Bidding on a house without Mortgage Approval

wicklow_hunter

Hi All,

Ok so heres my dilema - A property has recently come up for sale that i am very much interested in buying. Asking price is 280k - i reacon it will go for 250k as its old and needs a little tlc. i have been good saving for nearly 6 years and living at home with the folks so i got half the price of the house in savings 125k. So i need a morgage for the remaining 125K Approx.


I have been turned down by BOI morgage late last year for two reasons:

1. Havent served probationary period with the company i work for - I have been working on contract with this company for 2 years and they eventually made me permenant last october - A Multinational in Waterford - on 45K Gross aged 28, Single Male

2. Thinking the banks were going under in 2010 / 11 i withdrew a large amount of my savings in cash over a 2 year period - I raised eyebrows when i tried explaining to them the reason why i did it and they didnt buy into it and turned me down

So im worried that i will not be able to acquire a morgage with other lenders also

I have an appointment with aib morgage advisor on monday and hopefully they will be more eager to lend than boi

I have only 2 months on my probationary period in my job and i like to think that i would be approved when my probationary period is complete...

What are peoples thoughts on bidding on property without approval for a morgage ?

Looking at the property market in my area for 2 years now and I dont want to miss on this one as its a one of a kind in the right location

StillWaters

Dont bid without approval in principle at least. You are wasting everyones time. Go back to BoI and see if they will approve you now, although I doubt it if you are on probation. AIB are not really lending.

pwurple

Don't bid unless you have approval. A lot of agents won't take your bid anyway.

You will get nowhere with AIB. You need to be a cookie cutter customer for them.

Put your cash back into some banks or credit unions, or post office or some kind of institution where you get a statement. Where is the 125k now, stuffed into the mattress? You're missing out on thousands of euro of interest a year for a start. The bank won't believe it exists unless you can show some evidence of it. There are also money laundering regulations to deal with now. You will need to prove where the cash came from.

Try Ulster bank or KBC for mortgage approval, we found they approved the highest amounts, but you might need to have a savings or current account with them.

I opened accounts in most banks a few years ago, and put small amounts in every month, for the sole purpose of gaining a history of being their customer.

Put in the mortgage application, with a note that you will show evidence of the probationary period completing in 8 weeks. They might give you provisional approval, based on that probabtion ending.

Or, just wait the 8 weeks and get yourself in order then... do you think the property will sell within that time?

Doom

I have had two people do this with me, please don't, its very unfair. sellers are in a difficult place too.
I had another query lately 1st question I asked them when they started talking money, did they have mortgage approval? Answer...No.
Told them to come back when they did.....never came back!

EricPraline

wicklow_hunter wrote: »

What are peoples thoughts on bidding on property without approval for a morgage ?

As others have said, just don't do it. I appreciate that you're concerned about missing out on the right property, but without approval you won't be able to complete anyway, so you'll just end up being disappointed, plus you are likely to seriously inconvenience the vendors and possibly other legitimate buyers.

wicklow_hunter

Ok, it seems clear from various posts not to bid. Will having a guarantor ie parents help my morgage application?. They both would have assets in excess of a million euro.I dont personally want to go this route but it could be worth exploring if it would ensure i can get a mortgage.

Any thoughts any1?

Barracuda1

wicklow_hunter wrote: »

Hi All,

Ok so heres my dilema - A property has recently come up for sale that i am very much interested in buying. Asking price is 280k - i reacon it will go for 250k as its old and needs a little tlc. i have been good saving for nearly 6 years and living at home with the folks so i got half the price of the house in savings 125k. So i need a morgage for the remaining 125K Approx.


I have been turned down by BOI morgage late last year for two reasons:

1. Havent served probationary period with the company i work for - I have been working on contract with this company for 2 years and they eventually made me permenant last october - A Multinational in Waterford - on 45K Gross aged 28, Single Male

2. Thinking the banks were going under in 2010 / 11 i withdrew a large amount of my savings in cash over a 2 year period - I raised eyebrows when i tried explaining to them the reason why i did it and they didnt buy into it and turned me down

So im worried that i will not be able to acquire a morgage with other lenders also

I have an appointment with aib morgage advisor on monday and hopefully they will be more eager to lend than boi

I have only 2 months on my probationary period in my job and i like to think that i would be approved when my probationary period is complete...

What are peoples thoughts on bidding on property without approval for a morgage ?

Looking at the property market in my area for 2 years now and I dont want to miss on this one as its a one of a kind in the right location

Fair play to you for saving that amount of money. I was surprised that you were turned down usually banks love to see good savers.

StillWaters

wicklow_hunter wrote: »

Ok, it seems clear from various posts not to bid. Will having a guarantor ie parents help my morgage application?. They both would have assets in excess of a million euro.I dont personally want to go this route but it could be worth exploring if it would ensure i can get a mortgage.

Any thoughts any1?

