Up to 80k mortgage for a couple?

ShadowHearth

Hello. I would love to know if it is even possible to get a mortgage. We are first time buyers so our knowledge of this is not the best. Just wanted to know your opinion, if we would have a chance of getting a mortgage.

Prices went down alot. It looks like there is a chance for us to have our own little house/apartment. We are not looking for castle. There are quit few properties in a range of 50k to 80k which is pretty amazing for us! So here it goes:

Me and misses bouth foreigners living in Ireland for 6 years.
We have been working pretty much since day one all 6 years. Newer had any doles or reliefs from goverment.

I am working almost 3 years in same position, misses 4 years.

As first time buyers we can go for 92% mortgage? We got little bit over that 8% which is needed.

I used Internet banking to pay rent (650eu) each month. So bank cam trace that with no problem I guess. They said that was pretty important to show...

We had 2 loans before. 2k and 5k which are bouth repaid with no penalties etc.

Would we still have a chance to get mortgage for a property worth 70-80k? Or we are way off tue chart, and bankers will just lought in our faces?

I know it's not much, but we were allways stable with jobs, repellents and income in to accounts. Even so getting a mortgage for such house will end up with way smaller repayments then we pay for rent now!

Thx for all your thoughts! Sorry about spelling mistakes, I am not that good at it!

blah

have you tried something like the Bank Of Ireland Mortgage Calculator?

The best thing to do is talk to your bank.

D3PO

on the face of it you are a good candidate but banks will pick holes in any applications right now.

What industries to do you work in ? If there is a chance you might be in what they deem an unstable industry they will probably refuse.

Are you an EU citizen or here on a work permit ? If your on a work permit they probably will use this against you as losing your job could lead to you having to leave the country.

Have you any outstanding debt ? Credit card debt for example if so this may go against you.

the obvious one is what are you taking home in pay between you ? Just becasue you can afford your current rent doesnt mean the banks will be happy to accept you could afford a mortgage of similar payments. Realistically they will have a repayment to net income ratio that they will aceept and above that they will refuse.

Finally is it financially a viable option for them. Such a small mortgage and the profit associated with it may not make financial sense for a bank to take on given the overheads they would have on such a mortgage. If you assumed they were making 2% margin on the money would that cover the annual overheads ? Probably not.

PCPhoto

also something to watch ...if you have any online gambling transactions on your bank statements...the bank will claim you are liable to gamble and at a high risk and deemed unsuitable for a mortgage.

from what you have posted ... you should qualify for a mortgage (depending on your salaries)..... but do you need to purchase a property now or is it because you would rather own than rent as the money feels like a dead investment ?

I rent at the moment and prefer to rent because it allows me the flexibilty to move country if I feel the need or want to get out of Ireland....my work allows me to be flexible and I feel like I should be able to change countries easily enough.

Property prices in Ireland will continue to drop lower and lower for the next number of years - so it might be worth continuing to rent and saving as much money as possible (maybe even enough to purchase the house with your own money)...2, 3, or maybe even 5years from now.

ShadowHearth

D3PO wrote: »

on the face of it you are a good candidate but banks will pick holes in any applications right now.

What industries to do you work in ? If there is a chance you might be in what they deem an unstable industry they will probably refuse.

Are you an EU citizen or here on a work permit ? If your on a work permit they probably will use this against you as losing your job could lead to you having to leave the country.

Have you any outstanding debt ? Credit card debt for example if so this may go against you.

the obvious one is what are you taking home in pay between you ? Just becasue you can afford your current rent doesnt mean the banks will be happy to accept you could afford a mortgage of similar payments. Realistically they will have a repayment to net income ratio that they will aceept and above that they will refuse.

Finally is it financially a viable option for them. Such a small mortgage and the profit associated with it may not make financial sense for a bank to take on given the overheads they would have on such a mortgage. If you assumed they were making 2% margin on the money would that cover the annual overheads ? Probably not.

Aha, cheers so far!

We are from Lithuania. So we don't need perments. We got visa, but it's 200eu dept in it. I just use it now and them for shopping online. I am chef and she works in butchers, so I don't think our job places are high risk, if that makes any sence... We are not rich, as we are not on a dole, but it was allways more then enough for our Hubble living.

