Saving/Applying for a mortgage 2015/16/17/18/19

Naid23

Utah wrote: »

It's good for those who don't have to wait another year or two to accumulate the deposit.

It'll probably drive up house prices even further as there will be an increase in people who can bid on the same amount of houses

Hopefully it wont. but there are bound to be side effects. Its great that we will be better off as we have our full deposit saved but the problem is the supply.

If people cant get mortgages to move then theres not gonna be houses available so really they should be lowering the 20% requirement for second time buyers.

bleary

Naid23 wrote: »

If people cant get mortgages to move then theres not gonna be houses available so really they should be lowering the 20% requirement for second time buyers.

And this is exactly how I remember the last boom /bust starting.

Pressure to make one small change leads to pressure for just one more small change to make things fair leads to 100% mortgages and 40+ year terms , increased wage demand etc..
You will end up owing more money over a longer period, that is not helping.

NEDDURC

The new rules talk about 20% of non FTB being allowed to exceed the LTV ratio?
Does it guide anywhere on how much it can exceed by? Can it go to 95% etc.

Michael D Not Higgins

NEDDURC wrote: »

The new rules talk about 20% of non FTB being allowed to exceed the LTV ratio?
Does it guide anywhere on how much it can exceed by? Can it go to 95% etc.

It is 5% that are now allowed exemptions above 90%. The exemption is based on the bank's criteria. From published data from the CBI, some people have even gotten 100% mortgages in the last year (something like 6 total out of 11,000)

NEDDURC

It's 5% for FTB but 20% for non-FTB.
Where is this data? Can you provide a link?

bleary

NEDDURC wrote: »

It's 5% for FTB but 20% for non-FTB.
Where is this data? Can you provide a link?

I think you are confusing numbers here.

Till today the bank could provide exemptions on the Loan to value
in up to to 15% of cases (15% of the total amount loaned out to all the people who applied for mortgages).

They could also provide an exemption on the Loan to income rules for 15% of mortgage amounts given.

So if the bank lends 100 euro (for simplicity) in a year, 30 euro (15+15) could be lent to people who did not satisfy these criteria.

Todays changes mean the loan to income exemption remains at 15%.

For FTB, banks can now break the deposit exemption (>90% of mortgage lent ) in 5% of loans given (rather than 15%).

For second time buyers, banks can now break the deposit exemption (>80% of mortgage lent ) in 20% of loans given (rather than 15%).

So lending to FTB exemptions are available for 20 euro lent (5+15) out of every 100 lent to the whole market
For Second time buyers exemptions are available for 35 euro lent (20+15) out of every 100

Juwwi

Hi just wondering if anybody has applied for a mortgage while on a fixed term contract and how they got on ?

Also does anybody know if you have more than the required 20% deposit are the banks more lenient in loaning or is it a case of you either qualify or don't ?

Thanks

Unearthly

robbie1977 wrote: »

Hi just wondering if anybody has applied for a mortgage while on a fixed term contract and how they got on ?

Also does anybody know if you have more than the required 20% deposit are the banks more lenient in loaning or is it a case of you either qualify or don't ?

Thanks

Not sure about fixed contract but the higher the % you invest yourself, the better for banks and they may put you in the exemption category for the 3.5 salary rule.

Brioscai

We could only qualify on either deposit or multiple (as second time buyers).

youcancallmeal

Does anyone know what is the max LTI exemption you can get? I've definitely heard people say 4 times salary but thought I also saw 4.5 times mentioned as well?

Michael D Not Higgins

youcancallmeal wrote: »

Does anyone know what is the max LTI exemption you can get? I've definitely heard people say 4 times salary but thought I also saw 4.5 times mentioned as well?

The CBI data showed no banks giving above 4.5 but they aren't limited to that as such. It's just the banks' own policies limiting the exceptions to 4.5.

The One Doctor

Hi all,

First time posting in A&P. I've finally got a job with a reasonable salary and I'll be permanent in 6 months time. So it's time to start saving and getting our accounts in order.

