Getting Mortgage

homer1916

I am a 30 year old guy that is engaged to a 29 year old woman and we are hoping to get a mortgage before the interest relief goes in Dec. I am an accountant on 50k and she is on 35k. How much of a morgage do you think we will get? We pay 1200 rent and save 1000 on top of this. So we could repay 2200 as we live, but how much would the banks give us?

Moonbeam

It depends on your savings andnifnyounhave any loans.

homer1916

Moonbeam wrote: »

It depends on your savings andnifnyounhave any loans.

No loans and 50k savings

Praetorian Saighdiuir

I bought this time last year.

Combined savings of 80k, combined salries of 70k. Partner had business loan which was ahead on payments.

I am in a secure government job, partner self employed. Neither of us had a bad credit rating and no other outstanding loans.

Total morgage offered by KBC €261k

AIB would not touch us
BOI was less than €200k
Ulster was just over €200k

homer1916

benwavner wrote: »

I bought this time last year.

Combined savings of 80k, combined salries of 70k. Partner had business loan which was ahead on payments.

I am in a secure government job, partner self employed. Neither of us had a bad credit rating and no other outstanding loans.

Total morgage offered by KBC €261k

AIB would not touch us
BOI was less than €200k
Ulster was just over €200k

How much was your partners loan?

We are first time buyers so I'm hoping that will stand to us

killers1

homer1916 wrote: »

I am a 30 year old guy that is engaged to a 29 year old woman and we are hoping to get a mortgage before the interest relief goes in Dec. I am an accountant on 50k and she is on 35k. How much of a morgage do you think we will get? We pay 1200 rent and save 1000 on top of this. So we could repay 2200 as we live, but how much would the banks give us?

You'll get approx €370k based on your proven repayment capacity if you have been paying rent/savings at that level for a while.. You salaries would allow you to borrow up to circa €430k but to obtain approval at that level you'd need to show a proven affordability at around €2,500pm as opposed to the €2,200 you are demonstrating now..

Praetorian Saighdiuir

homer1916 wrote: »

How much was your partners loan?

We are first time buyers so I'm hoping that will stand to us

The remainder of the loan at the time was 45k. I was 30 and she was 28 when we applied, also 1st time buyers.

Pay no attention to "our combined salaries equal x amount so I should be approved for a mortgage of x amount"

My personal experience and from friends experiences in the last year, reflect that banks are NOT lending anywhere near the usual multiples according to your salaries.

Best of luck

killers1

benwavner wrote: »

The remainder of the loan at the time was 45k. I was 30 and she was 28 when we applied, also 1st time buyers.

Pay no attention to "our combined salaries equal x amount so I should be approved for a mortgage of x amount"

My personal experience and from friends experiences in the last year, reflect that banks are NOT lending anywhere near the usual multiples according to your salaries.

Best of luck

Banks don't really work off multiples anymore. The higher the combined salary the higher % of your monthly income they will allow you to spend on your mortgage repayment on a monthly basis resulting in greater loan amounts. You must however have a proven repayment capacity for the stressed repayments on the mortgage amount requested as evidenced by way of rent, savings or loan repayments not continuing after drawdown..

homer1916

killers1 wrote: »

benwavner wrote: »

The remainder of the loan at the time was 45k. I was 30 and she was 28 when we applied, also 1st time buyers.

Pay no attention to "our combined salaries equal x amount so I should be approved for a mortgage of x amount"

My personal experience and from friends experiences in the last year, reflect that banks are NOT lending anywhere near the usual multiples according to your salaries.

Best of luck

Banks don't really work off multiples anymore. The higher the combined salary the higher % of your monthly income they will allow you to spend on your mortgage repayment on a monthly basis resulting in greater loan amounts. You must however have a proven repayment capacity for the stressed repayments on the mortgage amount requested as evidenced by way of rent, savings or loan repayments not continuing after drawdown..