So I guess small mortgage might be a double edged sword? As they can just not be bothered with us?

inforfun

blah wrote: »

have you tried something like the Bank Of Ireland Mortgage Calculator?

The best thing to do is talk to your bank.

That calculator still thinks it is 2005/6.
It tells me i can get 5x my annual salary as a single mortgage holder......

ShadowHearth

PCPhoto wrote: »

also something to watch ...if you have any online gambling transactions on your bank statements...the bank will claim you are liable to gamble and at a high risk and deemed unsuitable for a mortgage.

from what you have posted ... you should qualify for a mortgage (depending on your salaries)..... but do you need to purchase a property now or is it because you would rather own than rent as the money feels like a dead investment ?

I rent at the moment and prefer to rent because it allows me the flexibilty to move country if I feel the need or want to get out of Ireland....my work allows me to be flexible and I feel like I should be able to change countries easily enough.

Property prices in Ireland will continue to drop lower and lower for the next number of years - so it might be worth continuing to rent and saving as much money as possible (maybe even enough to purchase the house with your own money)...2, 3, or maybe even 5years from now.

Hmm I newer knew that! Cheers for heads up! Thought I am a gamer, but I newer ever had anything to do with casinos. I hope bank wount Mind me having a world of Warcraft subscription before lol.

I know what are you saying, but Ireland is already a new country for us. I am extremely happy I can live here. Coming from country where you get 100eu per month for working 12h per day makes Ireland quite okay . We love this place, and we plan to have family here, there is no way we will go back. Ireland gaves us chance to survive and live normal lifes, so even if it's bad here now, we still love it and plan to stay no matter what. Dont worry, I am not a dole leech and I dispase such people myself, I even know good few foreigners doing that...

Property now is more affordable, we allways had a dream of our own small place, so it looks like brilliant time! It will be even easier on our bills too!

D3PO

well the best of luck with it. be sure to let us know how you get on.

ShadowHearth

D3PO wrote: »

well the best of luck with it. be sure to let us know how you get on.

Thank you. Plan is to go to bank on Tuesday, thx to bank holiday.

So far I am on positive note here.

blah

inforfun wrote: »

That calculator still thinks it is 2005/6.
It tells me i can get 5x my annual salary as a single mortgage holder......

Thanks, maybe I should be asking myself the same question as the OP then, and talk to the bank manager.

ShadowHearth

Update: we were in bank on Tuesday. After visit we got more confused then we were before... It would be more problem in person we were dealing as her knowledgeabout mortgage worse then ours... I was actuolly showing her how to work on her own software... Showing basic maths...


Anyway... In the end we were told that we can get up to 140k basing on our salaries. We Ofc said we don't need that, but it was sort of weird... As she was more focused on 140k then our 80k...

So now we need 3 month payslips, p60 and salary form from workplace. I got them all, now need misses to get them...

tanyabond

Sounds like it's working out for you! Please keep us posted:)!

Gloomtastic!

ShadowHearth wrote: »

Update: we were in bank on Tuesday. After visit we got more confused then we were before... It would be more problem in person we were dealing as her knowledgeabout mortgage worse then ours... I was actuolly showing her how to work on her own software... Showing basic maths...


Anyway... In the end we were told that we can get up to 140k basing on our salaries. We Ofc said we don't need that, but it was sort of weird... As she was more focused on 140k then our 80k...

So now we need 3 month payslips, p60 and salary form from workplace. I got them all, now need misses to get them...

Well done! Just try and borrow the smaller amount if you can. Remember it's a buyers market so haggle, haggle haggle

ShadowHearth

Cheers! Funny enough most of stuff that we wanted to find out was norlt answered. I want to be armed with knowledge for our next meet up in bank. Sowing you can clear up on few things:

1. I can see that first time buyers get a bit of help when taking mortgage. So want kind of apr I would expect? What would be called as decent and what would be called as "taking for a ride". We are looking in to 25 year term on 80k.

