Mortgage refusal. Options?

Son0vagun

I got refused on a mortgage of 117k from TSB. They are resubmitting my application for 100K. Which to be honest isn't gonna be enough for the house i wanted. Appartently i was 50e short in my deposable income!

Is there any point on me going to another mortgage lender? How much do they vary in what they offer?

What are my options? The house i wanted is 130k, i only have 20k to add to the 100k from the reapplied application, thats if i get it. So realisically i can only offer 115k for the house, cos i'll need money left over from my savings!

murphaph

Son0vagun wrote: »

What are my options?

Not to be intentionally blunt but your only option (if we've learned a single thing from the mess we are in) is to only buy a house you can comfortably afford. If you can't comfortably raise 130k then it's out of your price range.

Scortho

Obviously TSB don't think that you will be able to pay back the mortgage amount each month. In fairness to them they've been burned so badly that you can hardly blame them.
What I'd do is save like F**K for the next year or so. It will give you a larger deposit which reduces there risk of you going into negative equity. It will also show them that you are capable of repaying.
House prices still have a good bit more to fall before they bottom out. So you could find that the house you want now will be cheaper in 12 months time. Even if for some reason (200000 jobs are created in the next year or something) and prices go up it will only be by 1 or 2%. However the significantly larger deposit will still have you in a better position.

Son0vagun

Been saving 500e a month for the last 3 years. Have over 20k saved!

But I appreciate all your points, they make sense.

I'm just gutted.

Scortho

I know where you're coming from. Just take it as a godsend though! When my oul lad bought his house in the 80s at 21 he'd been saving for the bloody thing since 14!:eek:
As a result of virtually saving everything he earned for seven years he had feck all of a mortgage.
An extra 6 grand of a deposit will improve your chances of getting the mortgage. The banks do want to lend at the moment as thats how they make their money!
Also if you're not renting at the moment that may be one of the reasons!

davet82

Son0vagun wrote: »

So realisically i can only offer 115k for the house

so why not just put in an offer of 115k then and see what happens?

also i'd hold out maybe til next year as there are two things in your favour that will happen, the housing price register will (suppose to) be up and running next month and the mortgage relief will be gone at the end of the year which i reckon will have some effect in reducing prices another couple of percent but nobody really knows, its all a guessing game

anyways i hope things work out for you, best of luck

sparrowcar

Try BOI, they are lending. TSB are just pretending to lend at the moment.

Son0vagun

One thing I don't understand is why don't the bank just come back with what they can afford to give me. Instead of submitting a application for 117k rejecting it and then resubmitting one for 100k. Why didn't they just come to me with a sum they believe I can pay back based on my earnings!

dublin8681

Any reply Son0vagun ? Just curious as in similar situation with tsb ... refusing an amount and saying apply again for a lower amount and just wondering why they do not just give the limit i can borrow based on earnings instead of having to apply all over again....

Son0vagun wrote: »

One thing I don't understand is why don't the bank just come back with what they can afford to give me. Instead of submitting a application for 117k rejecting it and then resubmitting one for 100k. Why didn't they just come to me with a sum they believe I can pay back based on my earnings!

jimmycrackcorm

Just be patient and wait until you have have more saved or prices come down or both. What's the big panic for such a big life decision?

dufferlover

You obviously didn't pass their stress test. But as other posters have said there are other banks out there. We've been approved by AIB for 130,000 but in saying that we have 70,000 in savings.

Son0vagun

sparrowcar wrote: »

Try BOI, they are lending. TSB are just pretending to lend at the moment.

Best Advice ever! BOI just approved us for up to 180k. Thanks!

Meanwhile back at TSB we are still waiting for them to come back to me on the revised 100K, nearly two weeks later.

niall100

Try AIB just got a loan for 220k off them.

Son0vagun

dublin8681 wrote: »

Any reply Son0vagun ? Just curious as in similar situation with tsb ... refusing an amount and saying apply again for a lower amount and just wondering why they do not just give the limit i can borrow based on earnings instead of having to apply all over again....

No reply from TSB, I have wasted 6weeks with them messing me around. BOI have bent over backwards to help me. I haven't had to chase them once. I've gotten load approval in less then two weeks, forget about TSB and try BOI

dublin8681

Hey, Thanks for replying, yeah I am after wasting 9 wks now on TSB, Aib gotten back to me pretty quick over the last week or so in relation to it and seem positive. I agree defo forget about TSB anyone looking for approval at mo.

