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Questions about mortgage, what income do banks accept?

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    #32
    Eldarion
    Registered Users Posts: 484 ✭✭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.


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    #33
    Bepolite
    Closed Accounts Posts: 2,737 ✭✭✭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?

    :confused:

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


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    #34
    Triceratops Ballet
    Registered Users Posts: 4,894 ✭✭✭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


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    #35
    Ray Palmer
    Registered Users Posts: 8,355 ✭✭✭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.


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    #36
    ted1
    Registered Users Posts: 23,270 ✭✭✭✭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.


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    #37
    arubap
    Registered Users Posts: 24 ✭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.


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    #38
    Ray Palmer
    Registered Users Posts: 8,355 ✭✭✭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.


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    #39
    ted1
    Registered Users Posts: 23,270 ✭✭✭✭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


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    #40
    phormium
    Registered Users Posts: 3,293 ✭✭✭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.


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    #41
    Mrs OBumble
    Registered Users Posts: 25,688 ✭✭✭✭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.


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    #42
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭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.


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    #43
    Borboletinha
    Registered Users Posts: 180 ✭✭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!


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    #44
    Ray Palmer
    Registered Users Posts: 8,355 ✭✭✭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.


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    #45
    ted1
    Registered Users Posts: 23,270 ✭✭✭✭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.


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    #46
    Villa05
    Registered Users Posts: 4,506 ✭✭✭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.


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    #47
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭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.


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    #48
    Akrasia
    Registered Users Posts: 22,236 ✭✭✭✭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.


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    #49
    Akrasia
    Registered Users Posts: 22,236 ✭✭✭✭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.


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    #50
    tony1980
    Registered Users Posts: 1,607 ✭✭✭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.


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    #51
    Scortho
    Closed Accounts Posts: 3,876 ✭✭✭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.


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    #52
    McDook
    Registered Users Posts: 113 ✭✭McDook


    Akrasia wrote: »
    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.

    You dont have to explain yourself to anyone on the internet you know.
    Why dont you just go to the bank and ask. Easiest way to the correct answer for you. And you'll be satisfied its correct.


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    #53
    Villa05
    Registered Users Posts: 4,506 ✭✭✭Villa05


    Scortho wrote: »
    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. .

    Fully take your point, however it would be interesting to see stats on income relative to the level of arrears.

    I would imagine that the crisis in Ireland was caused by lending alot to people with high incomes/wealth rather than small loans to people with low income.
    There are issues with both. I would give more credence to a persons ability to manage money than there income in determining a loan application. There are so many people out there that have no clue how to budget or manage personal finance.


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    #54
    Mrs OBumble
    Registered Users Posts: 25,688 ✭✭✭✭Mrs OBumble


    Akrasia wrote: »
    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.

    Yah .. and I just lifted my head and looked around my office - an hour's drive away - and counted the number of colleagues I have travelling here from Ennis, Limerick etc. And I work in a professional job. If these lads had trouble getting work closer to home, then you would too.


    fyi, that everyone should always have 12 weeks of living money in the bank, at call. This would not go towards a house, it's just your rainy day fund. Eg if you got sick and could not work, you would be eligible for welfare, but it might well take several months to get getting paid. You need a fall back fund. You're a long way from even that level, far less having saved a deposit.


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    #55
    [Deleted User]
    Posts: 5,121 ✭✭✭ [Deleted User]


    Would your mother in law be able to buy the property as an investment and then rent it to you?

    You continue to pay rent, she pays the mortgage and you inherit the house at some point - you would have to speak to a solicitor to work out tax implications and the like to see if it would work.

    It might not be an ideal situation if anything went wrong however or if it ended costing more (when you consider the various taxes on the rental income and on inheritance)


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