We live with my in-laws and pay no rent. My partner is looking for a FT perm job now (currently FT contract). We can save around €2k a month. Deposit will be paid by inlaws desperate to go us out of their house.

My salary: €37k
Partner's salary: €25k (probably the same in a perm job)

My partner has a credit card and an overdraft, both frequently used but I'm going to ask her to stop using them both. I've recently done a credit check on myself and it shows nothing. (had a long history of credit trouble but that stopped 10 years ago).

Apologies for rambling. My question is what's the best way of preparing in advance to apply for a mortgage?

Michael D Not Higgins

I wouldn't worry about using a credit card, as long as the balance is paid and the purchases aren't excessive. I got a credit card last year to bolster my credit rating in the UK. The overdraft may be a different story depending on how it's looked upon by the underwriters. If it's a sign of regular use because of excessive spending, it could be indicative of poor financial management in which case I'd suggest not using it.

You say you can save 2k a month but not that you are saving that. If you haven't already, start saving now. Regular monthly savings that aren't touched are a big positive for a mortgage application.

seamus

Using a credit card is fine, provided that you use it for one-off purchases and you keep the balance consistently low (< €500) or you pay it off in full every month.
That is, use it for online shopping. Don't use it for getting petrol or groceries, or in the off licence. And definitely not for gambling.

If you're able to save, you shouldn't really end up in the overdraft.

In terms of the deposit, for the purposes of getting a mortgage, the bank are going to require proof that the deposit is money which belongs or is available to you without any requirement to repay it. So your options are

- a sworn declaration from your in-laws that the money is a non-repayable gift. Your in-laws may also be required to show proof that they didn't borrow this sum.

- or, open a joint savings account and put the deposit in it now. When it comes time to apply for the mortgage, the bank will only look for six months' statements, so that sum is just "money that's been resting in my account" and you won't have to explain it beyond the fact that it's yours. If the bank spot a huge lodgement in a savings account, they will ask where it came from. But if it's balance carried forward, you have no explaining to do.

seamus

seamus wrote: »

- or, open a joint savings account and put the deposit in it now. When it comes time to apply for the mortgage, the bank will only look for six months' statements, so that sum is just "money that's been resting in my account" and you won't have to explain it beyond the fact that it's yours. If the bank spot a huge lodgement in a savings account, they will ask where it came from. But if it's balance carried forward, you have no explaining to do.

I wouldn't be too confident about that, I've seen banks ask for proof of the historic build up of savings when there is a decent amount of savings involved.

Might be as easy just to get a letter stating it's a gift from the start.

Ayuntamiento

Sounds like you're on the right track. Your combined income level is going to severely limit the amount you can borrow. 3.5 multiplied by 62k will allow you to purchase a property that costs 217k max. That won't get you a lot in Dublin but maybe you're not purchasing in Dublin?
Both of you being permanent will make it a whole lot easier. Back when I was on probation they literally wouldn't include my salary in the application AND they counted me as financially dependent on my husband which lowered our monthly repayment capacity. It wasn't even worth our while applying until I got off probation.

cerastes

How long is expected in full time employment? And is that the limit? 3.5 times the combined wages? Have a place to sell but rules have changed since I bought, considering a move outside dublin

Ayuntamiento

3.5 times your income is the rule unless you can get an exemption. You'll need a 20% deposit as a second time buyer. The length of time in my job didn't seem to matter. I just had to be permanent and off probation.

dekbhoy

Credit cards are ok as long as paid back and not let go into too much debt. If yiou have an online bookies account get rid of it immediately. RED flag for underwriters

syndrome777

does anyone have any real life experience with getting mortgage approved with one partner on a permanent job and the other in the same job for 2 year but on a contract?
Do banks take both salaries as 100% or reduce the one on contract or don't count it at all? any experience and with which lender?

