Really want to get a mortgage!

LucianaD

Hi I would be grateful for some advice please before I approach my bank. My fiance and I want to purchase our own place, and have seen one for 70,000 needs doing up so would need 100,000 in total, the payments would be small on the mortgage. As it stands my fiance already has a mortgage, but his parents are living in the house. My job was cut down to part time 2 years ago I make 245 a week. We have 10,000 for deposit, I would be going for the mortgage in my name but we would be paying it together. Do I stand a chance in getting it? Also if I had someone to guarantor would that help?

killers1

LucianaD wrote: »

Hi I would be grateful for some advice please before I approach my bank. My fiance and I want to purchase our own place, and have seen one for 70,000 needs doing up so would need 100,000 in total, the payments would be small on the mortgage. As it stands my fiance already has a mortgage, but his parents are living in the house. My job was cut down to part time 2 years ago I make 245 a week. We have 10,000 for deposit, I would be going for the mortgage in my name but we would be paying it together. Do I stand a chance in getting it? Also if I had someone to guarantor would that help?

If you are thinking of applying on your own on an annual salary of €245pw (€12,740 per annum) there's no chance of you getting approval. The banks will take a view that you just about have enough money to cover your cost of living never mind take on a debt. Whether you can apply jointly will depend on fiance's income, mtg o/s on existing property, repayments per month, value of property, loan amount o/s & what repayment level you have proven you can afford...

chris85

Also you will not get €100k for a property worth €70k at the time of purchase. Thats a LTV ratio of over 100% which aint going to happen.

Also your partners income isnt mentioned which is obviously a factor. Can he support another mortgage. You do not have a big income and would not get approved on your own and thus this is the biggest factor here.

I know you may think you can afford the mortgage but consider whether your finances will be able to cope with it if stress tested.

Teaandcoffee

You haven't a hope in getting a mortgage but even if you had I wouldn't be too inclined to ask anyone to go guarantor. We've recently heard of cases were guaratnors are being chased to cough up unpaid debts for the debtor. I think property prices will contine to tumble along with wages so it wouldn't be fair to ask anyone to guarantee your mortgage.

killers1

Teaandcoffee wrote: »

We've recently heard of cases were guaratnors are being chased to cough up unpaid debts for the debtor..

That's the role of guarantors, they've agreed to be liable for the debt so banks are perfectly right in pursuing them...

Teaandcoffee

I agree Killers1. I just don't think it's fair for anyone to ask somebody to guarantee a loan especially when the borrower has limited means to pay the loan back which is obviously going to spell trouble if they lose their job.

Sorry for going off topic.

NIMAN

Looking at the figures, and reading about how tough the criteria is getting, I'd haver to say you stand little chance. But don't let me deter you, by all means talk to your bank.

happyman81

PTSB are offering maximum 80% LTV before they would even consider. That kind of tells you the state of affairs out there. Don't feel rushed just because prices are low, they are going to be low for a decade, at least. Plenty of time.

killers1

Teaandcoffee wrote: »

I agree Killers1. I just don't think it's fair for anyone to ask somebody to guarantee a loan especially when the borrower has limited means to pay the loan back which is obviously going to spell trouble if they lose their job.

Sorry for going off topic.

You're right, it read as though you were surprised that the guarantor would be pursued... Banks don't really accept guarantors anymore and where they do the guarantor would need to be very strong financially and the borrower would need to qualify for at least 90% of the loan amount required in their own right which in this case they clearly won't

NIMAN

When I was applying for a mortgage over a yr ago, the bank still really wanted a 20% deposit.

I think the day of the 10% deposit are gone for now. And I think recent figures show that only 1 in 10 mortgage applications (or less) are successful. You really have to be a sure thing now to get any money out of them.

killers1

NIMAN wrote: »

When I was applying for a mortgage over a yr ago, the bank still really wanted a 20% deposit.

I think the day of the 10% deposit are gone for now. And I think recent figures show that only 1 in 10 mortgage applications (or less) are successful. You really have to be a sure thing now to get any money out of them.

I'm sorry but that is just completely inaccurate. The loan to values on offer from the banks are anywhere between 80-92%. If a banks criteria is that they lend up to 92% they will never say we'll only give you 85% if your income qualifies to borrow the higher figure. Some banks only offer a reduced LTV on 1 bed apartments. I'd also question the 1 in 10 applications being successful... recent figures from AIB suggest 4 out of 5 applications are being approved and my own experience of submitting applications to them would bear this out to be true... It is true that banks have tightened up their lending policy but their advertised loan to value ratio is what they will offer clients who qualify based on their incomes and proven repayment capacity.

Teaandcoffee

killers1 wrote: »

You're right, it read as though you were surprised that the guarantor would be pursued... Banks don't really accept guarantors anymore and where they do the guarantor would need to be very strong financially and the borrower would need to qualify for at least 90% of the loan amount required in their own right which in this case they clearly won't

A family member took out a mortgage last year, taking into account that both she and her partner were in part-time employment. They applied for a small mortgage similar to that of the OP. The lender (not sub-prime) approved them on a condition that they got a guarantor on board.

