!), and get a permanent job. There's no rush! Houses will be falling for a long time. If you're looking at a house that's asking 200K, then presumably it's well away from Dublin and likely to plummet even faster.

Moonbeam

simonbyrneno.4 wrote: »

Hey guys,

Me and my girlfriend put down a deposit on a house this week on a house in Wicklow but I'm concerned about actually being approved for the mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

Congrats.
36k is not a very high income and the loans will really go agains't you.
The rule of thumb is wages x 4 not sure if it still works so in your case 144k
92% is the highest mortgage that anyone gives now but they may not offer you this much.
Is it a new house?I think you will be lucky to
If they give it they will most probably want a guarantor but I think with those wages and the current climate that you do not stand a chance esp not with loans and so little savings.

snaps

House prices here in Mayo have really slumped (Town i live in has over 200 propertys on daft). Im waiting to buy now, but really need some sort of advice when we reckon prices will be at their lowest. Ive heard about people making stupid offers on empty houses and getting a deal done (Some estates in my town dont have 1 house occupied and asking prices have dropped nearly 40%)

D3PO

simonbyrneno.4 wrote: »

I'm still only part time and my girlfriend is only full time for the past 9 months. The mortgage works out to be under the 35% of our monthly average pay but that isn't taking into account the likelyhood of tax rates or interest rates increasing.

35% of your montly income now maybe. tack on the extras in terms of expense.

life assurance, house insurance etc etc, then tack on the property tax that is coming i the next budget, then tack on the increased taxes,

then tack on 50% increase to the mortgage payment when interest rates rise. your 35% soon becomes 70 - 80% of your take home pay that is not affordable.

NO WAY NO HOW

Fighting Irish

snaps wrote: »

House prices here in Mayo have really slumped (Town i live in has over 200 propertys on daft). Im waiting to buy now, but really need some sort of advice when we reckon prices will be at their lowest. Ive heard about people making stupid offers on empty houses and getting a deal done (Some estates in my town dont have 1 house occupied and asking prices have dropped nearly 40%)

Its simple just wait, if and when they hit their lowest they won't shoot back up over night

JuliusCaesar

simonbyrneno.4 wrote: »

Hey guys,

Me and my girlfriend put down a deposit on a house this week on a house in Wicklow but I'm concerned about actually being approved for the mortgage. We have basically been living from pay cheque to pay cheque, we've got a combined annual salary of about 36k as I'm a college grad still just working part time. The property is valued at 200k but we have the full 8% of 16k so were only looking for a mortgage of 184k. But we both have personal loans small ammounts each month but still. What chance do you'd think we have of being approved

Don't forget you'll need about 2K for legal, survey, and other costs.
Will you be liable for Stamp Duty?
You'll need to furnish the house too.
Then on a regular basis there's buildings and contents - house insurance.
Mortgage/life insurance - if either of you die, the mortgage will be paid off. (Banks insist on this, for their own protection)
What happens if you and your girlfriend break up? Some info here

jenzo

Hi
A few questions re: mortgage applications. I have a 3rd share in a house at the present moment and wishing to buy a house with my boyfriend. The share is worth approx €50k. We applied to AIB for 270k for the new house and were declined basicly because of my share.
What other banks are giving out mortgages? We have a joint income of approx €75k and willing to apply for a smaller mortgage and rough it if necessary.
Thanks!

ntlbell

jenzo wrote: »

Hi
A few questions re: mortgage applications. I have a 3rd share in a house at the present moment and wishing to buy a house with my boyfriend. The share is worth approx €50k. We applied to AIB for 270k for the new house and were declined basicly because of my share.
What other banks are giving out mortgages? We have a joint income of approx €75k and willing to apply for a smaller mortgage and rough it if necessary.
Thanks!

go to a broker?

gamer

BE aware interest rates are likely to rise by 2percent at least so can you afford it if your mortgage cost go, s up by 400 euro per month.

