Questions about mortgage, what income do banks accept?

Akrasia

Hi there

I'm a 30 year old married man with 3 kids. The kids are young so my wife is staying at home to care for them and I am the only wage.

I earn 27k a year before tax, this works out about 1.8k a month after tax. I know that the banks would laugh at me if i asked them for a mortgage based on this alone, but can I also add in the child benefit and family income supplement payments we receive?

The child benefit is 390 a month for the 3 kids and Family income supplement is €140 a week. If I add these to my income, this would give me a take home income of 2796 a month

Would a bank consider these payments as part of the household income?

We are looking at buying a house that is priced at 85,000 and would only require a mortgage of about 65,000. Currently we are renting a house for 500 euros a month and the monthly repayment on a mortgage of 65k would be a lot less than this a month so it makes financial sense for us to move if we can get finance.

Does anyone know if it would be at all possible to arrange a mortgage on this basis?

whippet

They generally won't accept these additions as income when looking at mortgages.

What they will look at is the ability to pay from basic earnings ... and more crucially your savings history, you will need to show regular savings from your own income - and have at least 10% of the purchase price ready for a deposit.

McDook

Would your FIS be reduced if you werent paying rent?

miezekatze

I think a mortgage of 65k would actually be realistic for your income. I don't know if they would accept child benefit etc. as income, but even without that I think you would probably be OK. You have a proven record of paying a higher amount each month on rent and if you have savings of 20k then your LTV won't even be that high.

Wabbit Ears

If going by the old formula from when I bought my house of 2 1/2 times your income for a single income purchase plus the deposit of 10% you should be grand esp if you had 20% or so

phormium

Banks don't go by the old method of a multiple of income any more. They now do it on a net disposable income basis and 3 children with one income would bring down your affordability.

Do you have a credit union account? Many credit unions give the equivalent of small mortgages as secured loans, granted their rates are probably higher and the term shorter but worth considering if banks won't consider you.

Any social welfare type payments such as FIS are not normally taken into account as income and child benefit cannot be used.

Akrasia

Thanks for the replies everyone.

The FIS payment is based on my income and the number of children I have, it doesn't take into account my costs (eg rent) so the amount I receive is fixed on an annual basis and would only go down if my income goes up (or if I lose my job)

The banks are really frustrating. I've been using the online calculators and as soon as I say I have children, they say I can't afford the repayments on a mortgage but they'll give a single person a massive mortgage on the basis of their existing circumstances regardless of the fact that they could be planning to get married and have kids the day after they get mortgage approval.

It's also frustrating if they won't accept childrens allowance or payments from the state

I'm looking for a secured loan on a property that has already come down in price by more than 50% in the last few years and is unlikely to fall by more than a few thousand euros more (if it's not already at the clearance price) The mortgage repayments would be more affordable to me than the current rent that I pay even if there is a significant interest rate increase.

Do the local branches have any discretion when it comes to mortgage approval anymore? Is it possible to make a case on an individual basis or is it all automated and set by head office?

Bigcheeze

Online calculators are useless. Either deal with the branch or talk to a mortgage broker or the credit union option as someone mentioned.

Mrs OBumble

Akrasia wrote: »

The FIS payment is based on my income and the number of children I have ... so the amount I receive is fixed on an annual basis and would only go down if my income goes up (or if I lose my job)

Or if the government changes the eligibility rules - and that reason is why the banks won't count it, it's not income that you have good control over.

Akrasia

Nobody has full control over their income. I'm in a stable job but there's nothing stopping the company from announcing tomorrow that they're closing down their irish operations and making everyone redundant.

Payments like FIS and Child benefit are reasonably stable, the government might tweak them in the budget, but they're unlikely to make huge changes to these as there would be political consequences, but as you said, they're not guaranteed

Anyway, thanks for the replies.

We'll arrange to meet with some insurance brokers and see what our options are, it's nice to go into these meetings with some information about how everything works

phormium

Financial institutions are not allowed accept child benefit as income for the purposes of approving loans, that is not their rule they are simply not allowed, that money is meant to be for children not to repay loans. Now I know you could argue that the house is for the children but nevertheless that is the rule.

