Mortgage Requirement - 2 years full Employment?

mal1

The EBS has a requirement for mortgages that all applicants must have two years in full employment. My partner is a year back from a career break overseas so we have to wait another 12 months. Has this requirement been set by the EBS or the financial regulator (i.e. does it apply to all mortgages)? The guy from the EBS didn't know.

magentas

I don't know but BOI ask how long you have been in your current position/place of employment on their mortgage app form and the lady processing our application said "you'd want to be 2yrs in your job anyway"!

I'd imagine the criteria for any mortgage is down to each individual lender

mal1

Ok, thanks for that. The EBS suggested that the requirement may have been imposed by the regulator but they couldn't be sure.

noxqs

1 year from now the housing market is closer to the bottom. This is great news.

mal1

Well it's different for me, I've been given the chance to purchase a house from a family member for about 450,000. The house had been valued at 530,000 and 590,000 by two estate agents (4 bed detatched in Clontarf). I reckon that myself and my partner can get our hands on about 450,000 along with our savings. However, we would be pushing ourselves and she has only been working permanent for a year.

We would probably buy the house and re-sell in a number of years ( after making some small improvements). But it's a difficult one since it's hard to tell if a 4-bed detatched in this area will ever go under 450,000. In the current climate I don't know if it's a bargain, plus whether the interest rates will go to a high that will cause us some financial difficulty in the future (if we were to keep the house).

Mick990

Hey OP,

I wish you all the best with applying for your mortgage but dealing with the EBS be very careful .

My partner and I applied with them before Xmas . We are both in full time employment and have svings of €35000. THey gave us our approval in principle on Jan 19th for €210,000 at 90%. Within 2 weeks we had our house picked and only required a mortgage for €171,000 so we taught everything was ok.

Then every time i rang the lad in the bank kept telling me he heard nothing back and kept putting me off until April when he finally told me that they had come back to say they were only offering us 80% take it or leave it.

He even told me there was a chance that if i accepted that they might come back with 75%

I am not happy

Mick990

Sorry that was a little off point but the manager in the EBS told me that the financial regulator is setting all new terms and conditions on the applications and there not happy because there hands are being completely tied

gurramok

EBS not happy? Tough! They are broke with taxpayers money being pumped into them to keep them afloat. EBS like other financial institutions have to be more prudent in their lending in future.

mal1

Mick990 wrote: »

Sorry that was a little off point but the manager in the EBS told me that the financial regulator is setting all new terms and conditions on the applications and there not happy because there hands are being completely tied

Thanks for those comments Mick. It sounds like we won't be able to get the mortgage for the house anyway. The EBS suggested that the financial regulator had imposed these conditions. I'm still waiting to hear back from my broker in relation to this matter and BoI and AIB.

mal1

Just to let people know that the requirement is still 6 months for most banks (broker got back to me yesterday)

magneticimpulse

noxqs wrote: »

1 year from now the housing market is closer to the bottom. This is great news.

Actually talk is, its 7 years from the bottom!

whippet

mal1 wrote: »

Well it's different for me, I've been given the chance to purchase a house from a family member for about 450,000. The house had been valued at 530,000 and 590,000 by two estate agents (4 bed detatched in Clontarf). I reckon that myself and my partner can get our hands on about 450,000 along with our savings. However, we would be pushing ourselves and she has only been working permanent for a year.

We would probably buy the house and re-sell in a number of years ( after making some small improvements). But it's a difficult one since it's hard to tell if a 4-bed detatched in this area will ever go under 450,000. In the current climate I don't know if it's a bargain, plus whether the interest rates will go to a high that will cause us some financial difficulty in the future (if we were to keep the house).

I can't believe my eyes reading this post !!!!! we are at least 12 to 24 months away from any sort of bottom of a huge property crash, probably another 20-30% to go and you are talking about flipping a property ??????

When the bottom is reached eventually the rise in prices will be nothing like those seen in recent years ...... buy the house as a home not as a capital investment to be realised over the next couple of years ...