2. As first time buyer we get 3 month brake?

3. On top of apr there is a 1% stamp duty? What is that?

4. She said that we will have to pay something to auctioneers for property too? I thought auctioneers deal with property owner aka seller? Our problem is just to pay the asking price... I am a bit confused here.

Thank you!

tanyabond

3. if you buy a house for 80,000 you'll have to pay 800 to the government (stamp duty)
4. I'd say she said solicitor, not auctioneer?

athtrasna

ShadowHearth wrote: »

Prices went down alot. It looks like there is a chance for us to have our own little house/apartment. We are not looking for castle. There are quit few properties in a range of 50k to 80k which is pretty amazing for us!

Try to buy a house rather than an apartment if you can find one in your budget. Banks are more likely to lend for houses, and also management fees for apartments can go from a few hundred to a few thousand depending on the development, and that's every year!

Good luck

professore

tanyabond wrote: »

3. if you buy a house for 80,000 you'll have to pay 800 to the government (stamp duty)
4. I'd say she said solicitor, not auctioneer?

Yes there are some solicitors (legal) fees you have to pay as a buyer to get the house in your name. I'm not sure but allow probably another 800 - 1000 or so for this - or maybe some solicitors on here could offer you a good deal

Zamboni

I thought the banks were operating a €150k minimum mortgage.
Was that scrapped?

EricPraline

Zamboni wrote: »

I thought the banks were operating a €150k minimum mortgage.
Was that scrapped?

No idea where this idea came from, though I've seen it repeated before. The main Irish banks tend to have a minimum mortgage level of €40k.

Zamboni

EricPraline wrote: »

No idea where this idea came from, though I've seen it repeated before. The main Irish banks tend to have a minimum mortgage level of €40k.

To be honest I've never seen any hard evidence for it myself but I remember it being a news story around 2009 and various threads reporting it was BOI policy.
Maybe it was just BS in the first instance.

Balmed Out

Id steer well clear of the 25 yr mortgage. Remember that if you get a shorter mortgage and some stage down the line your struggling you can always lengthen it. On 80000 you would save about 8000 over the life of the loat at present interest rates but an awful lot more if interest rates continue to increase as their expected. Id stress test at 10% and see how you would fare keeping the ability to lengthen the term should the need arise.

Handy site for mortgate comparisons.

http://www.loanclc.com/

EricPraline

Balmed Out wrote: »

Id steer well clear of the 25 yr mortgage. Remember that if you get a shorter mortgage and some stage down the line your struggling you can always lengthen it.

Why steer clear of 25 years? I could understand if they were talking about a few hundred thousand. But spreading an 80k mortgage over 30-40 years seems daft when you consider the amount of interest pair relative to the original amount borrowed.

Balmed Out

Sorry should have been clear, I wouldnt take out one longer then 20 years.

OMD

Balmed Out wrote: »

Id steer well clear of the 25 yr mortgage. Remember that if you get a shorter mortgage and some stage down the line your struggling you can always lengthen it. On 80000 you would save about 8000 over the life of the loat at present interest rates but an awful lot more if interest rates continue to increase as their expected. Id stress test at 10% and see how you would fare keeping the ability to lengthen the term should the need arise.

Handy site for mortgate comparisons.

http://www.loanclc.com/

The opposite is true. Get the longest term possible and pay it early if you want. It is much easier to shorten the length of a mortgage than lengthen it.

ShadowHearth

tanyabond wrote: »

3. if you buy a house for 80,000 you'll have to pay 800 to the government (stamp duty)
4. I'd say she said solicitor, not auctioneer?

No. That was the funny thing. She said it was auctionier... I even told here that should that be solisters job and expense?

I think I got unlucky with person dealing my case.

Why would they have minimum for mortgages?! Would that be safer to give more low mortgages then one big One and have big chance for it to fail?! No wonder banks here are being bailed out...

No one told me a thing about actuol %%% I need t look for

As for 25 years.. I think it's prety okay. I am taking 75k not 200k... Payments will be small enough already.

doggy Bear

ShadowHearth wrote: »

Cheers! Funny enough most of stuff that we wanted to find out was norlt answered. I want to be armed with knowledge for our next meet up in bank. Sowing you can clear up on few things:

1. I can see that first time buyers get a bit of help when taking mortgage. So want kind of apr I would expect? What would be called as decent and what would be called as "taking for a ride". We are looking in to 25 year term on 80k.