Any social welfare payments such as FIS are paid because you have insufficient income to live on, they cannot be used to bump up income from the point of borrowing, that would be irresponsible lending, we have seen enough of that! Even back in tiger days social welfare payments were not generally taken into account other than permanent payments such as invalidity or pension payments.

Ray Palmer

The lunacy that a person on an income supplement wanting it to be used as a mortgage calculation is just amazing. The income the person makes is so low the state see it as unliveable with a family.
Council housing is specifically designed for people in this situation so go on the housing list is really the only option. You don't earn enough to afford a house. The state is helping you due to your children as you can't provide for them on your own. How you expect to afford to cater for these children in the future as they cost more with a mortgage boggles the mind.

If you want to buy a house get a better paid job. Of course when that happens your FIS will be cut but the banks will consider the income. It is a disincentive for some but for the OP it would be a help. Of course your wife could get a job too but then the same effect on FIS.

McDook

Or you could just ask the bank instead of the internet and get a definite answer for yourself and be satisfied.

runawaybishop

Akrasia wrote: »

We are looking at buying a house that is priced at 85,000 and would only require a mortgage of about 65,000. Currently we are renting a house for 500 euros a month and the monthly repayment on a mortgage of 65k would be a lot less than this a month so it makes financial sense for us to move if we can get finance.

Its not just the mortage you have to pay though, you need house insurance and life assurance - dont forget to budget for them.

D3PO

runawaybishop wrote: »

Its not just the mortage you have to pay though, you need house insurance and life assurance - dont forget to budget for them.

and property tax and house maintenance and and and .......

Eldarion

I'm glad I wasn't the only one appalled at the idea of aid due to insufficient liveable income being used to purchase appreciating assets.

ted1

Ray Palmer wrote: »

The lunacy that a person on an income supplement wanting it to be used as a mortgage calculation is just amazing. The income the person makes is so low the state see it as unliveable with a family.
Council housing is specifically designed for people in this situation so go on the housing list is really the only option. You don't earn enough to afford a house. The state is helping you due to your children as you can't provide for them on your own. How you expect to afford to cater for these children in the future as they cost more with a mortgage boggles the mind.

If you want to buy a house get a better paid job. Of course when that happens your FIS will be cut but the banks will consider the income. It is a disincentive for some but for the OP it would be a help. Of course your wife could get a job too but then the same effect on FIS.

outside of Dublin they can't give houses or apartments away. 27k is more than enough for a mortgage of 65k.

The OP is currently paying 500 a month, on 65k it would be closer to 350. he will have security and doesn't face being evicted decides to sell the house or move into it himself. life on a 65k mortgage wouldn't be much, nor would property tax.

your attitude stinks, some people prefer to be able to fend for themselves than relying on the state. if the OP wants to be king of his own castle. more power to him.

runawaybishop

ted1 wrote: »

The OP is currently paying 500 a month, on 65k it would be closer to 350.

Except it wouldn't. You dont just fork out 350 a month for your mortage and call it a day, there are a raft of additional expenses to take into account.

phormium

Credit Union is the only way to go here if you can get it from them, I really believe they will be the future lenders for small mortgages like this where the income is insufficient for the banks to even look at it but affordability is there.

However I still don't believe FIS should make up any part of allowable income.

ted1

runawaybishop wrote: »

Except it wouldn't. You dont just fork out 350 a month for your mortage and call it a day, there are a raft of additional expenses to take into account.

I do own houses i realise that, at the end of the term the OP will no longer have to pay rent or mortgage. There is a buffer zone of 150 a month (say 100 after insurance and assurance)

Chattastrophe!

ted1 wrote: »

your attitude stinks, some people prefer to be able to fend for themselves than relying on the state. if the OP wants to be king of his own castle. more power to him.

Yes, but ... what he's proposing is not fending for himself at all, it's basically accepting that he's going to continue to be reliant on the state until (at least) the mortgage is paid off.

In fact, having a mortgage would surely be a disincentive for him to ever get off the FIS (either by seeking a better paid job, or by his partner getting a job.)