3DataModem

mal1 wrote: »

However, we would be pushing ourselves and she has only been working permanent for a year.

mal1 wrote: »

We would probably buy the house and re-sell in a number of years ( after making some small improvements).

mal1 wrote: »

In the current climate I don't know if it's a bargain.

OP. Re-read the above three statements. Then re-read them a few more times. Then read on.

EVEN IN A BULLISH MARKET YOU SHOULD NOT PURCHASE UNDER THESE CIRCUMSTANCES.

Why?...

INTEREST RATES ARE HISTORICALLY LOW. EVEN IF THE HOUSE IS A BARGAIN, IF YOU CAN BARELY AFFORD TO PAY FOR IT NOW YOU WILL NOT BE ABLE TO AFFORD IT WHEN INTEREST RATES GO UP. SO IF YOU CANNOT SELL IT AT THAT POINT, YOU WILL LOSE IT.

mal1

The last two posts are valid and I've taken this sort of advice on board. I'm not going to take up the offer of the house.

However, I was considering it when it was offered at first. We hadn't been interested in buying but the house had been valued at the 1million mark during the boom (the doctor living next door paid 1.2million for his), so I thought it was worth considering.

whippet

mal1 wrote: »

The last two posts are valid and I've taken this sort of advice on board. I'm not going to take up the offer of the house.

However, I was considering it when it was offered at first. We hadn't been interested in buying but the house had been valued at the 1million mark during the boom (the doctor living next door paid 1.2million for his), so I thought it was worth considering.

what a house was worth a couple of years ago was not reality. Take about 70% off boom prices to get even close the actual value

djmcr

mal1 wrote: »

during the boom

It wasn't a boom, it was a bubble which has burst

mal1

djmcr wrote: »

It wasn't a boom, it was a bubble which has burst

What purpose has that comment got in this forum? and you actually got a thanks from someone

3DataModem

mal1 wrote: »

What purpose has that comment got in this forum? and you actually got a thanks from someone

i think the distinction is very important. A boom implies rapid intrinsic economic growth. A bubble implies an artificially propped up market not necessarily related to economics.

e.g. the dot com bubble was a bubble... stocks overbaught on margin irrespective of the fundamental economics of the stocks.

Ireland had a boom alright, but property had a bubble.

tanyabond

mal1 wrote: »

What purpose has that comment got in this forum? and you actually got a thanks from someone

I got a giggle from that:) I do agree it doesn't matter what to call it and it's not to the point here, but the thing about someone saying thanks for that was way too funny:) Although I know they didn't actually thank, but rather supported this view.

tanyabond

3DataModem wrote: »

i think the distinction is very important.

It surely isn't that important when someone is trying to figure out mortgage requirements?:)

mal1

3DataModem wrote: »

i think the distinction is very important. A boom implies rapid intrinsic economic growth. A bubble implies an artificially propped up market not necessarily related to economics.

e.g. the dot com bubble was a bubble... stocks overbaught on margin irrespective of the fundamental economics of the stocks.

Ireland had a boom alright, but property had a bubble.

I haven't fallen from planet Fianna Fáil, I obviously know the difference. I'm just saying that the comment has no place in this thread. It's not helping me in regards my mortage query.

Oh wait a second, maybe it's not a query???? Maybe it's a question since a query implies that i'm doubting something...but i'm not doubting something, i'm asking a direct question...maybe I'll wait around and someone will correct me on this too!

3DataModem

tanyabond wrote: »

It surely isn't that important when someone is trying to figure out mortgage requirements?:)

That's not all the OP talked about. He also talked about "value" and "reselling in a few years" and "don't know if its a bargain". See below

In that context the distincion between "boom" and "bubble" is very important.

mal1 wrote: »

Well it's different for me, I've been given the chance to purchase a house from a family member for about 450,000. The house had been valued at 530,000 and 590,000 by two estate agents (4 bed detatched in Clontarf). I reckon that myself and my partner can get our hands on about 450,000 along with our savings. However, we would be pushing ourselves and she has only been working permanent for a year.

