Mortgage Help FTB

airman737

Hello All
Need some advice. Myself and my Girlfriend are looking to buy a property. We have feck all savings, spent the last few years spending our wages on SH1T. We have a combined income of €65000. We each have a car loan, Mine is finished this year (December) and hers next year. Things going in our favour:

1. Permanent Secure employment
2. Excellent credit history.

Things not going in our favour:
1. 2 Car Loans
2. Credit card debt of €6000 (all monthly payments have been reached, so no bad debt on the CC)
3. Not much savings

The property we are looking at is valued at 110,000. 2 Storey with nearly 2 acres of land (Bank Repossession). I know it will be next to impossible for us to get a mortgage for say €100000 (90%) Property value, but my brother has offered to give us, as a gift, €45000.

My Question is would a bank lend us the €55000 for the house?

Any feedback would be greatly appreciated!

jimmycrackcorm

Could you use some of the 45k to pay of your existing debts and the remainder as a deposit?

Cuddlesworth

The banks will look at the 45000 as just another loan whatever way you try to spin it.

altoids

hi all,

on a related note - does anyone know the general lending criteria these days?
i.e. minimum deposit, time in employment etc etc.
any help would be greatly appreciated

Bigcheeze

Cuddlesworth wrote: »

The banks will look at the 45000 as just another loan whatever way you try to spin it.

No they won't.

Cuddlesworth

Bigcheeze wrote: »

No they won't.

Yes they will. Lending has tightened. 45k just appearing in your account will have to be explained. And saying that your brother "gave" you 45k without repayment will not be accepted as a valid excuse. So your looking at mortgage approval with near 55k in dept, no savings or savings history and a mortgage of 65k. It might happen due to the small amounts but it will be taken into consideration.

nibtrix

You'll also pay CAT on the gift from your brother, think the limit before tax is around 33k at the moment. Not necessarily a huge issue but make sure you include it in your calculations

the groutch

hate to be blunt, but little or no savings from €65k joint income doesnt exactly scream "we're good at managing our finances", does it?
ability to save is one of, if not the most important criteria for getting a mortgage

airman737

Thanks everyone for your replies. I know the grouch, your dead right. Never realised how important it was until we went looking for a mortgage. We are going out over ten years, travelled the world, and bought anything we wanted.
The money i've spent on cars alone equates to nearly 80K. My GF was clearing out her wardrobe the other day, and dumped nearly 1K worth of shoes. It was crazy what we wasted our money on.
Now don't get me wrong, If we had to pay a mortgage we would. We can be quite disciplined when we have to.

I suppose this is why the country is the way it is. If this was say 5 years ago we would have gotten a mortgage without any problems.

Anyway, All we can do is knuckle down (Which we've started doing since xmas) Just paid €1000 off my CC this evening, So That's a start. Thanks again everyone.

Flancrest

altoids wrote: »

hi all,

on a related note - does anyone know the general lending criteria these days?
i.e. minimum deposit, time in employment etc etc.
any help would be greatly appreciated

I've been looking into this recently as myself and herself almost have our deposit together.

Most of the banks are offering 90% mortgage (so 10% deposit needed) although AIB are willing to offer 92% in certain cases.
As for employment the standard seems to be 2 years in continuous full time employment (changing jobs not an issue once there's no break in employment)

My advice would be to set up a meeting with a mortgage advisor in one of the banks (it's free) and be completely honest with them in regards to loans,savings,salary etc. At least you'd have a ball park figure of what you're able to get then.

Hope this helps a bit

Flancrest

airman737 wrote: »

Thanks everyone for your replies. I know the grouch, your dead right. Never realised how important it was until we went looking for a mortgage. We are going out over ten years, travelled the world, and bought anything we wanted.
The money i've spent on cars alone equates to nearly 80K. My GF was clearing out her wardrobe the other day, and dumped nearly 1K worth of shoes. It was crazy what we wasted our money on.
Now don't get me wrong, If we had to pay a mortgage we would. We can be quite disciplined when we have to.

