Do I have any chance of getting a 95% mortgage???

xoxyx

We had a bank-at-work day last week and I spoke briefly to a mortgage adviser about getting a mortgage. Taking my salary into account and the fact that I have no loans or dependants, I was told initially that I could get about €180,000 (and maybe it could be bumped up to €182,000).

Then, this week, I went into the bank (BOI) to apply formally for mortgage approval. I gave the, very nice, bank person my P60 which shows that I made €3,000 extra in overtime last year and I explained that I should make the same this year. I also said that if I got a two bedroom place I'd be willing to rent out a room and that I just wanted as high an approval as possible. I told her too that I currently pay €920 a month in rent, and a mortgage (plus mortgage relief, minus insurance, etc.) for the amount I want to borrow would be about €620 a month.

I was told that the overtime couldn't really be taken into account as it's not secure enough, and the Rent a Room Scheme really only acted as security. However, I was still allowed to apply for a €200,000 mortgage, which will hopefully be approved early next week.

Now I have seen a place that I really love going for €199,950. I have savings of about €10,000 - mostly due to an inheritance - otherwise, I could never have saved that much.

Anyhow - €10,000 would pretty neatly make up 95% of the property price. I work in a law firm so my solicitor's costs are covered, and I'm sure I could make up the rest of the incidentals.

What I was wondering is, seeing as how the bank is willing to stretch the amount they can loan me, would they be willing to stretch the percentage then can loan me to 95% rather than 92% - especially seeing as how it's for such a small amount? I'd be looking for a loan of €190,000, when I can get approval for €200,000. I know they have rules, but am wondering just how set in stone they are.

Any advice or relevant experience appreciated.

P.S. - I am so excited to think I could be buying my own place soon!

am i bovvered

Why would you put an offer of the asking price in, its a buyers market, the house will not sell for €199,950. It will go for less, (no doubt some here will tell you its only worth 99,000) put in a low offer and go from there. good luck.

rcdk1

Generally i think banks have gone back to 92% as standard.

Anyway, I agree with am i bovvered. Put in an offer way below the guide, €150k or less. Don't be embarrassed going in with a low offer because:

1. The estate agents milked us for long enough and they deserve everything that's coming to them
2. they know that these days they have to consider every offer

Oliver1985

Dont think you would get it!! Seems its 92% everywhere unless you were to apply for the affordable housing scheme and get a 100% affordable home mortgage!!

xoxyx

The thing is - I know I could wait a bit longer and most likely get somewhere better for better value... But, this place is good value for what it is. There's nothing in the same area for the same size selling for as little. And, a big plus for me, it's a top floor apartment. There are places nearby selling for more than this one and on ground or first floors which means more noise. I really think I'm getting a good deal. And yes, in a few months' more time I may be able to get better for less, but I honestly don't think I could get much better for much less.
And it really speaks to me. When you're planning on buying you look around and you see nice places, but I fell in love with this place within minutes. I can already imagine myself doing so many things with it. It's exactly what I would have described myself in for the next five years or so, after which I can think about renting it out or selling it.

Klingon Hamlet

Watch out for apartment management fees. I've heard they can rise without much warning. Also do take into account that interest rates are at arecord low, so expect to pay more astime goes by. Finally, it does sound like you love the place, so best of luck---do haggle the price. The only thing better than buying your dream home is doing so at a mega bargain price.:D

Best of luck!

Tech3

Would it not be worth waiting another 2-3 years and have some savings built up and eventually ending up in less negative equity? House prices are dropping for the last 2 years and will continue to do so for the next few years.

Also offer considerably less than the asking price. Do you have a link to that house you were looking at? It might be worth 120K to 140K in the next year or two.

If you dont mind me asking what is your gross salary if your applying for a 95% mortgage?

Oliver1985

z_topaz wrote: »

The thing is - I know I could wait a bit longer and most likely get somewhere better for better value... But, this place is good value for what it is. There's nothing in the same area for the same size selling for as little. And, a big plus for me, it's a top floor apartment. There are places nearby selling for more than this one and on ground or first floors which means more noise. I really think I'm getting a good deal. And yes, in a few months' more time I may be able to get better for less, but I honestly don't think I could get much better for much less.
And it really speaks to me. When you're planning on buying you look around and you see nice places, but I fell in love with this place within minutes. I can already imagine myself doing so many things with it. It's exactly what I would have described myself in for the next five years or so, after which I can think about renting it out or selling it.