2. As first time buyer we get 3 month brake?

3. On top of apr there is a 1% stamp duty? What is that?

4. She said that we will have to pay something to auctioneers for property too? I thought auctioneers deal with property owner aka seller? Our problem is just to pay the asking price... I am a bit confused here.

Thank you!

Hello again Shadowhearth...

Right, allow me to answer these questions since I'm going through the exact same thing at present (except we're borrowing near 300K ... yikes)

1. Almost all Irish banks are about the same when it comes to interest rates. So I don't think you have to worry about being taken for a ride. I would highly suggest that you go to a mortgage broker instead of going to a specific bank by yourself. A mortgage broker is free to you (they get paid by the banks) and they can apply to all the banks for you and tell you the best rates around. All you do is give them the necessary paperwork and they do the hard parts. I recommend MortgageLine, but there are a few others that I'm sure are just as good.
Also, since you are borrowing so low, then you are probably okay with a variable rate mortgage.

2. The 3-month breaks are up to the bank or building society you are borrowing from. We are going through ICS (affiliate of Bank of Ireland) and they don't do breaks (we already asked). We are first time buyers too, by the way.

3. The stamp duty is Ireland's property tax. It's a once-off payment (1% of the selling price of the house). So if you buy a house for 120,000 yoyos, then you have to pay 1,200 to the gov't. The paperwork is usually handled by your solicitor. Do you have a solicitor yet? They will cost you up to 1,500 euros.

4. Not sure what she means, unless she is talking about the booking (holding) deposit. Most auctioneers and estate agents want you to give them a deposit to show how serious you are. So they ask you to give between 4000 to 7000 euros, which they hold on to until the sale is completed or cancelled. With that, they will take the house off the market (Sale Agreed) and you can begin the paperwork. That deposit will be used towards the payment before you get the keys to the house.

It would probably be good to list all of the "hidden" costs of buying a house, as we discovered them along the way:
1) Booking deposit - between 4000 and 7000 - ask the auctioneer.
2) Structural Survey - between 300 and 500 - shop around for engineers.
3) Solicitor - between 1000 and 1500 - shop around.
4) Outlays (these are gov't registry fees) - between 300 and 1000. - this is handled by your solicitor
5) Stamp duty - 1% of the agreed price - the solicitor handles this.
6) The deposit (agreed price minus amount borrowed minus the booking deposit). For example, 120,000(price) - 80,000(mortgage) - 4000(booking deposit) = 36,000. This is usually around 10% of the agreed price.
7) Life Assurance. The bank will require that you get life assurance to pay for the mortgage if you or your partner die before the mortgage is paid off. Depending if you're a smoker or have health issues, this could cost between 50 euros a month to 120 a month. So stop smoking! - shop around.
8) Home Insurance - this is relatively small. Between 20 and 50 euros a month - shop around.

The order of events are as follows:
1) Give booking deposit to auctioneer. Auctioneer takes house off market.
2) Give your solicitor's details to auctioneer. Auctioneer sends solicitor paperwork regarding house details, the sellers's solicitor details, etc.
3) Solicitors communicate. This could take weeks, even months. During this time you sign loads of papers and forms.
4) You get your home insurance and Life Assurance cover sorted. This might mean getting a health checkup to get the Life Assurance cover.
5) You also get the house checked over by the surveyor at this time. Your bank will also assign a valuer (that you have to pay for - about 150 euros) so that they know the house is worth the price. Some surveyors are accredited to do the valuation as well (ours offered a deal to do both the survey and the valuation for the cost of the survey only)
6) Once both solicitors are happy, and the bank is satisfied, you and sellers sign the contracts.
7) You then deposit all the money required into your solicitor's bank account.
8) The solicitor then "draws down" the loan from the bank and puts the money into their bank account.
9) Solicitor goes on tropical holiday (just kidding)
9) Now that all the money is in one place (solicitor's bank account), a date is set for the handing over of funds to the seller and the seller handing over the keys.