I'm in a position where my partner and I are both working full-time - neither of us on great money, but enough that we certainly wouldn't qualify for the FIS or for any other welfare payments. There is no way we could afford to get a mortgage for another few years, and we're fine with that, we'll continue to rent until we can afford our own place. But how on earth would it be fair that someone reliant on benefits would be able to get mortgage approval, based on these welfare payments as part of their income, if an ordinary hard-working couple can't?

runawaybishop

ted1 wrote: »

I do own houses i realise that, at the end of the term the OP will no longer have to pay rent or mortgage. There is a buffer zone of 150 a month (say 100 after insurance and assurance)

Right, but you didn't mention that (there is also maintenance etc). Anyway, the bank will most likely not grant approval as thee is only one income source and significant expenditure.

ted1

Chattastrophe! wrote: »

There is no way we could afford to get a mortgage for another few years, and we're fine with that, we'll continue to rent until we can afford our own place. But how on earth would it be fair that someone reliant on benefits would be able to get mortgage approval, based on these welfare payments as part of their income, if an ordinary hard-working couple can't?

you need to look at the size of the mortgage. what size mortgage would you hope to get? the OP is only looking for 65k.

the OP may be able to get one based on his income without FIS. That's fair enough. The OP is an ordinary hard working couple. they have kids, between him using his wivies tax credits and the cost of child minding it more than likly doesn't make financial sense for his wife to work, unless she can get a better paid job than him. then they should swap roles.

Ray Palmer

ted1 wrote: »

outside of Dublin they can't give houses or apartments away. 27k is more than enough for a mortgage of 65k.

The OP is currently paying 500 a month, on 65k it would be closer to 350. he will have security and doesn't face being evicted decides to sell the house or move into it himself. life on a 65k mortgage wouldn't be much, nor would property tax.

your attitude stinks, some people prefer to be able to fend for themselves than relying on the state. if the OP wants to be king of his own castle. more power to him.

He is not fending for him self if he is relying on FIS. Which he is only entitled to while the kids live with him and remain in full time education. CB will be cut off before that too. The state income is for the children not the married couple.

It is a pretty horrible attitude to expect the state to fund a house purchase. Incredibly short sighted to expect to get these payment indefinitely or while paying for a house.

Luckily the banks won't lend on this income and rightly so. He can't afford to pay for his kids without state aid but you expect him to buy a house? You do understand why that sounds crazy?

Remember to comment on the post not the poster as my attitude is not open for comment as per the charter.

Ray Palmer

ted1 wrote: »

. The OP is an ordinary hard working couple. .

No they aren't it is not ordinary to get FIS. You are the working poor if you are on FIS. They are poor. If they can afford to buy a house then it suggests their payments are too high and maybe payments should be weighted based on the cost of accommodation in areas.

Akrasia

Eldarion wrote: »

I'm glad I wasn't the only one appalled at the idea of aid due to insufficient liveable income being used to purchase appreciating assets.

Give me a break would ya. That's not what I'm doing at all. We're not trying to scam the state.

We're just trying to figure out how best we can provide security for our family into the future and save money. The house we are renting now is due for a rent review this year and the costs could go up by 50 to 100 euros a month

If we got a mortgage of 65k that would cost about 300 quid a month and home insurance and life insurance is about 55 euros a month so we'd be saving about 150 euros a month over the current cost of renting. The 1800 a year would cover the cost of the property tax and maintenance of the property which was estimated at about 1300 per year for an average home (and presumably less for smaller houses like the one we would like to buy)

http://blog.aaireland.ie/annual-cost-of-owning-and-running-a-home-more-than-e15000-reports-aa/

If the banks were more flexible, we would be able to make a case for a mortgage based on my earned income alone without taking FIS into account at all (based on the old lending criteria before bubble territory and the overly restrictive mortgage lending practises post crash)

Mrs OBumble

ted1 wrote: »

outside of Dublin they can't give houses or apartments away.

Please PM me the contact details of any houses being "given away" in Galway City!


