Getting a mortgage?

dufferlover

Guys, there's probably a million threads on this subject so apologies if I'm repeating things.

Myself and my other half (we're getting married in May) want to apply for our first mortgage but we're quite clueless. I've been renting since 2001 so don't know what to think.

Here's our situation. We're both working in full time permenant jobs and our combined take home per month is 4,000. In tax free expenses we probably take home an extra 2500 per year also.
We are currently paying 640 per month for the house we rent, while saving another combined 600. To be honest though we only started saving that amount at the start of the vear for our wedding, which will be paid for in full before the day.
My father sadly died last year but he left us 55,000, which I will receive this month. We want to spend a max of 160,000 on a property and borrow a max of 130,000.
Anyway, does anyone know if inheritance is taken in to consideration when applying for a mortgage or will it go against us as we haven't actually saved it.
On the job front I have been in my current position full time for four years, while my patner has been in his job for seven months and has recently come off probabtion and signed a full time permenant contract. Before that however, he was unemployed. He is a carpenter but has now left the trade industry for more job secruity.

Oh and finally, my other half has zero debt, while my only debt at present is 400 on a credit card. I also have a good track record with paying back quite a sizeable loan with AIB.

Any tips or advice greatly welcome. Thanks in advance

Supercell

I'd say you would be good candidates - in about 6 months.
Clear off the credit card and never use it again - get a visa debit card with no overdraft (no temptation) instead.

We just got a mortgage and we got a gift from my parents however the bank wanted evidence of us saving , which we had. However of course it will stand in your favour in terms of much they will lend - once they are happy you are financially responsible and have a good saving record recently.

We set up one of the special savings accounts in Ulsterbank and put a fixed amount into every month automatically so the money wasn't easily available to spend and was rock solid evidence of saving regularly.

We got married last year and only started saving around February this year after clearing of the wedding related debts.
The housing market is still in crash mode so its no harm at all putting off buying for a bit if you can. We have a baby on the way so it was the right time for us to buy now.

We had no problem at all applying for a loan of 4X my gross income (my wife looks after the home and me! ). We were approved within a week, all this talk of 9/10 mortgages being refused leads me to wonder if people just lost the run of themselves in the boom years and forgot to do it the old fashioned way and clear their debts and save first before applying!

Best of luck!

gurramok

Keep saving on a per month basis OP as the banks need evidence that you are 'prudent'. That 6 month saving rule is crucial. The inheritance is a gift which in turn will be deposit so no worries there.

dufferlover

Thanks all. Sounds like we'd be better off leaving it for a few months so. My plan was to lodge my inheritance in the credit union and leave it there until we need it for our deposit. Perhaps now we will lodge a certain amount if it per month into a savings account on top of our current savings. Obviously we have been saving but dipping in to it as different wedding related costs arrive. I presume the fact we're presently dipping in to it would go against us if we were to apply now?

Supercell

dufferlover wrote: »

Obviously we have been saving but dipping in to it as different wedding related costs arrive. I presume the fact we're presently dipping in to it would go against us if we were to apply now?

I would try to show evidence of being able to save a steady amount, if you are dipping into your savings, then you are not showing that. Pick a number that you can save without dipping into and stick to it!

TonyStark

Or simply pick a reputable mortgage broker and have a chat with them and get the ball rolling. Used a mortgage broker ourselves and would have to recommend this approach wholeheartedly. They'll tell you pretty fast whether your on the right track or not.

dufferlover

TonyStark wrote: »

Or simply pick a reputable mortgage broker and have a chat with them and get the ball rolling. Used a mortgage broker ourselves and would have to recommend this approach wholeheartedly. They'll tell you pretty fast whether your on the right track or not.