I suppose this is why the country is the way it is. If this was say 5 years ago we would have gotten a mortgage without any problems.

Anyway, All we can do is knuckle down (Which we've started doing since xmas) Just paid €1000 off my CC this evening, So That's a start. Thanks again everyone.

One of the major factors I've found are the car loans you'd be amazed how much they knock off the amount a bank is willing to lend you.

Best of luck with it though, its though but nearly having my deposit together I can honestly say it's worth it.

Theboinkmaster

airman737 wrote: »

Hello All
Need some advice. Myself and my Girlfriend are looking to buy a property. We have feck all savings, spent the last few years spending our wages on SH1T. We have a combined income of €65000. We each have a car loan, Mine is finished this year (December) and hers next year. Things going in our favour:

1. Permanent Secure employment
2. Excellent credit history.

Things not going in our favour:
1. 2 Car Loans
2. Credit card debt of €6000 (all monthly payments have been reached, so no bad debt on the CC)
3. Not much savings

The property we are looking at is valued at 110,000. 2 Storey with nearly 2 acres of land (Bank Repossession). I know it will be next to impossible for us to get a mortgage for say €100000 (90%) Property value, but my brother has offered to give us, as a gift, €45000.

My Question is would a bank lend us the €55000 for the house?

Any feedback would be greatly appreciated!

With that history I wouldn't give you a mortgage.

Knuckle down, pay off all your debts and start regular savings. Then after 2 years go back to the bank - property will have decreased in value by then anyway.

Flancrest

Theboinkmaster wrote: »

With that history I wouldn't give you a mortgage.

Knuckle down, pay off all your debts and start regular savings. Then after 2 years go back to the bank - property will have decreased in value by then anyway.

Well its lucky he wasn't asking anyone on here for a mortgage then isn't it.

ShadowHearth

65k income and all blown to bits and still have 6k dept on CC, plus 2xcar loans. That is briliant...

How much you earn means **** all to banks now, if you can't show that you can save money.

We applied for mortgage and had only 500eu on top of deposit needed to buy a house. We got approved! What saved us?
Very small loan to repay, -200eu on visa. And rent payed by Internet banking with small not on each transaction: RENT.

I honestly would not eve let you near my money if I would be bank.

Flancrest

ShadowHearth wrote: »

65k income and all blown to bits and still have 6k dept on CC, plus 2xcar loans. That is briliant...

How much you earn means **** all to banks now, if you can't show that you can save money.

We applied for mortgage and had only 500eu on top of deposit needed to buy a house. We got approved! What saved us?
Very small loan to repay, -200eu on visa. And rent payed by Internet banking with small not on each transaction: RENT.

I honestly would not eve let you near my money if I would be bank.

Ah how I love the internet. Seriously though what help is this to the guy. He is simply looking for some advice. If you're just going to slate him for something he's already admitted was poor money management don't bother. And again he has not asked anyone on here for money so I would assume the chances of him getting your money are the same as you becoming a bank.

Zamboni

The couple had a ball in their roaring twenties. Travel, material goods etc. Best of luck to them. Probably some of the best times of their life.
Now they need to sober up and get on with the work necessary to get their finances in order and it sounds like they've already started knuckling down.

OP get your missus to stick the shoes on adverts. Don't just throw them out!

dufferlover

Getting a mortgage I think depends on the lender.

I've been in FT employment for years but my other half had only been in employment seven months having been out of work for two years, plus we also got a lump sum from a family member and we got approval from AIB. However, we didn't have any debt and had some savings but nothing to write home about either.
AIB were the only ones that looked at us though. Every other lender walked away immediately.

airman737

Zamboni wrote: »

The couple had a ball in their roaring twenties. Travel, material goods etc. Best of luck to them. Probably some of the best times of their life.
Now they need to sober up and get on with the work necessary to get their finances in order and it sounds like they've already started knuckling down.

OP get your missus to stick the shoes on adverts. Don't just throw them out!

I brought them to a cloths depot place that gives you money for them, better than throwing them out.

airman737

dufferlover wrote: »

Getting a mortgage I think depends on the lender.