I'm glad that Ray brought up the fact that council housing is the government's preferred approach to assisting low-paid people like the OP. My fingers twitched over a sentence about it earlier in the discussion, but I decided not to post it because some people get really upset with the idea that they are council-house candidates.

OP, get on the list. Don't accept voluntary housing. Live there for 10 or 20 or whatever years, and then do the tenant purchase thing. You may not get the neighbourhood of your dreams, but you don't lose your home if your job goes belly-up, either.

Akrasia

Chattastrophe! wrote: »

Yes, but ... what he's proposing is not fending for himself at all, it's basically accepting that he's going to continue to be reliant on the state until (at least) the mortgage is paid off.

In fact, having a mortgage would surely be a disincentive for him to ever get off the FIS (either by seeking a better paid job, or by his partner getting a job.)

What? I have no intention of being on FIS forever. My wife did have a job but she lost it in the recession. She will go back to work in a few years when it is economically viable to do so (when there are jobs available, and the childcare costs are reduced when they're all in school)

If we were interested in scamming the state, my wife would be claiming Job Seekers allowance even though she's not available for work. This would make us a lot more money and also entitle us to rent allowance. We are not interested in scamming anyone. We just want a modest place to live to raise our family.

I'm in a position where my partner and I are both working full-time - neither of us on great money, but enough that we certainly wouldn't qualify for the FIS or for any other welfare payments. There is no way we could afford to get a mortgage for another few years, and we're fine with that, we'll continue to rent until we can afford our own place. But how on earth would it be fair that someone reliant on benefits would be able to get mortgage approval, based on these welfare payments as part of their income, if an ordinary hard-working couple can't?

There is something wrong with the banking system if an average working couple don't earn enough money to be able to get a mortgage for an average house in Ireland. It seems like the lending criteria has gotten far too restrictive. I am the first to say that the banks should never have been giving out the crazy mortgages they were giving during the bubble and that was the main reason why house prices shot up so much, but that's no reason to overshoot and be far too restrictive afterwards.

ted1

Ray Palmer wrote: »

No they aren't it is not ordinary to get FIS. You are the working poor if you are on FIS. They are poor. If they can afford to buy a house then it suggests their payments are too high and maybe payments should be weighted based on the cost of accommodation in areas.

or that property they wish to buy is very low.

ted1

Ray Palmer wrote: »

It is a pretty horrible attitude to expect the state to fund a house purchase. Incredibly short sighted to expect to get these payment indefinitely or while paying for a house.

I've already said to exclude the state contribution. a mortgage of 300 -350 is doable on 27k without state assistance, and is less than his rent.

Triceratops Ballet

the banks will look for any reason to say no to an application. In inherited a house that needs substantial work. Between two of us we currently pay 1000 a month in rent, I earn 35k a year, have saved €600 pm for as long as I can remember, He lost his job and went back to college working part time earning approx 18-20k a year. We applied for a 65k mortgage to be able to move into the House and were turned down by AIB, BOI, PTSB and Ulster bank!! I was baffled there is genuinely no reason I can see as to why, they all said they would like to see us boost our savings! I had 8k in the bank at the time and himself had 4 and I already own the house!! This was last summer so we'll be going back to them later on this year

Op they will look for any reason to turn you down and while I can see the logic in what you're trying to do, and I sympathise as I know how frustrating it is. I can imagine that the FIS would go against you.

Eldarion

dottie_lottie wrote: »

the banks will look for any reason to say no to an application. In inherited a house that needs substantial work. Between two of us we currently pay 1000 a month in rent, I earn 35k a year, have saved €600 pm for as long as I can remember, He lost his job and went back to college working part time earning approx 18-20k a year. We applied for a 65k mortgage to be able to move into the House and were turned down by AIB, BOI, PTSB and Ulster bank!! I was baffled there is genuinely no reason I can see as to why, they all said they would like to see us boost our savings! I had 8k in the bank at the time and himself had 4 and I already own the house!! This was last summer so we'll be going back to them later on this year

Op they will look for any reason to turn you down and while I can see the logic in what you're trying to do, and I sympathise as I know how frustrating it is. I can imagine that the FIS would go against you.