Thanks for the help. Here is my plan, buy a site before morgage interest relief goes for 175k, then build on it and the house will cost approx 250k to build. I would hope for it to be build in 2014 and draw the remaining 250 down then, what is the best way to go about it? I would hope to be earning another 10k by 2014

Can I get a interest relief mortgage of 175 now and top up by 250 for the build in 2 years?

the groutch

before even thinking what the bank will offer, you should think of what you can afford

375k is alot to borrow off those wages.
over 30 years, your 2,200 a month equates to a variable rate of 5.7%, anything over that and you're over budget. and interest rates are only going one way, with 6%+ a very realistic possibility within the next few years
then you're not factoring in the risk of one of you losing your job, or if yous have kids your fiancee would be out of work for a good while
also if there are circumstances that mean you might have to move, and borrowing 88% of the value means you're more likely to be in negative equity at some stage.

imo, the most you should be looking to borrow is 250k

homer1916

the groutch wrote: »

before even thinking what the bank will offer, you should think of what you can afford

375k is alot to borrow off those wages.
over 30 years, your 2,200 a month equates to a variable rate of 5.7%, anything over that and you're over budget. and interest rates are only going one way, with 6%+ a very realistic possibility within the next few years
then you're not factoring in the risk of one of you losing your job, or if yous have kids your fiancee would be out of work for a good while
also if there are circumstances that mean you might have to move, and borrowing 88% of the value means you're more likely to be in negative equity at some stage.

imo, the most you should be looking to borrow is 250k

You would not get much for 250k in Dublin. My own opinion is that it will be tough for the first 3 or 4 years, but with house prices are at an all time low and I cannot see them falling much lower, I think now is the time to buy. I am a qualified accountant and have been on the same salary since 2007, but I should be on at least 10k more and in 4 or 5 years, I would be hoping to be on 60k with a decent bonus and pension. The is how i hope to pay for the costs of a crete and that. Of course if one of us loses our job, negative equity is likely but I am more of an optimist than that

My own opinion is 350k is a reasonable amount to borrow for Dublin, anything over that is pushing it, but I think its worth thw risk, the euro could collapse and depression could occur, I just dont think it will get that bad

Gaz

I think your nuts wanting to borrow that much, 2200 a month is mental. And in my opinion a boom time type of purchase.

I think this house is stunning and it had an asking of 269.

http://www.myhome.ie/residential/brochure/26-woodlawn-park-santry-dublin-9/1910753

There is value in Dublin if you look.

homer1916

Gaz wrote: »

I think your nuts wanting to borrow that much, 2200 a month is mental. And in my opinion a boom time type of purchase.

I think this house is stunning and it had an asking of 269.

http://www.myhome.ie/residential/brochure/26-woodlawn-park-santry-dublin-9/1910753

There is value in Dublin if you look.

Who said I would be paying 2200? A 375 mortgage is about 1500 a month, interest rates will go up but it will be 7 or 8 years before repayments are 2200, in which time my salary increases should cover this

Henry Ford III

homer1916 wrote: »

You would not get much for 250k in Dublin. My own opinion is that it will be tough for the first 3 or 4 years, but with house prices are at an all time low and I cannot see them falling much lower, I think now is the time to buy. I am a qualified accountant and have been on the same salary since 2007, but I should be on at least 10k more and in 4 or 5 years, I would be hoping to be on 60k with a decent bonus and pension. The is how i hope to pay for the costs of a crete and that. Of course if one of us loses our job, negative equity is likely but I am more of an optimist than that

My own opinion is 350k is a reasonable amount to borrow for Dublin, anything over that is pushing it, but I think its worth thw risk, the euro could collapse and depression could occur, I just dont think it will get that bad

€250k is a lot of money. It's 5 years salary for you. Borrowing €350k is nuts on your incomes.

