Will we have any chance of a mortgage?

Annabananna

We have an oppportunity to buy our house that we are renting for 200k. We were talking to our friends over last few weeks and they been telling us that there no way we get a mortgage.

Here are our financial facts

We are one income family two kids under 3:

Husbands main income 70K
Bonus 10K
Husband bookkeeping business i do the waork but he declares it for tax 5k
Savings 4500Eur

Extra possible security
We have a site that my parents have given to us to build a house on should we transfer this into our name will the bank take it as security then.
We also have a life insurance policy which value each of our lifes at 300k each.

Outgoings
Rent 750Eur a month
Car loan 405Eur 3 yrs left on it
Personal loan 169Eur 2 yrs left on it
Credit card 2kEur balance to pay on it
Life ins 120Eur a month
health ins 140Eur a month
Saving 500Eur a month but we have to dip into now and again
Have we any chance of a mortgage?

Meant to add the LandLord has given us up to 18mths to get the deposit together

Thanks for reading.

fro9etb8j5qsl2

I applied for a mortgage recently and was told that the bank looks for a surplus of €1200 p/m left over in the bank account after the mortgage and any other loans are paid. Also, we were informed that we must have a minimum deposit of 10% of the asking price SAVED (lump sums deposited into bank account do not count). This was with BOI. Not sure if your site would count as security. Also, we were advised to clear as many loans as possible before application. Your car loan mightn't look so bad but credit card balances are seriously frowned upon by underwriters.

BTW we fulfilled all criteria but were refused on the grounds that our deposit was a lump sum lodgement (gift) and not savings. So they are pretty strict. My advice would be to go to your local bank and speak to a mortgage consultant. They will take all details into consideration and tell you whether or not you qualify.

the groutch

if you use your savings to clear your credit card bill & personal loan, and save like mad for the 18 months, then you should be able to get a mortgage.

thewing

@Mrspostman - was there a length of time you have to have been saving or was it an amount only i.e. 10% of total?

brownswiss

the groutch wrote: »

if you use your savings to clear your credit card bill & personal loan, and save like mad for the 18 months, then you should be able to get a mortgage.

....

Not so sure they should rely on this advice..... do they not want to buy the house now or fairly soon ?

the groutch

brownswiss wrote: »

....

Not so sure they should rely on this advice..... do they not want to buy the house now or fairly soon ?

no chance of getting it now imo, only €4500 total savings from a net income of over 50k a year doesnt look good on a mortgage application

msbrobe

Annabananna wrote: »

We have an oppportunity to buy our house that we are renting for 200k. We were talking to our friends over last few weeks and they been telling us that there no way we get a mortgage.

Here are our financial facts

We are one income family two kids under 3:

Husbands main income 70K
Bonus 10K
Husband bookkeeping business i do the waork but he declares it for tax 5k
Savings 4500Eur

Extra possible security
We have a site that my parents have given to us to build a house on should we transfer this into our name will the bank take it as security then.
We also have a life insurance policy which value each of our lifes at 300k each.

Outgoings
Rent 750Eur a month
Car loan 405Eur 3 yrs left on it
Personal loan 169Eur 2 yrs left on it
Credit card 2kEur balance to pay on it
Life ins 120Eur a month
health ins 140Eur a month
Saving 500Eur a month but we have to dip into now and again
Have we any chance of a mortgage?

Meant to add the LandLord has given us up to 18mths to get the deposit together

Thanks for reading.

Unfortunately carloan, personal loan and credit card debt will go against you in any mortgage application. In a recent chat with a mortgage advisor in one of the banks she told me they will look for evidence of the equivalent of a weighted mortgage repayment being paid directly from you account for rent/savings plan etc. Personal borrowings would not be counted positively as they are considered extra outgoings and thus reduce your disposable income.

killers1

Annabananna wrote: »

We have an oppportunity to buy our house that we are renting for 200k. We were talking to our friends over last few weeks and they been telling us that there no way we get a mortgage.

Here are our financial facts

We are one income family two kids under 3:

Husbands main income 70K
Bonus 10K
Husband bookkeeping business i do the waork but he declares it for tax 5k
Savings 4500Eur

Extra possible security
We have a site that my parents have given to us to build a house on should we transfer this into our name will the bank take it as security then.
We also have a life insurance policy which value each of our lifes at 300k each.

Outgoings
Rent 750Eur a month
Car loan 405Eur 3 yrs left on it
Personal loan 169Eur 2 yrs left on it
Credit card 2kEur balance to pay on it
Life ins 120Eur a month
health ins 140Eur a month
Saving 500Eur a month but we have to dip into now and again
Have we any chance of a mortgage?

Meant to add the LandLord has given us up to 18mths to get the deposit together

Thanks for reading.

What ages are you both?

lau1247

I'm curious as to why isn't the OP paying off the credit card balance with the savings??

Surely the interest charged by the credit card would mean they are paying interest unnecessarily seeing as the saving is more than sufficient to cover it..

StillWaters

You have 18 months to get yourself candidates for a mortgage. On the plus side you have a very healthy income and no childcare costs. You also have a site that may be securitised.

Clear that c/c debt. Can you get rid of that 400 car debt, sell car and buy a more reasonable car?
You also seem to be overinsured, are you insured for first life only, as that seems very expensive?

Annabananna

Hey OP here firstly thanks for all your replies.
Firstly I am 29 and hubbie is 37.
I meant that our credit card has a balance limit of 2000Eur not that we owe the credit card company the whole 2000e there is a balance payable of 55eur that will be cleared the 14th of month the balance gets paid every month. Someone told us having a credit card that has over 1k limit can count against you.
Our life insurance insures each life for 300k and kids for 25k along will illness benefit.

JoeyJJ

I think you need approx 21k in savings before you would get one for 200k in my opinion.

16,000 for the 8% of price
1,500 for fees
3,500 for expenses

Cuddlesworth

Annabananna wrote: »

Hey OP here firstly thanks for all your replies.
Firstly I am 29 and hubbie is 37.
I meant that our credit card has a balance limit of 2000Eur not that we owe the credit card company the whole 2000e there is a balance payable of 55eur that will be cleared the 14th of month the balance gets paid every month. Someone told us having a credit card that has over 1k limit can count against you.
Our life insurance insures each life for 300k and kids for 25k along will illness benefit.

I would be surprised if your husband didn't already have a life assurance policy(3 years wages) with his company.

TheDriver

Annabananna wrote: »

Hey OP here firstly thanks for all your replies.
Firstly I am 29 and hubbie is 37.
I meant that our credit card has a balance limit of 2000Eur not that we owe the credit card company the whole 2000e there is a balance payable of 55eur that will be cleared the 14th of month the balance gets paid every month. Someone told us having a credit card that has over 1k limit can count against you.
Our life insurance insures each life for 300k and kids for 25k along will illness benefit.

do you mean that you in theory have a debt of 2000 but are only required to pay 55 a month to keep them at bay and racking up massive interest on it? Or you have a limit but owe them nothing?

Annabananna

Hey OP here

Re credit card as of 14 of this month we will owe nothing on it we only use it now and again.
My hubbie does have death in service cover or 3 times his wages but if i popped my clogs or either of us got a serious illness we had no cover