The guarantor was nominated and the mortgage was approved. Literally two weeks after they moved into the property one of them lost their job. The mortgage payments are been meet but just about. Crazy stuff.

I'm in a financial mess and just hate to see people following the same stupid path I took.

killers1

Teaandcoffee wrote: »

A family member took out a mortgage last year, taking into account that both she and her partner were in part-time employment. They applied for a small mortgage similar to that of the OP. The lender (not sub-prime) approved them on a condition that they got a guarantor on board.

The guarantor was nominated and the mortgage was approved. Literally two weeks after they moved into the property one of them lost their job. The mortgage payments are been meet but just about. Crazy stuff.

I'm in a financial mess and just hate to see people following the same stupid path I took.

As they took out a small mortgage they must have been very close to being approved in their own right and the guarantor just got them over the line. People tend to borrow without thinking how they would cope if either party lost their jobs which is all too common nowadays unfortunately. You really need to enter into such a big financial commitment with your eyes wide open and consider how you would cope under every eventuality.

NIMAN

killers1 wrote: »

I'm sorry but that is just completely inaccurate. The loan to values on offer from the banks are anywhere between 80-92%. If a banks criteria is that they lend up to 92% they will never say we'll only give you 85% if your income qualifies to borrow the higher figure. Some banks only offer a reduced LTV on 1 bed apartments. I'd also question the 1 in 10 applications being successful... recent figures from AIB suggest 4 out of 5 applications are being approved and my own experience of submitting applications to them would bear this out to be true... It is true that banks have tightened up their lending policy but their advertised loan to value ratio is what they will offer clients who qualify based on their incomes and proven repayment capacity.

On Point 1, I was told that by a senior mortgage advisor at the bank I got my mortgage from. We had over 20% as a deposit and their words were along the lines of "you're lucky you have such a good deposit as we are really tight on that now, even 10% now isn't good enough, you'd need about 20% to have any chance of being successful". I can only let people know on here what I have heard in real life.

On Point 2, I have definitely read and heard that the number of successful applications is low. I searched for some hard facts on the net and found it hard to get data, but here's a link from late 2011
http://www.franklenny.com/8_every_10_mortgage_applications_are_refused

To say my post was completely inaccurate was probably slightly inaccurate.

killers1

NIMAN wrote: »

On Point 1, I was told that by a senior mortgage advisor at the bank I got my mortgage from. We had over 20% as a deposit and their words were along the lines of "you're lucky you have such a good deposit as we are really tight on that now, even 10% now isn't good enough, you'd need about 20% to have any chance of being successful". I can only let people know on here what I have heard in real life.

On Point 2, I have definitely read and heard that the number of successful applications is low. I searched for some hard facts on the net and found it hard to get data, but here's a link from late 2011
http://www.franklenny.com/8_every_10_mortgage_applications_are_refused

To say my post was completely inaccurate was probably slightly inaccurate.

Maybe we've both been borderline inaccurate....? Do you mind me asking what bank you got your mortgage from? The type of conversation you are relating here is complete hearsay and is not an indication of the Bank's lending policy. If they said to you 'our policy doesn't allow us to lend over 80% ltv (even though we advertise higher)' than I would give it some weight...The fact remains if a bank lends up to 92% it lends up to 92%...

Below is a snippet of the articled you pointed to...

'A majority of brokers reported that between six and eight out of every 10 mortgage applications were declined in the second quarter of this year, PIBA's survey found
The main reason that applications are being refused is because of concerns over job security. Lenders are turning down potential new buyers because the applicant has not been in current employment for sufficient time or their employment is a fixed contract rather than permanent.'

Is it any wonder the brokers are having applications declined when they are submitting applications they know are outside of the banks criteria? It's like saying 7 out of 10 drivers crash their cars but 4 of those 7 deliberately drive into a wall as soon as they start the engine! Any broker knows how long you need to be in employment before a bank will consider the application and we also know what type of fixed contract employments banks are willing to lend to. 40% approval rate is a lot higher than the 10% you were suggesting.

NIMAN

Mortgage was from AIB.

I'm guessing the way it probably worked is that they will give out 92% mortgages if the applicants fulfilled certain other criteria, perhaps both working, earning x amount, in what was considered secure employment etc.

This % LTV may well have dropped if you were weaker on the other criteria.

killers1

NIMAN wrote: »

Mortgage was from AIB.

I'm guessing the way it probably worked is that they will give out 92% mortgages if the applicants fulfilled certain other criteria, perhaps both working, earning x amount, in what was considered secure employment etc.

This % LTV may well have dropped if you were weaker on the other criteria.

The applicants need to fulfill all criteria irrespective of the loan to value to be approved. Where some confusion arises in relation to loan to values is say for example when they assessed your application they decided the max amount you qualified for was €200k. You had decided you wanted to buy a property for €250k and had the €50k in savings to put towards it. In your case they are saying that we can't go over the 80% loan to value but it's not because of a policy decision in relation to the loan to value on your property it's simply that €200k is the max that you qualify for. If you had found a property for €218k they still would have been happy to give you €200k as you qualify for that amount and the fact that the loan to value is 92% if fine because their credit policy allows them to lend to this level.