Think harder about what you are proposing. Much harder.

p.s. Any qualified accountant I know doesn't ask for mortgage advice here either. Frankly I'm a bit suspicious.

homer1916

Henry Ford III wrote: »

homer1916 wrote: »

You would not get much for 250k in Dublin. My own opinion is that it will be tough for the first 3 or 4 years, but with house prices are at an all time low and I cannot see them falling much lower, I think now is the time to buy. I am a qualified accountant and have been on the same salary since 2007, but I should be on at least 10k more and in 4 or 5 years, I would be hoping to be on 60k with a decent bonus and pension. The is how i hope to pay for the costs of a crete and that. Of course if one of us loses our job, negative equity is likely but I am more of an optimist than that

My own opinion is 350k is a reasonable amount to borrow for Dublin, anything over that is pushing it, but I think its worth thw risk, the euro could collapse and depression could occur, I just dont think it will get that bad

€250k is a lot of money. It's 5 years salary for you. Borrowing €350k is nuts on your incomes.

Think harder about what you are proposing. Much harder.

p.s. Any qualified accountant I know doesn't ask for mortgage advice here either. Frankly I'm a bit suspicious.

You think 350k is nuts for a joint income of 85k, are you smoking something, it's 4 times our salaries and we have no loans or debts. We currently rent at 1200 and save 1000 a month. Repayments on a 350k mortgage are 1500 a month

Yes, I am beginning to regret asking the question here when I get replies like yours, I am a qualified accountant, not a mortgage broker

Henry Ford III

homer1916 wrote: »

You think 350k is nuts for a joint income of 85k, are you smoking something, it's 4 times our salaries and we have no loans or debts. We currently rent at 1200 and save 1000 a month. Repayments on a 350k mortgage are 1500 a month

Yes, I am beginning to regret asking the question here when I get replies like yours, I am a qualified accountant, not a mortgage broker

It's 4 x your combined salaries, or 7 x yours.

homer1916

Henry Ford III wrote: »

homer1916 wrote: »

You think 350k is nuts for a joint income of 85k, are you smoking something, it's 4 times our salaries and we have no loans or debts. We currently rent at 1200 and save 1000 a month. Repayments on a 350k mortgage are 1500 a month

Yes, I am beginning to regret asking the question here when I get replies like yours, I am a qualified accountant, not a mortgage broker

It's 4 x your combined salaries, or 7 x yours.

Yeah, I'm not getting the morgage on my own, it's a joint mortgage. I don't live my life on the basis that one of us will lose our jobs or misery awaits us

davet82

homer1916 wrote: »

not a mortgage broker

best advice, give a broker a call or just walk into any bank, the advice/information is free and usually will tell you what they'll give on paper and then what they'll actually give you in reality, my experince anyways

Henry Ford III

homer1916 wrote: »

Yeah, I'm not getting the morgage on my own, it's a joint mortgage. I don't live my life on the basis that one of us will lose our jobs or misery awaits us

Have you seen the misery thousands are going through who borrowed big, in the belief that selling each other houses would make us all rich?

It's not that long ago when 2.5 x primary income plus 1 x secondary income were the max. loans permissable. Very few defaults at those levels, even with way higher interest rates.

This is advice, and not a criticism btw.

Don't be concerned with "what'll cost to repay?" Concentrate instead on "is this house value for money at €xyz". Cheap and easy credit is what poured petrol on the flames of the property market before it's shuddering halt.

Henry Ford III

davet82 wrote: »

best advice, give a broker a call or just walk into any bank, the advice/information is free and usually will tell you what they'll give on paper and then what they'll actually give you in reality, my experince anyways

Yes, but a brokers sole interest is getting as much money loaned out as possible, as this is the basis on which they are paid.

They don't and won't care if it's the correct thing for you to do.

It's a very clear conflict of interest imho.

RoverZT

You are in a great position now Homer.

Your living the life imo.

Great wages, substantial savings of 50k etc, saving 1000 a month, probably going on holidays to nice places, want for nothing etc, no financial worries etc.

I think you should keep your current life for a few more years, it's not bad is it?;)

Only people that should be buying property now, are cash buyers imo.