This is exactly what we've done. Also applied directly to AIB as we both bank with them.
As I said we're looking for agreement in principle on a property valued at 160,000 and seeking to borrow 130,000, not massive in the grand scheme of things.
The guy we applied with over the phone on AIB seemed extremely hopeful that we would be approved, however, I'm very wary of beleiving him and getting my hopes up.

killers1

Based on your incomes & proven repayment capacity via rent & savings for the best part of 1 year you will have no difficultly obtaining approval for €130k now. I'd be very surprised if AIB decline your application as they will lend to applicants once they have been in employment 6 months and are permanent. Some of the other banks insist on 1 years continous employment so you may have to wait till your partner has completed 1 yrs service to obtain approval from them.

dufferlover

I'm back with some news! Every single lender turned us down except for AIB, who we have approval in principal to borrow 13,000 from.
We're going to look at the house that's the front runner. Called the EA about it and she was very quick to tell me that an offer of 150,000 is currently being considered by the seller. The asking price is 175,000. Don't know whether to believe the EA that there is an offer there. Plus, if we do think it's the house for us, how much should we bid?

We're also terrified that the approval in principal will be revoked!

Senna

dufferlover wrote: »

I'm back with some news! Every single lender turned us down except for AIB, who we have approval in principal to borrow 13,000 from.
We're going to look at the house that's the front runner. Called the EA about it and she was very quick to tell me that an offer of 150,000 is currently being considered by the seller. The asking price is 175,000. Don't know whether to believe the EA that there is an offer there. Plus, if we do think it's the house for us, how much should we bid?

We're also terrified that the approval in principal will be revoked!

AFAIK, your AIP wont be revoked as its not worth the paper its wrote on. If you got AIP today and submitted an application for the same amount tomorrow, there is no guarantee you would get it. They will give AIP based on just looking at the figures, the mortgage application will look more closely at your situation. But getting AIP is a good start and really all you can do at this stage. Did they other banks that refused you give any explanations?

As for the EA saying there is another bid, there may be another bidder, but if there is, do you really want to be bidding against someone in the current market? there are no shortages of houses.
If an EA ever says "there's a bid of €x already", the best answer you can say is "that's a good price, you should tell the seller to grab it now". EA's pray on people who fall in love with houses before they have bought them, showing that your not type of person is the best thing you can do.

killers1

Looking back on my previous post on this I said AIB would lend to you. Don't be worried about your AIP. The figures stack up and are within their policy so you'll be fine. The reasons the other banks declined you was that your partner is not with current employer over 12 months even though they are permanent. I wonder worry about it in any case as AIB have the cheapest variable rate on the market for your loan amount & loan to value @ 3.24%. Well done!

dufferlover

killers1 wrote: »

Looking back on my previous post on this I said AIB would lend to you. Don't be worried about your AIP. The figures stack up and are within their policy so you'll be fine. The reasons the other banks declined you was that your partner is not with current employer over 12 months even though they are permanent. I wonder worry about it in any case as AIB have the cheapest variable rate on the market for your loan amount & loan to value @ 3.24%. Well done!

Thanks Killers! very much so looking forward to viewing the house tonight. Need to keep calm and play the game if we do like it. I can be a very typical excited girl by times. Other half has me warned to keep it cool!

Bigcheeze

I disagree with people saying steer clear of properties with other bidders. Fact is that competitively priced, well maintained / upgraded properties in good areas will often attract more than one bidder because theses are the sort of properties people want to buy!

Obviously you can't get emotional and be prepared to walk away if the bidding doesn't make sense.

dufferlover

Bigcheeze wrote: »

I disagree with people saying steer clear of properties with other bidders. Fact is that competitively priced, well maintained / upgraded properties in good areas will often attract more than one bidder because theses are the sort of properties people want to buy!

Obviously you can't get emotional and be prepared to walk away if the bidding doesn't make sense.

Totally agree, however the EA is claiming there's already an offer of 150,000 on the place. I don't know if I beleive him. I'm terrified also of paying over the odds.

Zamboni

dufferlover wrote: »

Here's our situation. We're both working in full time permenant jobs and our combined take home per month is 4,000. In tax free expenses we probably take home an extra 2500 per year also.

Are you double counting the expenses?
Surely the €2,500 expenses you take in has already been spent from the take home pay?

Bigcheeze

dufferlover wrote: »

Totally agree, however the EA is claiming there's already an offer of 150,000 on the place. I don't know if I beleive him. I'm terrified also of paying over the odds.

The best way to judge is to observe at first hand what's going on in the area you want to buy for several months. Go see lots of places, find out the bids, find out the sale prices and you'll soon get a feel for the real market. If nothing is going sale agreed then everything is overpriced.

zac8

dufferlover wrote: »

I'm terrified also of paying over the odds.