I've been in FT employment for years but my other half had only been in employment seven months having been out of work for two years, plus we also got a lump sum from a family member and we got approval from AIB. However, we didn't have any debt and had some savings but nothing to write home about either.
AIB were the only ones that looked at us though. Every other lender walked away immediately.

We went to a mortgage broker, he gave us some sound advice. As he didn't deal with AIB, we are dealing with them directly. We were honest with them, and they are still processing our application. I.E. they haven't turned us down yet.
We were asked during the application had we savings for the deposit, I told them we had very little. She asked me could we get a family member to gift us the deposit, So I told her we could, and she seemed satisified with that.
They seemed to be more interested in our occupations, and our earnings. She said that the main thing they look for is Ability to pay, which, in my opinion, we have. So we might be lucky (Eventhough I know it's a long shot) Anyway, thanks again for all your advice, both good and bad. I'll let ye know the outcome!

killers1

altoids wrote: »

hi all,

on a related note - does anyone know the general lending criteria these days?
i.e. minimum deposit, time in employment etc etc.
any help would be greatly appreciated

Hi Altoids,

Minimum requirements out there are 8% deposit, 6 months with employer in a permanent role with probation completed, You need to qualify for the amount requested based on the banks calculator (each bank has their won calculator where they input your income figures and it spits out a figure within policy that they would lend to you subject to you having a proven repayment capacity for amount required stressed at 2%. By proven repayment capacity I mean you need to be able to show the bank that you can afford the repayment at the current interest rate plus allowing for a 2% increase in rates. E.g stressed repayment is €1,200pm. You have been saving €500pm, paying rent of €500pm and recently completed a personal loan of €200pm. This shows you can afford to repay €1,200pm and provided your income allows you to borrow amount required you shouldn't have too much difficulty in obtaining an approval.

airman737

Hi All (Again)

Well go took a chance a applied for the mortgage, and got refused. Refusal based on short term debts. Now I have a new query for anyone who can help

I am contemplating applying again with BOI as a single applicant. My Other Half has a car loan for 11000 and this is what is holding us up primarily. Now my situation financially is this.

I have CC debt of 5000, and a remaining car loan of 4000. My parents have offered to pay off my loans, which would leave me debt free. If i was to apply for a 100K mortgage with earnings of 37000 per year take home, in a permanent position for over 8 years now with the same company, what would my chances be? I have an excellent credit history. Would the bank take into consideration my parents paying off my loans?

Any feedback is greatly welcome

dearg lady

I'm not exactly sure what the rush is, I think the best advice so far is to tighten your belts, clear your debts as quickly as possible and then save a deposit and reapply.

killers1

airman737 wrote: »

Hi All (Again)

Well go took a chance a applied for the mortgage, and got refused. Refusal based on short term debts. Now I have a new query for anyone who can help

I am contemplating applying again with BOI as a single applicant. My Other Half has a car loan for 11000 and this is what is holding us up primarily. Now my situation financially is this.

I have CC debt of 5000, and a remaining car loan of 4000. My parents have offered to pay off my loans, which would leave me debt free. If i was to apply for a 100K mortgage with earnings of 37000 per year take home, in a permanent position for over 8 years now with the same company, what would my chances be? I have an excellent credit history. Would the bank take into consideration my parents paying off my loans?

Any feedback is greatly welcome

You can certainly apply on your own case and I would say that an underwriter would view it as follows;

Positives
You'll easily qualify to borrow €100k on an income of €37k
Established in your current employment
You have a proven repayment capacity by way of servicing existing loans
Strong parental support is evident by way of gift.

Where are you living at the moment? Are you renting & if so how much do you pay and is it paid through your bank account?

Negatives
You have little or no savings and have built up a large amount of personal debt.

My view is that your application qualifies based on BOI's criteria but the issue of no personal savings may be a sticking point. You may have a chance of getting approval if presented correctly. Bank's do accept that people in their 20's can spend all their income living the high-life but if they can show an ability to repay a loan & have a clean credit history you might get lucky. If it lands on an Underwriter's desk on a day that they're in a good mood you may have a chance...

airman737

killers1 wrote: »

You can certainly apply on your own case and I would say that an underwriter would view it as follows;

Positives
You'll easily qualify to borrow €100k on an income of €37k
Established in your current employment
You have a proven repayment capacity by way of servicing existing loans
Strong parental support is evident by way of gift.