Son0vagun wrote: »

No reply from TSB, I have wasted 6weeks with them messing me around. BOI have bent over backwards to help me. I haven't had to chase them once. I've gotten load approval in less then two weeks, forget about TSB and try BOI

snubbleste

If you can prove that two banks refused you, then you can ask the government. Worst they can say is No. http://www.homechoiceloan.ie/

The_Conductor

Son0vagun wrote: »

Best Advice ever! BOI just approved us for up to 180k. Thanks!

Meanwhile back at TSB we are still waiting for them to come back to me on the revised 100K, nearly two weeks later.

Just remember- approval in principle from BOI is at branch level- actual approval goes before the credit panel in HQ. I'd be very suspicious of an offer in principle of 180k, when I've already been turned down for 120k elsewhere.

Also- as alluded to above- you are incrementing your savings by 500 a month- and property prices are continuing to fall (probably by .8-1% a month depending on property type and location). Another 5 months down the road- and even with TSBs revised terms- you'd happily meet their criteria- and have a lower LTV to boot.

greengrass87

murphaph wrote: »

Not to be intentionally blunt but your only option (if we've learned a single thing from the mess we are in) is to only buy a house you can comfortably afford. If you can't comfortably raise 130k then it's out of your price range.

so a question for you?
i rent with my girlfriend paying 790 a month


we both work bringing in over 3600 a month and were refused a mortgage recently for 140,000

your saying if we cant save all this money then we cant afford a house??

when in fact our mortgage repayment(if it was granted) would only be at the 550 a month mark?
how do you think most people own there homes?
with a mortgage is how and if they cant even be granted that then who are you to knock them?


i find it funny how the bank tell me we cant afford a mortgage and we go back to our rented property which costs us 250euro a month more than the mortgage would and get by no problem

rant over

flintash

greengrass87 wrote: »

so a question for you?
i rent with my girlfriend paying 790 a month


we both work bringing in over 3600 a month and were refused a mortgage recently for 140,000

your saying if we cant save all this money then we cant afford a house??

when in fact our mortgage repayment(if it was granted) would only be at the 550 a month mark?
how do you think most people own there homes?
with a mortgage is how and if they cant even be granted that then who are you to knock them?


i find it funny how the bank tell me we cant afford a mortgage and we go back to our rented property which costs us 250euro a month more than the mortgage would and get by no problem

rant over

This is very good point, that I always had in my head but never really manage to figure out myself- why?
Many people paying rents high enough, than what actual mortgage repayments would be. I live in Cork (maybe Dub situation is dif) and see too many house where mortgage repayment would be lower than rents. Where is the catch? No one has deposit? :eek:
I'm just applied for mortgage myself and looking for repayment 100EU more than my rent, and having saving history of more than 1000 a month I'll go nuts if they refuse to lend.

Scortho

Not defending murphaph but he does have a point. Believe it or not banks do want to lend money. Its how they make their money. However theyve been burned so much by previous bad lending decisions.
As a result of this they will only lend to people who they can be assured will pay it back.

Looking at your income and applying the 3x salary it would mean the most you could borrow is €129,600.
However they will take into account the fact that you aren't married when calculating risk.
They'll also deduct from your monthly wages a provision for the cost of children and childcare when calculating risk if you're of childbearing age.

If they see on your bank account statements, any money transfers to paddy power or other gambling sites, they will straight away refuse a mortgage as you're seen as too risky.

If to them, you're not saving enough or the size of youre deposit is to small they'll refuse the mortgage.

What you work as and the nature of your contract will also have an effect on the amount you can borrow. As well as that who you work for will have an effect.
If after the application of these factors and many others as well, you're perceived as a good risk they'll give you the money.

If there is one thing to be learned from the Celtic Tiger it's that people bought houses that they shouldnt have been able to buy on the basis that the house would never fall in value.:rolleyes:
They overstretched themselves borrowing sometimes 10x annual salary just so they could have a house.

greengrass87 go through your finances and see what can be cut for the time being. Then save as much as you can for the next year to build up as big a deposit as possible. The greater your deposit the less it's going to cost you in the long run.

Also house prices are still falling. How much more I don't know. However with the way the country is at the moment an increase in house prices that may occur in the next year with be marginal. it'll be 1-2% at the most. The increased deposit that you would have would counteract this rise as well as giving you lower repayments.

who_ru

Scortho wrote: »

If there is one thing to be learned from the Celtic Tiger it's that people bought houses that they shouldnt have been able to buy on the basis that the house would never fall in value.:rolleyes:
They overstretched themselves borrowing sometimes 10x annual salary just so they could have a house.