That's it as best as I can map it out. Currently we are waiting for step 6. They never said buying a house was like buying a T-shirt.

Hope that helps.

tanyabond

Bear, thank you for your detailed post! I'm not the op, but I found it very useful:)
As for life assurance (is it sort of mortgage insurance?) does it not take into account the value of property? It's surely more risky when someone is paying a 1,000,000 for a house than 100,000? 120 euros and even 50 euros a month sounds like a big addition to the mortgage repayments to me...

doggy Bear

tanyabond wrote: »

Bear, thank you for your detailed post! I'm not the op, but I found it very useful:)
As for life assurance (is it sort of mortgage insurance?) does it not take into account the value of property? It's surely more risky when someone is paying a 1,000,000 for a house than 100,000? 120 euros and even 50 euros a month sounds like a big addition to the mortgage repayments to me...

Hi tanyabond.

It is a "mortgage" insurance... for the bank's sake. They require you to have it so they won't be left out of pocket if something happens to you and you aren't able to pay the monthly repayments.

And it is based on the value of the mortgage, not the home. So if the house costs 100,000 euros and you borrow 90,000, the Life Assurance is based on the 90,000 and your personal details (age, health, etc).

I quoted 120 euros because that is my monthly cost (yes, I know). This is because we are borrowing nearly 300K and I am considered a smoker. For contrast, if I wasn't considered a smoker, we would be paying only 70 euros a month. They nearly doubled it because of those cancer sticks. Funny thing is, I stopped smoking in February of this year. But they won't consider you a non-smoker unless you haven't had a cigarette in the past 12 months. Maybe I should have lied.

The good news is that in a year's time, I can change policies again and pay a lower rate. Life Assurance is not set in stone. You can change to a different policy, or a different company altogether, if you so wish.

Hope that helps.

ShadowHearth

Doggy bear, you are the MAN


Thanks for all that, I will read it more closely when back home from work. I was seriously WTF? When came to step 9 haha. You got me there for a sec.

Looks like it will be waaaaaaaay longer journey then I expected. By that time I will be able to apply for 300k too .

Complicated, but manageable.

What if I get house for cheaper then mortgage I was going for? Can I still apply for that sum and put those funds in to property? I could not get clear answer from my bank...

Balmed Out

OMD wrote: »

The opposite is true. Get the longest term possible and pay it early if you want. It is much easier to shorten the length of a mortgage than lengthen it.

Didnt know that, couple of questions if you dont mind.

Any idea of how much easier?, always assumed bank would make more money of you so would be more likely to extend it.
What about insurance costs? How much more for a 25 vs 20 yr mortgage?
You hear a lot of people going on interest only payments. Surely if this is to continue to be a norm if you get in trouble then the shorter term loan would be a massive advantage?

Had assumed shorter = better, didnt realise they would be less likely to lengthen then shorten.

Dont want to derail you OP but guessing this important for you too.

Mr. Loverman

OMD wrote: »

The opposite is true. Get the longest term possible and pay it early if you want. It is much easier to shorten the length of a mortgage than lengthen it.

Interesting.

Is the monthly interest on your mortgage payment smaller if you have a longer mortgage?

MagicMarker

What kind of place are you going to get for 80k? I only ask because you said you want to start a family and I wouldn't have thought you'd get somewhere big enough for 80k.

OMD

Balmed Out wrote: »

Didnt know that, couple of questions if you dont mind.

Any idea of how much easier?, always assumed bank would make more money of you so would be more likely to extend it.

Very easy to shorten the term, just pay extra and your term is shortened. No permission as such is needed. Extending term is more difficult. It may require a new mortgage to be taken out.

Balmed Out wrote: »

What about insurance costs? How much more for a 25 vs 20 yr mortgage?
You hear a lot of people going on interest only payments. Surely if this is to continue to be a norm if you get in trouble then the shorter term loan would be a massive advantage?