Where you looking at O.p if you dont mind me asking?

xoxyx

My gross is €36,500 - and I normally make about an additional €3,000 working evenings and weekends. The place I'm looking at is in D.8 - an established apartment block - and, another thing I really like about this place is that it's overlooking the courtyard - so no street noise. Plus, it comes furnished - it has been rented for the last few years so the furniture isn't new - but I still think it's great - being a first time buyer, it eases the pressure on me to buy a bed, soft, kitchen table and chairs, etc. straight away.

Oliver1985

Im sort of in the same boat as yourself !!! Its frustrating!!! But they are only coming down!!

Electric Sheep

z_topaz wrote: »

It's exactly what I would have described myself in for the next five years or so, after which I can think about renting it out or selling it.

If you buy it now at the asking price you are probably going to be in such negative equity in five years that you will not be able to sell it. So unless you see yourself happy there for at least 10 years, don't do it.

Tech3

I wouldn't rush into buying it OP. IMO 200K is expensive for any apartment regardless of where it is. If you like it, I would offer 140K, see where you would go with that.

The place you are renting is €950 and I see similar 2 bed apps are going for that rental in D8.

As a rule of sanity: 950*11*14=146K

I wouldn't pay above 150K for this. Also remember to calculate your mortgage repayments at max possible interest rates in the future. Your mortgage repayments may very well likely match the amount you are renting at in 2-3 years.

AARRRGH

z_topaz wrote: »

this place is good value for what it is.

z_topaz wrote: »

The place I'm looking at is in D.8 - an established apartment block

200k for an apartment in Dublin 8?

By all means buy it, but it most definitely is not value -- seriously, stop comparing current prices to bubble prices!!

If you buy it for 200k expect to have made a 50k - 80k loss within 1 - 2 years.

tech2 wrote: »

I wouldn't rush into buying it OP. IMO 200K is expensive for any apartment regardless of where it is. If you like it, I would offer 140K, see where you would go with that.

The place you are renting is €950 and I see similar 2 bed apps are going for that rental in D8.

As a rule of sanity: 950*11*14=146K

I wouldn't pay above 150K for this. Also remember to calculate your mortgage repayments at max possible interest rates in the future. Your mortgage repayments may very well likely match the amount you are renting at in 2-3 years.

Agreed, although I still think 146k is too much. 2 bedroom apartments are currently renting for 1000 - 1150 in Temple Bar, so the OP would be lucky to get 950 in the current climate, nevermind in a few years after mass emigration.

Oliver1985

Yeah but when is this 50k-80k drop gonna happen???

AARRRGH

Oliver1985 wrote: »

Yeah but when is this 50k-80k drop gonna happen???

Well the apartment is currently about 50k overpriced, so if he pays 200k for it he will immediately have made a 50k loss.

The next few years for Ireland are just going to get worse and worse. I cannot see where any good news is going to come from. I actually see us returning to a 1980's economy for perhaps 10 or 20 years.

If you consider the massive debt our country is taking on, the tax revenues lost through pay cuts and redundancies, mass emigration, and the eventual exodus of the multinationals, nevermind the oversupply of housing... our housing market is going to utterly collapse.

gurramok

OP, is there a few for sale in the block or neighbouring blocks?

You've gotta figure out also whats the market like in the area to help you haggling. 2beds for 200k is bad value, haggle it down.

D3PO

if you need 95% you cant afford it simple as.

Stop comparing what your current mortgage payment will be versus what you pay in rent.

Expect your mortage payments will double in the next few years once interest rates rise.

_Kooli_

D3PO wrote: »

if you need 95% you cant afford it simple as.

Stop comparing what your current mortgage payment will be versus what you pay in rent.

Expect your mortage payments will double in the next few years once interest rates rise.

Or fix for 5 or 10 years.

rugbyman

when you have your mortgage approval OP, you are king of the road. Walk into any estate agent and you will be treated regally. Seriously though, offer even less than you think is low. from reading your posts you are not that sort, so bring an advisor along,

bargains are there,

by the way, NEVER fall in love with a property

Good Luck,Rugbyman

Colonel Sanders

rugbyman wrote: »

NEVER fall in love with a property

Absolutely, there's plenty for sale out there!

cml387

Can you see yourself living there for ten years?
Do you intend to get married,have a family?

Think very carefully.