Victor McDade

snaps wrote: »

House prices here in Mayo have really slumped (Town i live in has over 200 propertys on daft). Im waiting to buy now, but really need some sort of advice when we reckon prices will be at their lowest. Ive heard about people making stupid offers on empty houses and getting a deal done (Some estates in my town dont have 1 house occupied and asking prices have dropped nearly 40%)

You can relax. The property market revival, when it finally happens (still a few years away in my opinion), isn't going to start in a small town in Mayo.
If you don't NEED to buy, why not wait and pay maybe €10,000 over whatever price eventually turns out to be "rock bottom"? It'll still save you more than that if you buy now, and you'll be in a better position to see how much a house will cost you with interest rates etc.

alphamale 1

snaps wrote: »

House prices here in Mayo have really slumped (Town i live in has over 200 propertys on daft). Im waiting to buy now, but really need some sort of advice when we reckon prices will be at their lowest. Ive heard about people making stupid offers on empty houses and getting a deal done (Some estates in my town dont have 1 house occupied and asking prices have dropped nearly 40%)

Houses prices havent dropped as you reckon. While some towns in Ireland may be selling houses at knock down prices, not all are. I reckon as long as the developer has not fully completed the estate then things should be ok at some stage as the worst thing any developer could do is finish out an estate. Some estates around the country are left in an awful state. The main thing is that people can afford to hold out from selling now and that they can keep their jobs.

Where is mayo are you talking about?.

stevie.enright

Simonbyrneno.4 I would be thinking that a bank would look negatively on the fact that the couple applying are not married and are only boyfriend and girlfriend.... I do stand to be corrected there though. Aside from this have you thought about what may happen if ye did take out a mortgage and did break up? It could get very messy. Now please don't take that the wrong way, I obviously don't know know the details of your relationship but I and friends have being in great relationships in the past anf broken up a few weeks later. No disrespect intended towards you or your girlfriend though so please don't take it that way.

stevie.enright

Regarding prices I'm not so sure if they are dropping much/ dropping at all in certain areas. I myself am looking to buy in the Limerick city area as a FTB. I did view a number of properties six months ago (allbeit only half interested and just to see what was out there). All were around the 200k mark or little over and they all seemed to represent fairly good value for money. However, these properties are no longer listed on daft.ie or myhome.ie so I assume they have being withdrawn from the market or sold. Browsing through the websites presently most similar houses seem to be listed at, at least 40k more. Now you would imagine that with the departure of dell that prices would have taken a bit of a hammering but this does not appear to be the case. Perhaps I have not being looking at the market long enough to be making judgement calls on prices though

Another little bit of a scenario surrounding my own situation also. Around the same time I was doing the house hunting I went into the bank seeking mortgage approval. I have savings of present value over 95k (some of which are invested in a fund which has taken a beaten and I would expect to pick up again). I am on circa 34k per annum with non contributary pension and VHI. I presented my salary certificate to bank manageress along with details of my savings and she was well impressed and approved me in principal for up to 240k. I told her I don't necessairly intend to buy in the immediate future and asked her should I seek my mortgage approval to be reviewed every few months. She told me absolutely no need in the world and to call in when I see a house I intend to buy. This does not really tie into what other people tell me and a lot of folk told me I should get it updated every few months. Who is right? I do hold a high proportion of my savings with the bank in question if this makes a difference but what if I wanted to take out the mortgage from a different lending institution?

Just my own thoughts...Am keeping an eye on prices and if something good represents itself I might pounce but if not and even assuming prices dont go down much I would buy in 2-3 years time at which point I would expect to have around 140k saved hopefully (most likely most of the capital value). Would/ can banks refuse to give small mortgages (say 60k) or would they be inclined to penalise somebody in such a situation to make as much money as possible out of them? I have heard of people going for small mortgages (and in a few cases not so small) and banks trying to insist that they borrow more but this was more in the silly times of 2005/ 06.

Fighting Irish

Its not even funny how much prices are going to drop in the coming years