Then you should wait until the summer when the new property price database is due to go live.

dufferlover

Update: We've found our house and had our bid accepted Going to pay booking deposit today.

Still on tender hooks all the same. The independent valuer from the bank was out at the house this morning, so here's hoping he thinks it's worth what we offered for it. Won't rest easy until the AIP turns in to a formal offer!

killers1

Well done! You should have no problem with the Bank's valuer and as the value of the property is what someone is willing to pay for it, it is very very rare that a valuer won't sign off. They'll never say that the property is worth more than you paid for it and the value will simply be put in as the purchase price

Zamboni

dufferlover wrote: »

Update: We've found our house and had our bid accepted Going to pay booking deposit today.

Still on tender hooks all the same. The independent valuer from the bank was out at the house this morning, so here's hoping he thinks it's worth what we offered for it. Won't rest easy until the AIP turns in to a formal offer!

Should you not wait until it is confirmed as a formal offer before you go putting down a deposit?

killers1

By paying the booking deposit the estage agent lists the property as 'sale agreed' and doesn't show the property to any other prospective bidders. The booking deposit is 100% refundable - guaranteed, so there is no issue with paying over the booking deposit now. If the valuation report was the only condition on your approval in principle then it is just a formality that the loan offer will follow once the val report is in order.

Zamboni

killers1 wrote: »

By paying the booking deposit the estage agent lists the property as 'sale agreed' and doesn't show the property to any other prospective bidders. The booking deposit is 100% refundable - guaranteed, so there is no issue with paying over the booking deposit now. If the valuation report was the only condition on your approval in principle then it is just a formality that the loan offer will follow once the val report is in order.

I get that, but it's a buyers market and it's less hassle to wait for the formal offer than attempt to retrieve the deposit after a potential refusal.
No right or wrong here though. That's just how I look at it.

dufferlover

Too late now people, I've paid the booking deposit but thanks for the advice. Has anyone got any idea how long it will now take the bank to come to a decision as to give us a formal offer or not? Thanks in advance.

killers1

What were the conditions of your AIP? If it was just rate, term, solicitors details and valuation report then I would suggest giving the bank your solicitors details and decide on what rate & term you want to borrow over. I'd suggest variable of 3.24% - cheapest on the market. If the valuation report then is the last item o/s it'll take about 1 week from the day it is received in the bank for the formal loan offer to arrive with your solicitor. I would suggest ringing the Bank the day after the valuation has been submitted and to ask whether the loan is now formally sanctioned. If so, that is your full formal offer. The reason I say to ring is because once the loan is sanctioned it then goes into a queue for the loan offer to be printed and posted which will take 4/5 days but once val report is in order and loan is fully sanctioned you're good to go! If you need anything else let me know

dufferlover

killers1 wrote: »

What were the conditions of your AIP? If it was just rate, term, solicitors details and valuation report then I would suggest giving the bank your solicitors details and decide on what rate & term you want to borrow over. I'd suggest variable of 3.24% - cheapest on the market. If the valuation report then is the last item o/s it'll take about 1 week from the day it is received in the bank for the formal loan offer to arrive with your solicitor. I would suggest ringing the Bank the day after the valuation has been submitted and to ask whether the loan is now formally sanctioned. If so, that is your full formal offer. The reason I say to ring is because once the loan is sanctioned it then goes into a queue for the loan offer to be printed and posted which will take 4/5 days but once val report is in order and loan is fully sanctioned you're good to go! If you need anything else let me know

The only conditions were that we supply a letter from our employer on headed paper cofirming both our gross salaries (even those we did this already!) plus give details of the property we intend to buy. When our bid was accepted I contacted AIB straight away, gave these details plus my solicitors details. The bank's valuer has been out and says he will have the valuation to the bank today or tomorrow. I asked him what he was valuing the house at and perhaps that was a rookie mistake as he told us 'he would try his utmost to make it work for us'. Anyway we'll have a copy of the valuation today or tomorrow ourselves anyway so we'll see then.
This part is actually worse than waiting to see if your bid has been accepted. Arghhhh!

altoids

best of luck! i hope it all goes well, please keep us updated - its nice to hear of people actually getting somewhere. Fingers crossed and lots of deep breaths

killers1

dufferlover wrote: »

killers1 wrote: »

