Trading up - Banks

Someday

I spoke to a Broker who deals with all the banks except Ulster Bank, he couldn't get us to where we needed to be with a Loan amount.

I spoke to Ulster bank today and they give me the green light subject to under Writer approval but only giving 85% to people trading up.
Their Criteria seems to be less strict that others?

What has your experience being if trading up on which bank was the best regarding offering you the loan you required?

whippet

I used the same bank that I had the existing mortgage with.

I would be a little worried that other backs have felt that you don't have the capacity to repay and only one has given an indication that you might be successful.

BTW .. there is a big difference between the clerk in the bank saying the mortgage will be approved and the underwriters giving it the green light!!

Are you selling your existing property? is there negative equity there?

Someday

I used the same bank that I had the existing mortgage with.
They will move me off my tracker!

I would be a little worried that other backs have felt that you don't have the capacity to repay and only one has given an indication that you might be successful.
Its a joke, we are have earned a lot over the last 5 years and only looking about 2.5 times that total amount!

BTW .. there is a big difference between the clerk in the bank saying the mortgage will be approved and the underwriters giving it the green light!!
She is not a clerk but a QFA but I hear what you are saying!

Are you selling your existing property? is there negative equity there?
No and Yes but a property in a nice area of Dublin, my hand would be bitten off for it at the moment rental wise!

This is main reason we are still in a recession, we need to get back to normal lending times!
Many of the banks don't have the cash I think?

whippet

They will move me off my tracker!

Are you keeping the existing property? If so you will loose the tracker anyway when it becomes a Buy-to-let property. You won't get a tracker on a new property now.

Its a joke, we are have earned a lot over the last 5 years and only looking about 2.5 times that total amount!

Are you saying that you are looking for borrowings of 12.5 times (2.5 x5 years) of your annual earnings? That was mad even for bubble times lending.

If i'm reading that wrong and you are looking at 2.5 times you current annual income there shouldn't be any problem with any of the lenders unless you can't show decent regular savings and don't have credit card debt, credit union debt etc ..


Are you selling your existing property? is there negative equity there?
No and Yes but a property in a nice area of Dublin, my hand would be bitten off for it at the moment rental wise!

Will the rental income cover your mortgage repayments (you will loose the tracker as soon as you turn it to a buy-to-let) and all associated expenses? If not; banks will factor this in to your ability to repay the new mortgage

This is main reason we are still in a recession, we need to get back to normal lending times!
Many of the banks don't have the cash I think?[B/]

One of the main reasons why we are in the mess we are in is that banks actually didn't lend prudently during the bubble; if you want to look at 'normal' lending; go a little further back in the past to when your parents were looking for mortgages and what they had to sacrifice to save for deposits and satisfy bank managers.

Someday

whippet wrote: »

They will move me off my tracker!

Are you keeping the existing property? If so you will loose the tracker anyway when it becomes a Buy-to-let property. You won't get a tracker on a new property now.

Its a joke, we are have earned a lot over the last 5 years and only looking about 2.5 times that total amount!

Are you saying that you are looking for borrowings of 12.5 times (2.5 x5 years) of your annual earnings? That was mad even for bubble times lending.

If i'm reading that wrong and you are looking at 2.5 times you current annual income there shouldn't be any problem with any of the lenders unless you can't show decent regular savings and don't have credit card debt, credit union debt etc ..


Are you selling your existing property? is there negative equity there?
No and Yes but a property in a nice area of Dublin, my hand would be bitten off for it at the moment rental wise!

Will the rental income cover your mortgage repayments (you will loose the tracker as soon as you turn it to a buy-to-let) and all associated expenses? If not; banks will factor this in to your ability to repay the new mortgage

This is main reason we are still in a recession, we need to get back to normal lending times!
Many of the banks don't have the cash I think?[B/]

One of the main reasons why we are in the mess we are in is that banks actually didn't lend prudently during the bubble; if you want to look at 'normal' lending; go a little further back in the past to when your parents were looking for mortgages and what they had to sacrifice to save for deposits and satisfy bank managers.

My parents didn't have a mortgage, normal people who saved to buy a house 50 years ago! Try that today!!!

After That it wasn't normal, that is why we had no growth either! Don't go back to stupid lending but 2.5 times last years income is not stupid!

whippet

Someday wrote: »

My parents didn't have a mortgage, normal people who saved to buy a house 50 years ago! Try that today!!!

After That it wasn't normal, that is why we had no growth either! Don't go back to stupid lending but 2.5 times last years income is not stupid!