Insurance costs will be higher but unless you are single, you really should have life insurance anyway, irrespective of whether you have a mortgage or not. I am not saying you cannot have a shorter mortgage. My point is it is better to have a 30 year mortgage and repay it over 20 years than have a 20 year mortgage which you repay over 20 years. If you have a 30 year mortgage which you are repaying over 20 it gives you leeway if times get tough. You can simply revert to a 30 year mortgage without asking anyone. You can even use the extra payments you have made on your mortgage to stop future payments for a period of time if times are really tough.

ShadowHearth

MagicMarker wrote: »

What kind of place are you going to get for 80k? I only ask because you said you want to start a family and I wouldn't have thought you'd get somewhere big enough for 80k.

In cork area you can find nice terrens houses, apartments or semi detached house. For us 2-3 bedroom place is more then enough. Plus I am not looking for fancy new house, i better get something small and do some of the work myself.

Was good questioned mentioned here: is interest same on 20 and 30 year mortgages? I always thought: longer you take - more interest you pay?

Balmed Out

The longer the term the more you pay but theres nothing to stop you paying more each month then you need to was the point.
ie. you can take a 30 year mortgage but pay x extra each month to pay back in 20 years. You are reducing the principle all the time and end up paying the same amount back as if you took a 20 year mortgage. Not sure if theres a premium charged if you go ahead and do that.

http://www.loanclc.com/
handy site to compare loans and stress test against interest rate rises.

Mr. Loverman

Balmed Out wrote: »

The longer the term the more you pay but theres nothing to stop you paying more each month then you need to was the point.

I know it's longer in the long term, but do the monthly payments have less interest, e.g. do the bank use some weird way to calculate interest based on the length of term?

JuliusCaesar

This is a good mortgage calculator. It shows the amount of interest vs the amount of capital repayments (the amount borrowed). You can move the payments up and down and see what happens. The calculator will work out "weird ways" that the banks use.

The more you can repay, the quicker you pay off the mortgage, the less interest you pay. I asked my bank and they said I can make occasional extra payments or increase my regular monthly payment - either way or both I end up paying my mortgage off earlier and not paying as much interest.

ShadowHearth

Update: finally got sorted with some paperwork.

Went to bank yesterday, the person we were dealing was busy( I was delighted) so we got anather person, who I have dealer before when taking small loans. She was 100% brilliant, I got all answers I needed, calculation of mortgage we are looking for, not the 140k which we don't need... Good few tips. Alltogether she was exelent, I even asked her to look after our case from now on, as I was very unconfident with previuos person.

So we gave: p60, 3 months payslips, salary certificates. Finished off the forms too. Now we are playing the waiting game.

Allready finder out: we will need life insurances, but we don't need health insurances. House insurance. We were afraid that bank wont take us seriously because of small sum we apply for, but she said that's even better these days, they tend to make deals with smaller sums and more people, then 1 big one now.


So all in all it looks allright so far. Hopefully soon I will be able to post here with a big smile on my face. I'll keep you posted. Hopefully such thread will help someone else too!

tanyabond

What bank are you dealing with?

ShadowHearth

tanyabond wrote: »

What bank are you dealing with?

Aib

variety

ShadowHearth wrote: »

She said that we will have to pay something to auctioneers for property too? I thought auctioneers deal with property owner aka seller? Our problem is just to pay the asking price... I am a bit confused here.

I would assume she meant the valuation fee, which is usually €130 and has to be paid to the auctioneer upfront.

With AIB, they don't require this before loan offer stage, but they are the only lender not to require it then.

So, once you get your loan offer (fingers crossed you do, if this is really what you want!), then they will get an auctioneer who is on their "Valuers Panel" to value the property for them, and you will have to pay that auctioneer €130.

ShadowHearth

Update:

Got a phone call today from aib. I got 3 months to find the property for 80k!

I am happy as pig in ... You know ... .

I screamed like a little girl in the middle of kitchen when she said it's approved. Lads looked at me like I was some weirdo .

It's only the beginning, but now I cam start looking at properties.

Cheers again lads! Really really thanks for all help I received here! I presume this thread might help some ather newby . Will still keep you posted if anyone will be interested.

smelltheglove

Best of luck Shadow, never saw this thread and like reading through it esp how you both like living here. Wish you all the best and keep us updated as you go along!