What were the conditions of your AIP? If it was just rate, term, solicitors details and valuation report then I would suggest giving the bank your solicitors details and decide on what rate & term you want to borrow over. I'd suggest variable of 3.24% - cheapest on the market. If the valuation report then is the last item o/s it'll take about 1 week from the day it is received in the bank for the formal loan offer to arrive with your solicitor. I would suggest ringing the Bank the day after the valuation has been submitted and to ask whether the loan is now formally sanctioned. If so, that is your full formal offer. The reason I say to ring is because once the loan is sanctioned it then goes into a queue for the loan offer to be printed and posted which will take 4/5 days but once val report is in order and loan is fully sanctioned you're good to go! If you need anything else let me know

The only conditions were that we supply a letter from our employer on headed paper cofirming both our gross salaries (even those we did this already!) plus give details of the property we intend to buy. When our bid was accepted I contacted AIB straight away, gave these details plus my solicitors details. The bank's valuer has been out and says he will have the valuation to the bank today or tomorrow. I asked him what he was valuing the house at and perhaps that was a rookie mistake as he told us 'he would try his utmost to make it work for us'. Anyway we'll have a copy of the valuation today or tomorrow ourselves anyway so we'll see then.
This part is actually worse than waiting to see if your bid has been accepted. Arghhhh!

If the only condition is a salary cert on headed paper confirming income figures you've already gave them you'll have no issue there. Don't be worrying about the valuation report! I can bet you the cost of the report that the Valuer signs off with the value = to the purchase price! Looks like you're done and dusted and the loan offer is only a formality...

dufferlover

killers1 wrote: »

If the only condition is a salary cert on headed paper confirming income figures you've already gave them you'll have no issue there. Don't be worrying about the valuation report! I can bet you the cost of the report that the Valuer signs off with the value = to the purchase price! Looks like you're done and dusted and the loan offer is only a formality...

I really hope you're right. I've had to stop myself from looking at and buying furniture for a house that I don't actually own or may never own!

We're getting married in 13 weeks so the next thing now, if everything goes to plan, will be to try and be in the house before the wedding. Must be crazy doing both at the same time :rolleyes:

killers1

Trust me it'll be fine! 13 weeks sounds like a realistic timeframe to be in the house before your wedding! Congrats on the pending nuptials!

the groutch

I did 'offer acceptance' to 'key in the door' in 7 weeks, so 13 is plenty.

dufferlover

Killers1 you were right We got a letter of sanction today. Unless the valuation report is off the wall it's a done deal. Thrilled.

What's next then? I'm so green when it comes to this stuff!

Zamboni

dufferlover wrote: »

Killers1 you were right We got a letter of sanction today. Unless the valuation report is off the wall it's a done deal. Thrilled.

What's next then? I'm so green when it comes to this stuff!

Sit back and watch it devalue?
Sorry I had to. Best of luck.

dufferlover

Zamboni wrote: »

Sit back and watch it devalue?
Sorry I had to. Best of luck.

Can't bate a bit of cheek! You're probably right but thankfully we see ourselves in the place long term for 15 to 20 years, so hopefully we won't still be up sh*t creek without a paddle then!

littleredspot

Glad to hear you're happy with your purchase OP. Just as a balance to Killers1 massive positivity about you situation, while it certainly does appear that you are excellent mortgage candidates, banks have an unerving ability to throw random spanners in the works.

I hope they don't, but coming from personal experience I would say (and I know it's not easy) try to not get too excited until you have the keys in your hands. (I do hope I'm wrong of course!)

dufferlover

littleredspot wrote: »

Glad to hear you're happy with your purchase OP. Just as a balance to Killers1 massive positivity about you situation, while it certainly does appear that you are excellent mortgage candidates, banks have an unerving ability to throw random spanners in the works.

I hope they don't, but coming from personal experience I would say (and I know it's not easy) try to not get too excited until you have the keys in your hands. (I do hope I'm wrong of course!)

Totally appreciate that. I've been saying this to my other half and he calls me a kill joy. While I am excited I'm trying to take the I'll beleive it when I see it approach to all this.

killers1

I wouldn't say I was being overly optimistic on this thread... I work in this business & know what I'm talking about! If you go back to the first post where the figures were laid out I said I was 100% sure that AIB would be willing to lend...