We would probably buy the house and re-sell in a number of years ( after making some small improvements). But it's a difficult one since it's hard to tell if a 4-bed detatched in this area will ever go under 450,000. In the current climate I don't know if it's a bargain, plus whether the interest rates will go to a high that will cause us some financial difficulty in the future (if we were to keep the house).

3DataModem

mal1 wrote: »

I haven't fallen from planet Fianna Fáil, I obviously know the difference. I'm just saying that the comment has no place in this thread. It's not helping me in regards my mortage query.

You were the one who started talking about "value" and "reselling" and "bargain". In that context I think the distinction between a boom and a bubble is very important.

If you only want to know whether you CAN get a mortgage then the answer is "probably not", as above.

If you want to know WHY then the answer is "probably because you can't afford it now, and won't be able t afford it in the future.

If you want to know SHOULD you get this mortgage then "probably not" for the reasons posted in the thread above.

3DataModem

mal1 wrote: »

The EBS has a requirement for mortgages that all applicants must have two years in full employment. My partner is a year back from a career break overseas so we have to wait another 12 months. Has this requirement been set by the EBS or the financial regulator (i.e. does it apply to all mortgages)? The guy from the EBS didn't know.

And to answer your first question:
> The 2 year requirement has NOT been set for all banks by the regulator.

mal1

I didn't ask for advice regarding the house. I was just giving some background since a poster had said that it was good news that I couldn't get a mortgage and had to wait a year (because the property market was going to bottom out in a year or two).

The background clarified the fact that the house was being offer at least 100,000euro under the valuation. Then I got some rants back (in capitial letters for some reason) regarding buying a house and reselling etc. I took the posts on board even though the poster/s didn't take into consideration the fact that the house sale was a bilateral one between myself and the owner at a reduced price (about 20% below market value). I was explaining the decision I had to make, i.e. would the market fall more than 20% in the coming years

By the way, i can afford it and would be able to afford it but i'd miss out on those holidays and maybe an extra child or two over the next 5-7 years. Something I value more than a detached beside the sea.

Anyway, I got the answer (about 7 days ago from the broker).

tanyabond

3DataModem wrote: »

That's not all the OP talked about. He also talked about "value" and "reselling in a few years" and "don't know if its a bargain". See below

In that context the distincion between "boom" and "bubble" is very important.

Ok, I only read the original post so it does have relevance to what was said further on.

mal1

It's nitpicking but I disagree and still stand behind the fact that the comment added no value to the discussion. My use of the word 'boom' was relevant to the description of a period time in Ireland and I was not trying to explain the economics behind the property market in the past. If I was then I might be a little more careful with my choice of words. That is my point. It's obvious to everyone that it was a bubble and not a boom. Look in the papers and you will still see the word 'boom' or 'boomtime' used to describe that era.

Either way, it really doesn't matter. We'll just have to agree to disagree.

donalg1

To answer the original question, whichever lending institution you go to you will most likely be required to have been in full time employment for at least two years (principal earner).

You should be looking at mortgage repayments of no more than 30% your monthly income any higher than this and you can forget it and should forget it.

highgiant1985

donalg1 wrote: »

To answer the original question, whichever lending institution you go to you will most likely be required to have been in full time employment for at least two years (principal earner).

You should be looking at mortgage repayments of no more than 30% your monthly income any higher than this and you can forget it and should forget it.

is that 30% of nett or gross? should be ok for both but obv looks better % wise if its of gross :P

donalg1

30% of gross, well gross minus any car loans, maintenance, etc...

testicle

mal1 wrote: »

Well it's different for me, I've been given the chance to purchase a house from a family member for about 450,000. The house had been valued at 530,000 and 590,000 by two estate agents (4 bed detatched in Clontarf). I reckon that myself and my partner can get our hands on about 450,000 along with our savings. However, we would be pushing ourselves and she has only been working permanent for a year.

Don't worry, next year you can buy it for 350000.