I just wasn't sure by the way you worded it ... 2.5 time salary isn't unreasonable.

How much of a deposit have you saved?
How long are you in the same employment?
What are your other debts?
What is your credit rating like?

Without knowing these factors nobody can make an assumption as to how reasonable the banks are being to you.

roro2

Someday wrote: »

My parents didn't have a mortgage, normal people who saved to buy a house 50 years ago! Try that today!!!

After That it wasn't normal, that is why we had no growth either! Don't go back to stupid lending but 2.5 times last years income is not stupid!

2.5 times income for just the new mortgage? So you're actually looking for something much higher when you include the existing mortgage. And this wouldn't be considered a standard trade-up mortgage where the original property is sold.

The banks aren't simply going to ignore your existing mortgage even if the projected rent is sufficient to meet the current repayments. You might be better off selling the current property and looking to carry the negative equity to a new mortgage with your current lender, and put up with moving to a SVR from a Tracker.

Someday

Crazy advice on this board ! Anyway back to my question

What has your experience being if trading up on which bank was the best regarding offering you the loan you required?

whippet

Someday wrote: »

Crazy advice on this board ! Anyway back to my question

What has your experience being if trading up on which bank was the best regarding offering you the loan you required?

If you want to know, I used Ulster Bank last year to purchase my house, I already had a mortgage with them for my original house.

My house was in NE and we were letting it out, using savings for a 20% deposit on new house.

The experience:

- The fact that we actually rented our original house out and rented in the area we wanted to buy for 6 months prior to looking for the mortgage showed the bank two important pieces of evidence - i) that the house had rental value and exactly what the monthly rental value was; ii) that we could continue to save while renting and being a land lord

- We were advised at an early stage to get rid of and outstanding loan, credit card debt. So we cleared our small car loan from savings and ensured that the credit cards never had more than a couple of hundred quid on them.

- Sat down with the the QFA / Clerk with 9 months worth of bank statements and went through it line by line. She highlighted anything that might look strange including a transaction on the laser card for Chapter One - when I explained it was an anniversary dinner she marked it as such.

- We had to produce evidence of savings, regular savings - a gift from a relative isn't considered saving and could be counter productive and will not be taken into consideration when working out your ability to repay the mortgage.

- The paper work was sent to the underwriters and with a little back and forth it took about a month to get a final decision.

- Ulster Bank I found were quite painful to deal with; constantly chasing them and only getting through to a call handling facility in belfast rather than the branch .. towards the end we had to walk in to the branch and wait for the person we were dealing with us to come down .. on one occasion it took an hour.

I note from you original post that you are not happy with how much a broker is able to get you approved for; you should ask yourself why? Are you over stretching yourselves?

Someday

Thanks whippet, I hear what you are saying about affordability but..........

So the 5 days is BS, i heard that alright!

Ulster can gives us the cash but at 85%. We may not need that much anyway

(I believe)
Other banks don't take in commission, even 25% of my track record (3 Years)
Other banks wouldn't take in the rent I will receive from my apartment, again not even 25%. (Rental market is booming)

They should take some of it in to account, KBC said "they would look at it"

I have no debt and no bad debt and a very good track record.

whippet

Someday wrote: »

Thanks whippet, I hear what you are saying about affordability but..........

So the 5 days is BS, i heard that alright!

Ulster can gives us the cash but at 85%. We may not need that much anyway

(I believe)
Other banks don't take in commission, even 25% of my track record (3 Years)
Other banks wouldn't take in the rent I will receive from my apartment, again not even 25%. (Rental market is booming)

They should take some of it in to account, KBC said "they would look at it"

I have no debt and no bad debt and a very good track record.

sorry; I did mean to also say that commission, bonuses etc are not considered when looking at ability to pay .. this was a stumbling block with ourselves as I am in a sales related field and have a significant bonus each year, my wife works for a multinational and has annual bonuses usually to the tune of about 20-25% of salary along with a hefty car allowance (even though she works from home).

What we got in to the habit of doing was using the bonuses for savings and essentially the bonuses paid for the deposit and the remaining salary was what pays the mortgage.

apart from earnings; savings are crucial to how the banks view your application .. have you a decent track record of savings?

Someday

Yes we do.

Ulster was taking some of this in to account!

We are not that far away with the other banks, we will get there in the end.

This BS of houses going up, yes in 5 or 6 areas like Malahide, Dublin 4 but not in the rest of Dublin or Ireland!

Someday

Who else out there traded up this year and which bank did you use? How long to get full approval?