Where are you living at the moment? Are you renting & if so how much do you pay and is it paid through your bank account?

Negatives
You have little or no savings and have built up a large amount of personal debt.

My view is that your application qualifies based on BOI's criteria but the issue of no personal savings may be a sticking point. You may have a chance of getting approval if presented correctly. Bank's do accept that people in their 20's can spend all their income living the high-life but if they can show an ability to repay a loan & have a clean credit history you might get lucky. If it lands on an Underwriter's desk on a day that they're in a good mood you may have a chance...

Thanks for your input as always Killers1.
I am living at home BUT I pay my parents rent since I started working 8 years ago, I pay 240/month by cheque, Always have paid by cheque. AIB accepted this as proof of rent. I have nearly 3000 saved since the start of January. I have stopped all unnecessary spending. By the end of march I am hoping to have 6000 saved. (Going to pay off CC and Car Loan Tomorrow)
Note: Since I started working 8 years ago I have gotten 3 Loans from BOI totalling nearly 70000, and all paid back on time. Will This stand to me?

killers1

airman737 wrote: »

Thanks for your input as always Killers1.
I am living at home BUT I pay my parents rent since I started working 8 years ago, I pay 240/month by cheque, Always have paid by cheque. AIB accepted this as proof of rent. I have nearly 3000 saved since the start of January. I have stopped all unnecessary spending. By the end of march I am hoping to have 6000 saved. (Going to pay off CC and Car Loan Tomorrow)
Note: Since I started working 8 years ago I have gotten 3 Loans from BOI totalling nearly 70000, and all paid back on time. Will This stand to me?

Paying the rent by cheque will certainly stand to you and come March when you have €6k saved I am confident you can secure an approval.

airman737

killers1 wrote: »

Paying the rent by cheque will certainly stand to you and come March when you have €6k saved I am confident you can secure an approval.

Thanks again killers1, it's nice to hear something positive after all my negative dialogue dealing with AIB lately. I'll let you know how I get on. Thanks again.

airman737

dearg lady wrote: »

I'm not exactly sure what the rush is, I think the best advice so far is to tighten your belts, clear your debts as quickly as possible and then save a deposit and reapply.

Hi Dearg Lady

2 reasons why I want to buy as soon as I can.

1. Tax Relief is ending on 31 dec 2012.
2. The house I am looking at is a repossession, originally bought for 375K and now being sold for 110K on 2 acres of land.

I know people are hinting that house prices are going to drop another 20% this year, but in all honesty, I cannot see this particular house dropping any further, due to it's state, i.e. nearly fully furnished, and in impeccable condition both inside and out. I do appreciate your feedback though :-)

kennyb3

To me the €5k CC debt is the real deal breaker.

PS Why have you still got this? Why not go to a CU and get it converted to a loan?

I think you seriously need to look at your money management.

dearg lady

airman737 wrote: »

Hi Dearg Lady

2 reasons why I want to buy as soon as I can.

1. Tax Relief is ending on 31 dec 2012.
2. The house I am looking at is a repossession, originally bought for 375K and now being sold for 110K on 2 acres of land.

I know people are hinting that house prices are going to drop another 20% this year, but in all honesty, I cannot see this particular house dropping any further, due to it's state, i.e. nearly fully furnished, and in impeccable condition both inside and out. I do appreciate your feedback though :-)

ok, fair enough. In that case it's likely your other debts are whats really crippling ye and stopping you from getting it. You need to figure out a way to clear them ASAP.

airman737

dearg lady wrote: »

ok, fair enough. In that case it's likely your other debts are whats really crippling ye and stopping you from getting it. You need to figure out a way to clear them ASAP.

Paid off my CC and Car loan yesterday. I am now debt free and applying now as a single applicant.