Do you think at all that the very same banks encouraged people to overstretch themselves by turning a very blind eye to their ability to repay by overlanding to them, thereby further inflating house prices, and therefore overall indebtedness, in the name of increasing market share. Tracker mortgages, 35-40 year loans, 110% - 120% mortgages, buy-to-let investment properties, foreign properties, holiday homes in Ireland, 2,3,4,5 credit cards. And thus creating the giant sized misery that is Ireland today for so many.

and as if that wasn't enough they then went bust thanks to their own grotesque irresponsibility & mismanagement, and now they sit in judgement of others in terms of financial prudence.

Scortho

who_ru wrote: »

Do you think at all that the very same banks encouraged people to overstretch themselves by turning a very blind eye to their ability to repay by overlanding to them, thereby further inflating house prices, and therefore overall indebtedness, in the name of increasing market share. Tracker mortgages, 35-40 year loans, 110% - 120% mortgages, buy-to-let investment properties, foreign properties, holiday homes in Ireland, 2,3,4,5 credit cards. And thus creating the giant sized misery that is Ireland today for so many.

and as if that wasn't enough they then went bust thanks to their own grotesque irresponsibility & mismanagement, and now they sit in judgement of others in terms of financial prudence.

Hang on a second. Go back through the threads on here about people moaning about needing a deposit to buy a house. Or people wanting a 110% mortgage.

I've yet to hear of a case before the courts about a bank holding a gun to a persons head and telling them you have to take out a mortgage. No one forced anyone to take a mortgage. There's a reason why you have to be over 18 before you can be approved for a loan. Its due to the fact that you are now seen as responsible for your own affairs.

Anyone who gets a mortgage gets one of their own accord. Reckless banks require reckless borrowers. If you put down on the mortgage form that you're income was 10000 more than it was or that you were going to rent out rooms then that was reckless. People saw that house prices were going up and up. They thought that they could buy an apartment and flip it on a year or two later for a nice profit. This occurs in every bubble throughout history.

All of the products that were created were created because there happened to be a demand for them.

Now some people just wanted a home to raise there family in and are in negative equity now. So they cant really trade up or move. However because they bought a home that they were comfortable raising a family in they're in a much better position now.

When you buy a house, you buy one that you can see yourself comfortably raising a family in and one that you are happy to live in for the rest of your life.
Not one that you can sell on in 2-3 years time for a profit so you can buy a bigger house by borrowing more money :rolleyes:

The_Conductor

By the way- its 3 times the primary salary and once the secondary salary, and bonuses and overtime do not count. So- a joint salary of 3,600 NET monthly is probably in the region 34k gross (each) (ballpark figures) resulting in the aforementioned 3 * 34 + 34 (130k) calculation.

The mortgage is only one of the costs of ownership of a property (even if it is the biggest one)- if you imagine that a current rent of 800, versus a mortgage of 550 means you're 250 a month better off- think again.

With property ownership you have ongoing upkeep of the property, insurance on the property, life assurance for the mortgage etc etc. If its an apartment or a leasehold property you will probably have management charges (which could easily be north of 2k per annum depending on the property and location).

Putting a rough 3,600 per annum aside for insurance, ongoing repairs etc- thats only 300 a month- means you're at 850 a month- and then we have the upcoming property tax, and the 2017 habitation (residential) tax. Suddenly your headline 550 mortgage payment doesn't look nearly as rosy as the 800 a month rent.......?

who_ru

Scortho wrote: »

If you put down on the mortgage form that you're income was 10000 more than it was or that you were going to rent out rooms then that was reckless.

isn't that what background checks were supposed to take care of? who's responsibility was that? Yes some people said they were going to rent out rooms, but the banks accepted this as income, and therefore increased the amount that the applicant could borrow.

Scortho

Yes the back ground checks were the banks problem. Clearly they weren't properly done.
However from there point of view property was rising. If the person failed to keep up repayments they would repossess. And they had no problem at all in getting repossessions.

Both sets of people are suffering now. The banks due to losses of value, ownership and multibillion losses. The person who overstated there income because they lied on a legally binding contract.

greengrass87

smccarrick wrote: »

By the way- its 3 times the primary salary and once the secondary salary, and bonuses and overtime do not count. So- a joint salary of 3,600 NET monthly is probably in the region 34k gross (each) (ballpark figures) resulting in the aforementioned 3 * 34 + 34 (130k) calculation.

The mortgage is only one of the costs of ownership of a property (even if it is the biggest one)- if you imagine that a current rent of 800, versus a mortgage of 550 means you're 250 a month better off- think again.

With property ownership you have ongoing upkeep of the property, insurance on the property, life assurance for the mortgage etc etc. If its an apartment or a leasehold property you will probably have management charges (which could easily be north of 2k per annum depending on the property and location).

