Mortgage with 35% of house price as deposit

moralproduction

Hi All

just wondering, we are looking at getting a mortgage on a house worth 200,000

we have 70,000 as a deposit, so we would need to mortgage for 130,000 on a 3 bedroom house that are selling for considerably more than that at the moment

we however do not have a do not have a solid savings record

both of us earn a decent wage about 70,000 a year combined and both have been in work with the same company for years me 11 her 6

ive no loans etc and the other halfs 1 loan could be cleared before we went to try and get a mortgage, would having this amount of a deposit have any influence on approval ?

thoughts on this matter would be greatly appreciated

coylemj

moralproduction wrote: »

we however do not have a do not have a solid savings record

What affects your credit record is taking out loans and paying them back (or not), not saving. You also need to watch your credit card if it's with one of the main banks, not paying the minimum payment each month and/or allowing lots of interest to accumulate indicates that you can't manage debt and can be detrimental to your record but I wouldn't worry about your savings record.

Bear in mind that these days the banks are very conservative when it comes to the valuation of houses that are the subject of mortgage applications so make sure that the house you're thinking of buying has zero defects that could affect it's value. This means that you need to make sure that the valuer will not find fault with the central heating boiler, windows, electrical wiring etc.

moralproduction

credit card wise i'd be fine, spend alot on the card but always pay it off highly, and have never missed a payment

amen

we have 70,000 as a deposit

do not have a solid savings record

So where did you get the 70,000 from ? You will need to explain this to any bank. If you have borrowed this or got a loan from your parents they may take this into consideration when calculating how much you can afford to repay each month.

moralproduction

basically it is made up of cash i had that wasnt in a bank and mainly presents from parents, not loans

if they done a credit check on me im sure they would see i had no laons outstanding

tenchi-fan

While the deposit will help "savings that weren't in the bank" can raise a red flag regarding money-laundering so thread carefully.

The lack of savings record will go against you. Banks are wary of medium-high earners who seem to be living week-to-week.

JDxtra

Both working for the same company is also a risk they will consider.

coylemj

tenchi-fan wrote: »

While the deposit will help "savings that weren't in the bank" can raise a red flag regarding money-laundering so thread carefully.

The Revenue Commissioners may ask where the money came from, the bank won't give a XXXX, that's not their job. The OP and partner will be adding ther money to the mortgage to buy a house, technically they won't be lodging the money into the bank so the issue of money laundering (as far as the bank is concerned) doesn't arise.

tenchi-fan wrote: »

The lack of savings record will go against you. Banks are wary of medium-high earners who seem to be living week-to-week.

All they have to say is that they invested their savings in shares, that's even if the bank asks which I doubt they will, they never asked me and I hadn't a penny saved with the bank who gave me a mortgage.

They will ask about your outgoings so that they can be satisfied that you can afford the mortgage repayments. You are assuming that a lender needs to see a savings record (with the same institution) which is not the case.

There are lots of places where you can accumulate savings and most of them are in places which do not offer mortgages (credit unions, stocks & shares, investment plans) so turning up to a bank or building society saying that you have a bundle of money in another institution to put towards a house will not raise any eyebrows.

tenchi-fan

coylemj wrote: »

The Revenue Commissioners may ask where the money came from, the bank won't give a XXXX, that's not their job.

This simply isn't true. It's completely their job!

http://www.finance.gov.ie/viewdoc.asp?DocID=1210

WHAT IS A SUSPICIOUS TRANSACTION?
96. Examples of possible suspicious transactions include:

MORTGAGE/ LOAN ACCOUNT TRANSACTIONS

- customers who have a large unexplained initial deposit resulting in a relatively low loan- to value ratio.

I wouldn't expect the bank to do a huge amount of digging and will usually be happy with a short, verbal explanations.

However, a €70k cash deposit on a house worth €200k when the couple are salaried, get paid into a bank account (presumably) and earn only €70k a year, it can raise a few eyebrows.

coylemj wrote: »

All they have to say is that they invested their savings in shares, that's even if the bank asks which I doubt they will, they never asked me and I hadn't a penny saved with the bank who gave me a mortgage.

They will ask about your outgoings so that they can be satisfied that you can afford the mortgage repayments. You are assuming that a lender needs to see a savings record (with the same institution) which is not the case.

Times have changed. Banks can easily ask for share certs or evidence of savings.

moralproduction

well we could provide evidence of where it came from, from the people who gave it to us

nlgbbbblth

Your monthly commitments (mortgage repayment and other loans) should not exceed 40% of your joint net income. There should be room for a rise in interest rates too.

i.e. if your net monthly salary is 3,000 then a mortgage of 1,200 (assuming no other loans) is about what you can afford.