Anyway, congrats on your full sanction Dufferlover! The next steps are as follows;

1. Structural Survey - get one done & be happy with everything on the report before you sign contracts.
2. The Bank will issue a loan offer to your solicitor once the contracts arrive & your solicitor is happy with them.
3. The conditions you will need to satisfy for the Bank to bring the case from loan offer to cheque issue are as follows;
a) Direct Debit Mandate - You just need to sign an AIB DD Mandate with the account details you want the monthly repayment to come from
b)Life Cover - You need to have a policy in joint names that covers the amount & term you wish to borrow over which will repay the loan in event of death of either applicant. You should also investigate Serious Illness Cover etc for added peace of mind
c) Home Insurance - On section 12 on the Valuers Report there is a section called 'reinstatement amount'. This is what it would cost to clear the site & rebuild the house to it's current standard. This is the amount you need to have the property insured for as opposed to the purchase price. The level of contents cover will be up to you and will depend on any high risk or valuable items that you want specifically covered by the policy.

Once you have attended to the above then the solicitor sends in the legal paperwork i.e. Your signed loan acceptance, Letter of Undertaking & Cheque Request & the Bank release the funds a day or two before the pre-agreed closing date.

If you need anything else let me know!

In relation to the negative comments or things that may go wrong your situation is as follows;

The Bank have agreed to lend to you and will not withdraw that loan offer for any reason. The only thing that would prevent you from getting the keys to your house would be that 1) a problem on the structural survey that would make you decide to walk away 2) a problem with the Title to the property that your solicitor advises you not to proceed or 3) The seller pulls out of the deal (which they can do right up until THEY have signed the contracts, not just you!). These are worst case scenarios but all things being equal you are where you need to be at this stage and everything is going smoothly. If any of the above happens it is out of your control in any case and they bank would still be willing to lend you the same amount should you have to find an alternative property.

Hope this helps and if you need anything else let me know!

killers1

Sorry, extension to point 2 - meant to say that once the loan offer & contracts arrive and your solicitor is happy with them they will arrange for you to come in and sign them & pay the balance of the contract deposit.. Usually 10% of purchase price less booking fee or else 8% less booking fee if you are getting a 92% loan...

dufferlover

Killers, you're a gem. Thanks so much.
Just got the valuation report back and it's been valued at what we've offered. However it states the house only has 2 bedrooms when it has three. Granted it is a dormer and the third bedroom is downstairs and the current owners use it as a play room but it has wardrobes in it so it is a bedroom. I hope this doesn't go against us.

dufferlover

dufferlover wrote: »

Killers, you're a gem. Thanks so much.
Just got the valuation report back and it's been valued at what we've offered. However it states the house only has 2 bedrooms when it has three. Granted it is a dormer and the third bedroom is downstairs and the current owners use it as a play room but it has wardrobes in it so it is a bedroom. I hope this doesn't go against us.

Panic averted! It was a typo and the valuer is going to amend it before posting it to AIB this evening. Phew!

killers1

dufferlover wrote: »

Panic averted! It was a typo and the valuer is going to amend it before posting it to AIB this evening. Phew!

Whether it was a 2 bed or a 3 bed wouldn't have affected the Bank's decision to lend and they would still have been happy to proceed! Only would have been a problem if you told them it was a 2 or 3 bed and it turned out to be a 1 bed as they can have a different policy in relation to 1 bed properties...

killers1

littleredspot wrote: »

Glad to hear you're happy with your purchase OP. Just as a balance to Killers1 massive positivity about you situation

littleredspot - what's wrong with a bit of massive positivity??!!:)

littleredspot

killers1 wrote: »

littleredspot wrote: »

littleredspot - what's wrong with a bit of massive positivity??!!:)

I'm all for positivity killers1, but I've a good bit of experience with taking out mortgages and every time the bank threw up an unexpected problem, they also have a habit of not telling you about it until you chase them up.

For example: The last time I went to take out a mortgage the bank manager called to let me know he had the cheque in his hand, my wife and I had the afternoon booked off work to meet in the solicitors, and we got a phonecall to say that there was a problem, and the bank manager had been over-ruled. We never did get that cheque!