Putting a rough 3,600 per annum aside for insurance, ongoing repairs etc- thats only 300 a month- means you're at 850 a month- and then we have the upcoming property tax, and the 2017 habitation (residential) tax. Suddenly your headline 550 mortgage payment doesn't look nearly as rosy as the 800 a month rent.......?

i can afford my rent payment of 800
and wouldnt mind paying 850 for all things you have mentioned if it was my own home that i was paying it all for
upkeep of my own home is something i would enjoy doing

so no my 800 rent is not rosey to me at all

Scortho

greengrass87 wrote: »

i can afford my rent payment of 800
and wouldnt mind paying 850 for all things you have mentioned if it was my own home that i was paying it all for
upkeep of my own home is something i would enjoy doing

so no my 800 rent is not rosey to me at all

You might be able to afford it. However the bank, after considering all the risks associated with yourself have decided that you're too much of a risk.

I know where you're coming from. I want to own my house. I dont want to pay rent for the rest of my life either.

But hang in there and save as much as you can. The greater deposit will prove to the bank that you're a better risk. It'll mean that you'll have to borrow less as well.

Amy2010

Son0vagun wrote: »

No reply from TSB, I have wasted 6weeks with them messing me around. BOI have bent over backwards to help me. I haven't had to chase them once. I've gotten load approval in less then two weeks, forget about TSB and try BOI

Move on. Forget about TSB unless their interest rates and charges are lower than other banks. Six weeks are FAR too long. Remember TSB need a massive bailout and that is why they're slow in making a decision! Shop around for history of lower rates, that is what I did. Some allow you to change your life insurance, some mortgage provider won't allow you to change life insurance or choose your own life insurance with somebody else, once you signed the dotted line and sometimes you can't change anything... that is ESB. I find them very expensive. I'm glad that I did this before I signed a dotted line. I'm with AIB.

You've also mentioned that you need monies from your savings. If you're planning on splashing your hard earned savings on furniture and stuff for the house. I'd use most of my savings to buy the house and furnish the house later on....six months to a year.

murphaph

greengrass87 wrote: »

so a question for you?
i rent with my girlfriend paying 790 a month


we both work bringing in over 3600 a month and were refused a mortgage recently for 140,000

your saying if we cant save all this money then we cant afford a house??

when in fact our mortgage repayment(if it was granted) would only be at the 550 a month mark?
how do you think most people own there homes?
with a mortgage is how and if they cant even be granted that then who are you to knock them?


i find it funny how the bank tell me we cant afford a mortgage and we go back to our rented property which costs us 250euro a month more than the mortgage would and get by no problem

rant over

You need to save more of a deposit and prove as best you can to the bank (like in the old days) that you are a good bet. You should probably marry to be honest as it will reduce your risk profile.

Rant at the bank if you have a problem with their lending practices, not at me but as already aluded to, home ownership costs much more than just the mortgage repayment and is set to become significantly more expensive (to bring it into line with most of Europe).

ladyeaston

I do know how you feel, since I was in my teens I always wanted a house, a home, my little place, a safe haven, I now have a house and after years still owe over 169 thousand I will die and that is the only way it will ever be paid if I was doing it all again I would do my best to buy a house within the monies that they are giving you so you dont have to spend all your life working to pay it off, the market is getting better for houses, enjoy your new home as bad as it is it is great.

ladyeaston

dublin8681 wrote: »

Hey, Thanks for replying, yeah I am after wasting 9 wks now on TSB, Aib gotten back to me pretty quick over the last week or so in relation to it and seem positive. I agree defo forget about TSB anyone looking for approval at mo.

I do know how you feel, since I was in my teens I always wanted a house, a home, my little place, a safe haven, I now have a house and after years still owe over 169 thousand I will die and that is the only way it will ever be paid if I was doing it all again I would do my best to buy a house within the monies that they are giving you so you dont have to spend all your life working to pay it off, the market is getting better for houses, enjoy your new home as bad as it is it is great.



I forgot to say try your local council for an annunity loan, you have to have two refusals from a lending bank then you may get the council loan

StillWaters

smccarrick wrote: »

Putting a rough 3,600 per annum aside for insurance, ongoing repairs etc- thats only 300 a month- means you're at 850 a month- and then we have the upcoming property tax, and the 2017 habitation (residential) tax. Suddenly your headline 550 mortgage payment doesn't look nearly as rosy as the 800 a month rent.......?

Hang on, the 2017 tax is just a proposal floated about, and would not be in addition to the property tax. Renters would be liable also.