Others not in that position are taking a huge risk.

leahyl

RoverZT wrote: »

You are in a great position now Homer.

Your living the life imo.

Great wages, substantial savings of 50k etc, saving 1000 a month, probably going on holidays to nice places, want for nothing etc, no financial worries etc.

I think you should keep your current life for a few more years, it's not bad is it?;)

Only people that should be buying property now, are cash buyers imo.
Others not in that position are taking a huge risk.

Can you explain your reasoning for this? I'm not trying to be smart btw - just curious; do you think that now is not the time to buy because house prices will drop further or do you think non-cash buyers shouldn't be buying at all for a few years??

I am a FTB (well hope to be soon) so just curious as to why you think I'd be taking a huge risk if I am in a pretty stable job and can handle a mortgage that reflects my salary.

Henry Ford III

Chances are prices will continue to fall (there's nothing to support them) and that interest rates will increase.

DublinDilbert

homer1916 wrote: »

Yeah, I'm not getting the morgage on my own, it's a joint mortgage. I don't live my life on the basis that one of us will lose our jobs or misery awaits us

Its great to have that out-look, there's lots of people on the dole now who had a similar way of thinking. Loosing ones job doesn't have to be misery once you've factored it in as a possibility. I haven't looked back since the company I worked for pulled out of Ireland 5 years ago, I started my own company, work 3 days most weeks and really enjoy life. I couldn't of done any of this if I was being strangled by a mortgage.

There's a big difference between someone who borrowed €350K on a tracker mortgage and borrowing €350K at today's rates. Today's rates are only going to increase as the banks seek to subsidise the loss making trackers.

No one here is saying you shouldn't buy a property, it sounds like you are in an ideal position to buy one. I think that people just can't believe that you can't find anything suitable for €250K.

leahyl

Henry Ford III wrote: »

Chances are prices will continue to fall (there's nothing to support them) and that interest rates will increase.

Wonderful:rolleyes::pac:

I don't know whether that's a good thing or not! - that house prices will fall further but that interest rates will increase I mean

StillWaters

DublinDilbert wrote: »

I haven't looked back since the company I worked for pulled out of Ireland 5 years ago, I started my own company, work 3 days most weeks and really enjoy life. I couldn't of done any of this if I was being strangled by a mortgage.

why not? If mortgage repayments are less or equal to rent it makes no odds. Unless you're getting RA or living with the folks, you still have to make the rent.

Henry Ford III

StillWaters wrote: »

why not? If mortgage repayments are less or equal to rent it makes no odds. Unless you're getting RA or living with the folks, you still have to make the rent.

I think it's maybe paid off.

DublinDilbert

Henry Ford III wrote: »

I think it's maybe paid off.

LOL I wish. Any of the places I have lived in the mortgage has always been more expensive that renting. In this case the €1600/month mortgage repayment will almost certainly be more expensive than renting a similar property in the same area.

maddragon

Homer,
If you want to build your own house I'ld go for it. If you have identified a suitable site for 175k and it's where you want to live you can easily cover the repayment from the €1000 you are saving now.

Take your time then and identify exactly what you want to build and who you want to build it. IMO you should comfortably build a house for considerably less than €100 per sq ft. You can always extend in future years if and when finances allow. I missed the opportunity to buy the site of my dreams in 2005. Of course it would be cheaper now but someone else bought it and built an eyesore on it.

If you can afford what you want just do it. Yeah the Israelis could start WW3 with Iran tomorrow or the poles (not the Eastern european type) might shift in December 2012 but who wants to live life like that.

the groutch

Homer, myself or others aren't suggesting you be a pessimist and expect bad things to happen, it's more a case of having all your based covered.

and €300k (250 loan + your 50 savings) buys alot more than you think, if you offered that on a house with an asking of 350k, more often than not you'd get it accepted.

here's an example of what you'd get for that sort of money

http://www.myhome.ie/residential/brochure/11-phoenix-court-castleknock-dublin-15/1611334

thewing

Does it come with the boat?