That doesn't sound right at all. If you're showing proof you've been paying 1K p/m on time and have also been able to save on the combined 53-55k then there's no reason you shouldn't be approved for a loan as small as 65K.

You're leaving out something massive here, 65k is a car loan not a mortgage. You could look into alternate sources of credit with your situation but after being turned down by 4 banks doesn't make sense if you're telling the whole story.

Bepolite

What is the difference between someone using support to pay someone else mortgage (through rent) and them using the money to pay their own mortgage (which is lower) and will result in them having an asset, that in their old age can be used to fund their care, and will be taxed throughout their lives?



OP what are you saving each month if I may ask? My advice is speak to a broker.

Triceratops Ballet

That genuinely is the whole story I was so confused by it I spent hours on the phone arguing with some poor guy in AIB who had just been designated to call me and tell me. He gave me the line about savings and I refuted with the fact that I have saved €600 every month and he goes "oh yeah I can see that, well maybe they want proof you can make the repayments" to which I pointed out the rent we've been paying which is clearly labelled on my statements, and he seemed just as confused by it. All he could do was trot out the savings line to me, as a "well that's what they've said they'd like to see". I even got a copy of my credit score as I was so worried about it, but I've an ok record, I missed 2 payments on my credit card 8 years ago but I had a loan since that of 10k. GENUINELY BAFFLING. Everyone I tell has that same reaction, honest to god... this is the full story!

At the time I was in my job 4 years, I've changed jobs since so have to wait until later in the year to try again. Some people have suggested that it may be the OH's student status that went against us. We used a broker for BOI PTSB and KBC and went direct to AIB cos I've banked with them all my life, the broker though we'd be a cert for it and was as confused as any of us

Ray Palmer

ted1 wrote: »

I've already said to exclude the state contribution. a mortgage of 300 -350 is doable on 27k without state assistance, and is less than his rent.

Just because you say it doesn't make it true. He can't afford his children and the house without state aid hence he get FIS. He can't afford what he currently has. The state are helping and I have no problem with that but expecting that to mean buying a house is doable that is beyond saving them from poverty. New means test would take note of reduce accommodation.

If they have a deposit of 20k they are very close to not being entitled to FIS as it is means tested. In fact if the DSP see you accumulated a deposit on FIS payments they very well investigate if everything was declared during means testing. It sounds like it shouldn't be possible as a necessity should be just helping people get by not save money and buy houses with.

ted1

Ray Palmer wrote: »

Just because you say it doesn't make it true. He can't afford his children and the house without state aid hence he get FIS. He can't afford what he currently has. The state are helping and I have no problem with that but expecting that to mean buying a house is doable that is beyond saving them from poverty. New means test would take note of reduce accommodation.

If they have a deposit of 20k they are very close to not being entitled to FIS as it is means tested. In fact if the DSP see you accumulated a deposit on FIS payments they very well investigate if everything was declared during means testing. It sounds like it shouldn't be possible as a necessity should be just helping people get by not save money and buy houses with.

You appear to have a chip on your shoulder about his deposit. The OP never said he had savings. He may be gifted 20k as a deposit.

your correct he can't afford what he currently has which is 500 a month, but a mortgage of 300-350 is more affordable. In 20-30 years time 0 a month is much better than 500 a month.

arubap

Seems like a lot of misinformation here. What you pay in rent is not important. The bank will deduct 250 euros from your disposable income for every child that you have. In my case I have one child and my wife isn't working. I borrowed 60K to buy a house of 83K. I had 20K in savings and borrowed 10K from a relative. They were nitpicking all the way. The bank estimated I could only repay 300 euros a month comfortably on a wage of 32K and bonuses of another 8k or so (they don't consider bonuses). They could care less what I said I could pay. I'm now paying 800 a month to pay it off as quick as possible so they don't bleed me dry.

Ray Palmer

ted1 wrote: »

You appear to have a chip on your shoulder about his deposit. The OP never said he had savings. He may be gifted 20k as a deposit.

your correct he can't afford what he currently has which is 500 a month, but a mortgage of 300-350 is more affordable. In 20-30 years time 0 a month is much better than 500 a month.

