Appointment with the Bank - Questions

Kintarō Hattori

About two weeks ago I put in a call to my bank to see what kind of mortage they'd give the other half and myself. Went through a load of questions with the girl and they gave us a figure. I've an appointment with the bank tomorrow for a general chat about our options etc. We haven't formally applied just yet but we're going along to have a chat with them.

Should I bring anything along tomorrow, any paperwork etc? Also is it a shirt and tie affair or would slacks, shoes and a smart shirt be OK?

irlrobins

Bring all your docs with you. When I first approached AIB for a mortgage, they asked what I earned and offered me an amount based on that salary. I argued that it was too low considering that I had a sizeable deposit (~20%) saved, etc. I came back an hour later with copies of my savings account, salary certs, P60, etc to prove that I had a track record of saving more than what my mortgage payments would be each month. Based on this info, they upped their offer.

They will consider each application on a case by case basis so the more info you have to influence their decision the better.

Also no need to do suit and tie. Neat smart casual will suffice. Sure some of these bank officials have their shirt tails hanging out and ties undone.:rolleyes: It's your financial and not fashion state they're interested in!

faceman

^ couldnt have said it better meself!

Kintarō Hattori

One other thing I'm uncertain about folks. I'm a first time buyer myself but the missus has a small mortage in Poland that will be paid off in 3 years time. Does she need to declare that to the bank here and if so how will this affect us for stamp duty etc as I haven't bought anything.

Does this count against us both?

Victor

Potentially, you buy it in your name. It may be possible that there is a legal way for her to retain her legal interest in the amount she has contributed to the mortgage.

It would work best if you bought alone first and then if marriage was on the cards, do that only after you have bought.

If you but together or buy when married, I suspect you will be counted as not being first time buyers when it comes to Stamp Duty and Mortgage Interest Relief.

With the bank, being 3 years away from paying off one mortgage may be a bonus - you will sound like good customers.

Best have a chat with a solicitor, possibly before talking to the bank.

Kintarō Hattori

Thanks for that Victor, that was very informative. I'd love to buy it on my own but unfortunately I can't get a mortage to cover the amount hence why the other half would need to come on board.

So realistically we would have to pay stamp duty and be exempt from mortage relief? That sounds horrendous! :eek:

Victor

No, talk to a solicitor, there may be ways around it. Most new properties don't have stamp duty (you do pay VAT though, but its included in the price).

faceman

As Victor said, there are ways around it and there are banks that will allow one name to go on the deeds.

The bank will instruct your solicitor to brief your partner on the implications of that decision and she will have to sign a form saying she understand that.

Some the implications of 2 named mortgage/one named deeds that I am aware of are as follows:

* she has no legal claim on the house. In the eyes of the law, she is paying towards the upkeep of the mortgage.
* she cant claim mortgage interest relief
* in the event of a horrendous breakup, it is high recommended that neither of you involve the split of the house in the courts, if that is the path you wish to choose, as both of you could be done for tax evasion.

D3PO

Its tax evasion simple as that. No solicitor should actually help facilitate this as they could be struck off if caught.

rather than putting yourself in a position whereby you could find yourself in a serious tax hole down the line why dont you look for properties together with stamp duty exemptions i.e new build properties.

faceman

D3PO wrote: »

Its tax evasion simple as that. No solicitor should actually help facilitate this as they could be struck off if caught.

rather than putting yourself in a position whereby you could find yourself in a serious tax hole down the line why dont you look for properties together with stamp duty exemptions i.e new build properties.

its not really tax evasion if the individual not on the deeds is not claiming any relief nor makes any claim that they have any ownership over the property. Its no different, IMO, than a parent financially supporting someone to purchase a property.

D3PO

faceman wrote: »

its not really tax evasion if the individual not on the deeds is not claiming any relief nor makes any claim that they have any ownership over the property. Its no different, IMO, than a parent financially supporting someone to purchase a property.

I think your referring to somebody going gaurantor on the loan as opposed to being on the mortgage application. In that case fine but I dont think the OP is referring to that.

seems to me that its a joint mortgage application.

astrofool

It's tax avoision, perfectly legal, but with pitfalls.

D3PO

astrofool wrote: »

It's tax avoision, perfectly legal, but with pitfalls.

Im not qualified to make a judgement as to weather its tax evasion or tax avoidance but my feeling is its the former.

Forget speaking to your solicitor Id be asking an accountant where you stand first.

spockety

The revenue are clear on this.

If your missus is on the mortgage and contributing in any way financially, you are partaking in tax evasion by not paying stamp duty.

The only "ways around it" are ways which could involve the Revenue catching up with you sooner or later. And when they do, there'll be hefty fines and hefty interest. Might be next year, might be in 10 years.

faceman

spockety wrote: »

The revenue are clear on this.

If your missus is on the mortgage and contributing in any way financially, you are partaking in tax evasion by not paying stamp duty.

The only "ways around it" are ways which could involve the Revenue catching up with you sooner or later. And when they do, there'll be hefty fines and hefty interest. Might be next year, might be in 10 years.

From the revenue website:

revenue.ie wrote:

Revenue is prepared to accept that a child, who is a first time buyer, will not be precluded from claiming first time buyer relief where a parent acts as a co-mortgagor in the following circumstances-

The transfer of the property is taken in the name of the first time buyer
It is the intention of both the first time buyer and any other person that the other person is not to take a beneficial interest in the property
The other person has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase
It is not intended that the other person will be contributing to the repayment of the mortgage in the normal course
Where the four conditions set out above are satisfied, Revenue will treat the parent as effectively acting in the role of guarantor for the loan.

Consistent with the above approach, Revenue will also be prepared to treat persons other than parents of the first time buyer, who satisfy similar conditions to those set out above, as effectively acting in the role of guarantor for the loan. Their involvement in that capacity will not be treated by Revenue as precluding a claim to first time buyer relief.

Im confused by the term child tho? I dont know anyone under the age of 18 who has bought a house!

Carawaystick

Of course the mortgage in Poland might not be to buy a house, it could plausibly have been for an empty field......
Hard to understand those docs in Polish....

If you were to wait for a while, maybe you'ld be able to get the mortgage in your own name anyway.