Bank Loyalty for Mortgage Applications

alistatic

Hi guys!

Just looking some advice - does anyone know if bank loyalty counts for anything when applying for a mortgage?

I'm looking to apply for a mortgage for the next 6-12 months. I've been with AIB for the past 15 years, but due to their bank charges I was considering moving to Permanent TSB. Do you think it would be worthwhile sticking it out with AIB just for a better chance of getting a mortgage???

Thanks!

Orlaw3136

Presuming you are talking about a home loan I would say it counts for nothing, as these days it is a case of 'computer says yes/no', and it is the underwriters who are working the computers. The banks are no longer engaged within the local community and have not been for some time.

That said, especially if you're self-employed or otherwise a 'non-standard' applicant, (I am) having your business with a given bank can smooth your way a bit, I think.

In my experience (2013), the fact that my banking was with a helped in terms of them explaining some aspects of my accounts (self-employed) and cash-flow (lumpy). That said I got approved elsewhere as well so maybe I'm overstating it.

I think if you're a PAYE earner 'standard' applicant loyalty on your part counts for absolutely zilch. You're either a solid prospect to them or not, according to their formula, whether you walked in off the street or have your communion money on deposit with them.

msshono

No, your approval is based on affordability to make stressed repayments. Get your paperwork together and submit it to a selection of banks for approval - see who approves you and who has the better interest rates out of those who do approve you.

Make some 'annonymous' phones calls first to branch to find out if they'll look at your application without a chosen property/address (approval in principle) - if not, pick, from the property websites, a relatively realistic (location/price) property you'd purchase and use that address for the application.
Also ask the branch for a list of docs you'll need.

Also, be careful if you go switching accounts to another bank. It rarely goes smoothly e.g. DD's not switching over and going unpaid because your salary has switched over and is gone into the new account but no money in the old account where the DD is still set up. This could result in messy transaction history and bank statements, unpaid charges appearing on statements tainting your financial credibility which could affect your getting mortgage approval - obviously if it's the old banks/DD recipients fault you could ask for them to provide confirmation of this in writing, but could be a wholelot of hassle. Don't blame you for wanting to switch to avoid charges but just be warned the process is a mess in most banks.

Orlaw3136

msshono wrote: »

Make some 'annonymous' phones calls first to branch to find out if they'll look at your application without a chosen property/address (approval in principle) -

Why would it have to be anonymous ?

Anyway,

BOI - want you to nominate a property in order to make the application. Pick something that's close enough to what you're looking for and submit it. This is for the purpose of 'full' approval. I was told they don't do approval in principle without specifying a property.

PTSB - will do approval in principle very quickly on the basis of a short meeting (but the letter is pretty dilute; if I were a seller I wouldn't place much stock in it).

KBC - do 'full' approval in principle for a specified amount without nominating a property, requiring that you lodge a full application (six months bank statements & credit card accounts, audited accounts if self-employed proof of employment if not etc. etc. etc. etc.).

That's based on my own experience in the last 2 months of those institutions. Might save the OP some time ringing up branches and coming up with fake names.

msshono

Orlaw3136 wrote: »

Why would it have to be anonymous ?

Fair point, just sometimes your better off ask all the questions you need to without disclosing who you are if there's a risk that asking these questions might disclose info about you that could prevent your getting approval - then you can go in with the 'right' info and what they 'want to hear' from you. I know you cant hid the figures but your circumstances do also count. In essence, have the upper hand where possible.

Orlaw3136

msshono wrote: »

Orlaw3136 wrote: »

Why would it have to be anonymous ?

Fair point, just sometimes your better off ask all the questions you need to without disclosing who you are if there's a risk that asking these questions might disclose info about you that could prevent your getting approval - then you can go in with the 'right' info and what they 'want to hear' from you. I know you cant hid the figures but your circumstances do also count. In essence, have the upper hand where possible.

Not having a go at you or anything but can you give an example of why a person might give the 'right' info which was not the 'true' info ?

I mean...you still ultimately have to submit your 'actual' info for the application...no good to you to have bumped up your income/minimised your debts if you can't support what you've provided. You just won't get approved for what you've applied for, even if you were told something else on the 'right' info.

(leaving aside that plenty of people who were let tell howlers on loan app forms wish they'd been caught out before the drawdown now)

msshono

Orlaw3136 wrote: »

msshono wrote: »

Not having a go at you or anything but can you give an example of why a person might give the 'right' info which was not the 'true' info ?

I mean...you still ultimately have to submit your 'actual' info for the application...no good to you to have bumped up your income/minimised your debts if you can't support what you've provided. You just won't get approved for what you've applied for, even if you were told something else on the 'right' info.

(leaving aside that plenty of people who were let tell howlers on loan app forms wish they'd been caught out before the drawdown now)

Ya, not talking about figures, as I said you cant hide/change those. But for e.g. some banks won't approve you if apply for a sole mortgage but you're engaged/have a partner, even if you could meet approval criteria on your own finances - this is because the partner would have some legal rights over the property if they were residing in it and contributing to its upkeep. They'd insist on a joint application but it could be the case that the other party has a poor credit history (very common in these times) and causes the jount mtg application to be declined. In this case the applicant would be better off not mention being engaged or having a partner at all - it might be their only hope of owning their own home.
There's plenty of reasons why the bank can decide to decline an application outside of meeting the financial assessment criteria. While the underwriter uses formulas to financially assess, it's their application of bank policies (which sometimes can be unfairly stringent) and the underwriters subjectivity of the applicants circumstances that can make or break the approval.

L1011

It saved me a humongous amount of paperwork - was able to sign a single form allowing the mortgage arm to poke around my current and credit card accounts meaning they never so much as wanted a single statement from those; only had to give them savings statements (different bank). But I doubt it had any other impact.