No chip I missed the bit about it being a gift, wait no I didn't because he never said that. Do you really think it is reasonable somebody is means tested and given state assistance based on no/little money yet they managed to have a 20k deposit? FIS is to save families from poverty.

Did you miss that his FIS would go down if his accommodation costs went down? So if his costs go down by 150 his FIS will also go down by 150. He can't support his family on his own wages. He can afford his rent and family thanks to FIS. If he bought the house he would be in a worse situation financially as he would then have to buy and pay for furniture and appliance plus, insurance, property tax, repairs.

ted1

Ray Palmer wrote: »

No chip I missed the bit about it being a gift, wait no I didn't because he never said that. Do you really think it is reasonable somebody is means tested and given state assistance based on no/little money yet they managed to have a 20k deposit? FIS is to save families from poverty.

At no stage did the OP say they have 20k Cash or in the bank, you are jumping to conclussions

phormium

True, OP didn't say they had 20k but they did say they wanted a mortgage of 65k on a purchase price of 85k, balance must be coming from somewhere.

Mrs OBumble

Ray Palmer wrote: »

Did you miss that his FIS would go down if his accommodation costs went down? So if his costs go down by 150 his FIS will also go down by 150.

Except that it won't.

FIS is linked to income, not expenses.


That siad I agree with Ray.

You cannot say that a mortage payment of 350/month is less than rent of 500/month, because the former doesn't include the costs of maintenance, property tax, house insurance or mortage-protection insurnace. Put those tiogether and you could easily be spending another 150/month or more.

I would be more worried that if the OP is living in an area where an adequate house only costs 85k, then if the OP loses his job then he will struggle to find another within reasonable commuting distance.

I genuinely think that the OP would be better off long term in council housing.

MouseTail

Ray Palmer wrote: »

No chip I missed the bit about it being a gift, wait no I didn't because he never said that. Do you really think it is reasonable somebody is means tested and given state assistance based on no/little money yet they managed to have a 20k deposit? FIS is to save families from poverty.

Did you miss that his FIS would go down if his accommodation costs went down? So if his costs go down by 150 his FIS will also go down by 150. He can't support his family on his own wages. He can afford his rent and family thanks to FIS. If he bought the house he would be in a worse situation financially as he would then have to buy and pay for furniture and appliance plus, insurance, property tax, repairs.

you are misinforming the OP and others here. Savings are not counted as means for FIS, and he will not lose euro for euro if his accommodation costs decrease.

Borboletinha

Ray Palmer wrote: »

No they aren't it is not ordinary to get FIS. You are the working poor if you are on FIS. They are poor. If they can afford to buy a house then it suggests their payments are too high and maybe payments should be weighted based on the cost of accommodation in areas.

I agree 100% with all your posts but by god are they harsh!

Ray Palmer

MouseTail wrote: »

you are misinforming the OP and others here. Savings are not counted as means for FIS, and he will not lose euro for euro if his accommodation costs decrease.

News to me and I work on the FIS IT system.

ted1

Mrs OBumble wrote: »

Except that it won't.

FIS is linked to income, not expenses.


That siad I agree with Ray.

You cannot say that a mortage payment of 350/month is less than rent of 500/month, because the former doesn't include the costs of maintenance, property tax, house insurance or mortage-protection insurnace. Put those tiogether and you could easily be spending another 150/month or more.

I would be more worried that if the OP is living in an area where an adequate house only costs 85k, then if the OP loses his job then he will struggle to find another within reasonable commuting distance.

I genuinely think that the OP would be better off long term in council housing.

Plenty of good houses in here for between 55k and 75k. http://touch.daft.ie/search.daft?s%5Bsearch_type%5D=sale&s%5Bcc_id%5D=roi&s%5Bmnp%5D=50000&s%5Bmxp%5D=75000&s%5Bmnb%5D=3&s%5Bnum_sleeps%5D=&s%5Bsort_by%5D=&fr=touch&search=1&adv_form=0&offset=10


Maintenance doesn't cost that much. Especially if you do it your self.