Another time the valuer valued the property at under what we had agreed to pay, this is standard practice if a building is in need of work.

Buying a home is an emotional rollercoaster at the best of times, and with current restrictions it seems almost common practice to refuse a seemingly valid application for no good reason. Personally I would assume the worst until I had the keys in my hand, not easy I know, but better for your mental health in the long run:)

killers1

littleredspot wrote: »

killers1 wrote: »

I'm all for positivity killers1, but I've a good bit of experience with taking out mortgages and every time the bank threw up an unexpected problem, they also have a habit of not telling you about it until you chase them up.

For example: The last time I went to take out a mortgage the bank manager called to let me know he had the cheque in his hand, my wife and I had the afternoon booked off work to meet in the solicitors, and we got a phonecall to say that there was a problem, and the bank manager had been over-ruled. We never did get that cheque!

Another time the valuer valued the property at under what we had agreed to pay, this is standard practice if a building is in need of work.

Buying a home is an emotional rollercoaster at the best of times, and with current restrictions it seems almost common practice to refuse a seemingly valid application for no good reason. Personally I would assume the worst until I had the keys in my hand, not easy I know, but better for your mental health in the long run:)

Sounds like you were messed around a few times! Regarding the valuer they tend value in current condition and value in repair i.e. on completion of the works proposed. I agree that buying a home is an emotional rollercoaster and the biggest investment a person makes. That's why it's important to have somebody qualified in that area to take you through the process and make things as easy as possible. Yes I am a mortgage broker but I learnt my trade working in a bank and I saw first hand that people walking in off the street were sitting down to speak to staff who could barely spell mortgage never mind take them through the process in an efficient manner....

dufferlover

Right, the valuation has come in at the bid we gave. It has been sent to AIB, so what now? Do I need to wait for something or is now the time to get the structural survey done?

killers1

dufferlover wrote: »

Right, the valuation has come in at the bid we gave. It has been sent to AIB, so what now? Do I need to wait for something or is now the time to get the structural survey done?

Have you given the bank the loan offer details? I.e the rate & term you have opted for? Did you also give them the salary certs they asked for? You mentioned previously they have your solicitor details. Once they have all the above the loan is put into a queue for the loan offer & legal pack to be sent out to your solicitor. This usually takes around 3/4 working days. Your solicitor will get you in to sign contracts once they receive the loan pack from AIB and the contracts from the vendors solicitor. You should have the structural survey completed and be happy with everything in the report prior to signing contracts. I sent you a PM the other day on this?

Villa05

Duffer, Would you mind posting the house (or something similar on the same street) and the price paid once the deal has gone through, I'm desperate for some price transparency

killers1

Villa05 have you an area in mind that you want a price comparison of? Send me a PM if you'd prefer...

dufferlover

Right folks, we're nearly there. Just need a favour. Our solicitor wants us to have the balance of our deposit (less the booking) fee ready to go early next week. Obviously this isn't a problem but who do we make the cheque payable to? Our solicitor or the vendors solicitor? I could ask our solicitor this but he'd charge me for the anwer!

killers1

dufferlover wrote: »

Right folks, we're nearly there. Just need a favour. Our solicitor wants us to have the balance of our deposit (less the booking) fee ready to go early next week. Obviously this isn't a problem but who do we make the cheque payable to? Our solicitor or the vendors solicitor? I could ask our solicitor this but he'd charge me for the anwer!

Vendors solicitor! And that was for free....!

dufferlover

killers1 wrote: »

Vendors solicitor! And that was for free....!

Thanks! By the way, I didn't get an PM off you. Just saw your other post there a second ago.

Our solicitor is confident he'll have us in the house by Easter Fingers crossed he can deliver on that now!

killers1

dufferlover wrote: »

Thanks! By the way, I didn't get an PM off you. Just saw your other post there a second ago.

Our solicitor is confident he'll have us in the house by Easter Fingers crossed he can deliver on that now!

Providing your solicitor is happy with the pre-contract replies and the vendor is looking to close before Easter you'll certainly be in by then. Ultimately all you can do is ensure that the Bank are ready to issue funds to your solicitor when needed and then just hope the other side still go ahead and sign the contracts!!!