Paddytheman

Ayuntamiento wrote: »

Sounds like you're on the right track. Your combined income level is going to severely limit the amount you can borrow. 3.5 multiplied by 62k will allow you to purchase a property that costs 217k max. That won't get you a lot in Dublin but maybe you're not purchasing in Dublin?
Both of you being permanent will make it a whole lot easier. Back when I was on probation they literally wouldn't include my salary in the application AND they counted me as financially dependent on my husband which lowered our monthly repayment capacity. It wasn't even worth our while applying until I got off probation.[/QUOTE

Depends on how much of a deposit the folks give them but let's say they take a minimum 6 months "to get their affairs in order" and saved the €2000 per month that they can afford, that means €12,000 plus an exemption to give 4 times their €62,000 totals €260,000 adding to this their deposit from the folks and BOOM were at €280,000 after solicitors fees etc. God only knows what will happen but just wanted to give a more positive outlook to the scenario.....

Head down, clear overdrafts/cards and if it's something you really want then save like it is. Probably speak to a good mortgage broker too. They will help no end. Best of luck

Ayuntamiento

Is it not 3.5 times your income equates to the purchase price rather than the amount that they'll lend you? We didn't need to borrow anywhere near the max we'd be allowed so I've never quite figured this one out.

Atlantic Dawn

A said get rid of any credit cards used for online gambling in the last 2 years, just cancel them, you then won't have to declare them.

cerastes

Ayuntamiento wrote: »

3.5 times your income is the rule unless you can get an exemption. You'll need a 20% deposit as a second time buyer. The length of time in my job didn't seem to matter. I just had to be permanent and off probation.

An exemption? What does that allow up to times the total salary? And how are they gotten?

Ayuntamiento wrote: »

Is it not 3.5 times your income equates to the purchase price rather than the amount that they'll lend you? We didn't need to borrow anywhere near the max we'd be allowed so I've never quite figured this one out.

Not sure what the first line means? Have to clear some cards mainly and a small loan we have and try save too but mostly all to look better, as think won't need to ask for what 3.5 our incomes would equate to as considering moving from Dublin to outside Dublin.

REFLINE1

Atlantic Dawn wrote: »

A said get rid of any credit cards used for online gambling in the last 2 years, just cancel them, you then won't have to declare them.

why 2 years? 6 months fine unless its ur own bank obv

Michael D Not Higgins

There are two metrics that are controlled by the Central Back rules.

LTI, loan to income, is limited to 3.5 and means you can't borrow more than 3.5 times your combined income (without an exemption).

LTV, loan to value, is limited to 90% for first time buyers and 80% for second and subsequent buyers (and 70% for but to let). This means you must have a deposit for at least 10% of the value of the property of you're an FTB.

Innervision

Ayuntamiento wrote: »

Is it not 3.5 times your income equates to the purchase price rather than the amount that they'll lend you? We didn't need to borrow anywhere near the max we'd be allowed so I've never quite figured this one out.

No, 3.5 times your income is what they'll lend you. Your deposit is then added to that to determine your max purchase price.

Unearthly

cerastes wrote: »

An exemption? What does that allow up to times the total salary? And how are they gotten?

Generally just a small bit up like 4 times or 4.1 etc.

It all depends on the loan to value. It lowers the risk for the bank if their loan is a smaller percentage to overall value. The idea is that even if you were to default and the market prices dropped, they'd still have a good chance in getting their money back

syndrome777

syndrome777 wrote: »

does anyone have any real life experience with getting mortgage approved with one partner on a permanent job and the other in the same job for 2 year but on a contract?
Do banks take both salaries as 100% or reduce the one on contract or don't count it at all? any experience and with which lender?

I got approval for the full 3.5 times my salary as a single applicant on a contract so they should consider her full salary. But it varies, im a good few years in the same place and it's known that it's an a job notoriously hard to get permeant in.

StupidLikeAFox

Atlantic Dawn wrote: »

A said get rid of any credit cards used for online gambling in the last 2 years, just cancel them, you then won't have to declare them.

If the banks look through your current account statements and see any DDs to credit card companies it is likely to raise a flag - they will want to see statements to show they are cancelled at least