Villa05

Eldarion wrote: »

That doesn't sound right at all. If you're showing proof you've been paying 1K p/m on time and have also been able to save on the combined 53-55k then there's no reason you shouldn't be approved for a loan as small as 65K.

You're leaving out something massive here, 65k is a car loan not a mortgage. You could look into alternate sources of credit with your situation but after being turned down by 4 banks doesn't make sense if you're telling the whole story.

I know there are others here that can confirm, but here it is as I understand it.

For every adult in the household there must be an income of €1,000 per month and €200 per month for every child. Any income above this is your mortgage repayment capacity.

This is unfortunate for the OP as he appears to be very good at managing his finances. To be honest I would give him a loan before some of the people on 60k plus per anum.

When something is scarce you manage it if it is plentiful you blow it.

MouseTail

Ray Palmer wrote: »

News to me and I work on the FIS IT system.

Which bit is news to you, because neither is news to me and i don't work on the FIS IT system.

Akrasia

Ray Palmer wrote: »

No chip I missed the bit about it being a gift, wait no I didn't because he never said that. Do you really think it is reasonable somebody is means tested and given state assistance based on no/little money yet they managed to have a 20k deposit? FIS is to save families from poverty.

Did you miss that his FIS would go down if his accommodation costs went down? So if his costs go down by 150 his FIS will also go down by 150. He can't support his family on his own wages. He can afford his rent and family thanks to FIS. If he bought the house he would be in a worse situation financially as he would then have to buy and pay for furniture and appliance plus, insurance, property tax, repairs.

The FIS does not take into account any expenses like rent or travel or childcare costs, it is based purely on the family income and the number of children in the house, but this is irrelevant now because it's been firmly established that the bank won't accept this as support for a mortgage application

Regarding the deposit. Our savings are low, basically, I pay the household expenses from my wages and the FIS and my wife receives the child benefit into a separate account and this is only touched for emergencies. There is about €1300 in there at the moment but we've only been saving for 6 months and we had to pay for our wedding this year.
I am due a tax refund this year as I will be taking over my wife's PAYE tax credit so this will be added to the savings when the P21 comes in.

We have been offered part of the deposit as a gift from my mother in law who has recently inherited money from a relative, and my wife is also due a small inheritance from her father who died 2 years ago (this has been stuck in probate for some reason)

I know that the chances that we will meet the lending criteria are practically zero based on my own income alone and the lending criteria of the banks.

Akrasia

Mrs OBumble wrote: »

Except that it won't.

FIS is linked to income, not expenses.


That siad I agree with Ray.

You cannot say that a mortage payment of 350/month is less than rent of 500/month, because the former doesn't include the costs of maintenance, property tax, house insurance or mortage-protection insurnace. Put those tiogether and you could easily be spending another 150/month or more.

I would be more worried that if the OP is living in an area where an adequate house only costs 85k, then if the OP loses his job then he will struggle to find another within reasonable commuting distance.

I genuinely think that the OP would be better off long term in council housing.

The area is Ennis and the house is in a decent area very near to the town and close to our family which is one of the main reasons we like it so much.

tony1980

Could you not try for an annuity loan from The County Council, I think it is only a 3% deposit required. That loan would be quite affordable if you manage your money correctly.

Scortho

Op have you considered the effect that a rise in interest rates will have on you're repayment capacity.
Or another child?
Or fis being cut?
Child benefit being reduced etc.

It's funny, a while ago people were giving out about banks giving mortgages to those who shouldn't have got them because they were never going to be able to pay it back in full.
Now those same people are giving out about banks not giving out mortgages, because their rent is more than the initial mortgage repayment.

It's all about your repayment capacity and stress testing it. The bank wants to give out as many mortgages as they can, feck they'd be delighted if every person in this country could have a mortgage in there name, provided that they have the ability under all the different stress tests to pay it back.
If you need a dig out from the state, to feed your children and put a roof over your head, then you clearly won't have the ability to pay that mortgage back when the stress tests are applied.

If you can't get a mortgage, it's not the banks fault. In fact you should be thankful that they didn't give you one, because they've clearly seen that you don't have the long term financial capacity to repay under your current circumstances.