No, those days are gone. There are 2 things you need to fix in order to get approval.
Savings record and proof of savings
Your probationary period completed

Where are your savings? If you moved them to a foreign bank, that will be ok, as long as you are tax compliant, same if you moved them into shares.

riclad

PUT 30k, in tsb, say,50k, in aib and the rest in boi,
You put money in bank, you build up a relationship, you are a valued customer,eg joe bloggs has an account her for 3 years,
eg more likely to get a loan,
PUT in a high interest deposit accounts ,not current accounts.
Think 2 or 3 years ahead.
DO NOT go to a bank and say,i took out all my money, cos i expected you to go bust in the next month,
by the way,can i borrow 100k.IT sounds abit rude.
its like saying to a woman ,you look awful ,in that dress,you are too fat to wear it.
eg honesty is not always necessary,or a good idea in real life.
if you nothing good to say,say nothing.Banks don,t usually give out mortgages,unless you are working in a permanent job in a company.
WHEN you put 40k,,into a bank you,are showing trust in them,
as they put trust in you if they give you a loan.

Fiery mutant

There are other ways hunter. Look into getting a mortgage from a foreign bank. I m in the middle of doing it now, and i tell you, a hell of a lot easier to deal with than the banks back home.

Of course not all foreign banks are going to do it, but research it a bit and you may come across one that will suit you.

killers1

Op,

The biggest issue you have at the moment is where are your savings? Before you talk to AIB I would suggest you put them back into an account so you can show you have them. You can also use the previous statements to show the funds being withdrawn. I've come across a few cases where people withdrew funds from savings for fear of the banks going under and the banks don't have an issue with this but are less likely to believe you've a wad of cash under the mattress. You can gain approval now subject to successfully completing your probation prior to loan offer. It was mentioned above that 'AIB aren't really lending'... they're lending more than anyone else at present.
At 50% loan to value I'd suggest AIB as they have the cheapest rate available. As for bidding without approval, it happens in approx 30% of cases. By the time you need to sign contracts you will have had enough time to have the loan formally approved and a loan offer issued.

Glenbhoy

Lodging that amount of cash will undoubtedly trigger a money laundering investigation, it's unavoidable no matter what way you try and do it, therefore, to save time, lodge it into one bank and make sure you have all the documentation in place to back up your story or you could well get a visit from CAB (seriously).

wicklow_hunter

Glenbhoy wrote: »

Lodging that amount of cash will undoubtedly trigger a money laundering investigation, it's unavoidable no matter what way you try and do it, therefore, to save time, lodge it into one bank and make sure you have all the documentation in place to back up your story or you could well get a visit from CAB (seriously).

i lodged 60 k before christmas and they were ok about it. they could see a history of regular withdrawls but still turned me down at the time

Visited Aib today they seem keen to lend once i jump through the hoops - fingers crossed

next on the list is Kpc and ulster bank...

riclad

I,M not a tax expert, but i would have thought ,if you have 40k, in bank x, boi, and move it to aib ,it would not trigger an investigation.
one irish bank,to another irish bank.

Glenbhoy

riclad wrote: »

I,M not a tax expert, but i would have thought ,if you have 40k, in bank x, boi, and move it to aib ,it would not trigger an investigation.
one irish bank,to another irish bank.

It wouldn't, but when you move it out of Bank x, put it under the bed for two years and then lodge it into Bank Y, it will.

Lodgements of more than 12K cash or an accumulation of 12K cash lodged in a relatively short time span trigger an alert to the bank's money laundering officer. He then contacts the branch manager to ascertain the source of these funds and then decides if additional documentation is required to verify the source. In this instance I'm very surprised that OP was able to lodge 60K without quite a few questions being asked, regular withdrawals in the past or not.

RoverZT

Worst thing you can do is use all your savings of 125k on paying for half the house.

It's madness imo.

You will be left with nothing if something goes sour.

Putting the 25k towards the deposit, solicitor fees etc is grand, but not the 125k.

I would put the 100k in a savings account and use the interest to pay off some of the mortgage, that way you have some extra money coming in, have all your savings and if something ever did happen like losing your job, getting sick etc you would have cash on hand and could renegotiate with the bank.

If you give them your cash, they hold all the cards.

wicklow_hunter

RoverZT wrote: »

Worst thing you can do is use all your savings of 125k on paying for half the house.

It's madness imo.

You will be left with nothing if something goes sour.

Putting the 25k towards the deposit, solicitor fees etc is grand, but not the 125k.

I would put the 100k in a savings account and use the interest to pay off some of the mortgage, that way you have some extra money coming in, have all your savings and if something ever did happen like losing your job, getting sick etc you would have cash on hand and could renegotiate with the bank.

If you give them your cash, they hold all the cards.

You have to pay tax on interest at approx 35% approx not sure what the rates are on on fixed term savings 3-3.5 at best... effictevly looking at net of 2% .

Repayments will double also so instead of 800pm its 1600pm.

Was planning on holding bk 10k rainey day fund. i reacon i could rent it for 800pm if thinks go pear shaped in my job...

Moove bk in with parents is plan b