Mortgage exception

MarkSwords

Hi All,

My partner and I are looking to buy a house. We have managed to save 20k and we were hoping to buy a house next year. However, a lovely property has come up in one of our preferred areas for 275k. We are first time buyers so we don't have the required deposit (based on the new Central Bank rules). However, I would like to know how easy is to get an exception from the bank. Between both of us, we are making 110k a year, we have no loans and we have permanent contracts (over 4 years working for the same company).

What are the chances that a bank will grant us an exception and approve a mortgage with 20k deposit only (on a 275k house)?

Any advice will be welcome!

Thanks

GreatDefector

Honestly a broker can give you better advice but what I read there are exceptions but last year (which was a part year of the rules being implemented) banks filled their allocation for the year in no time

If you have any hope of an exception it's likely to be January

If you are earning 110k and the deposit so far was saved and not gifted, you'd stand a good chance (opinion)

However as you might have read the B&A survey lately it's taking years for couples to save. Either that people are looking elsewhere in budget

MarkSwords

Thanks for the quick reply, GreatDefector.

The deposit was saved (unfortunately I don't know anybody that can give me such a nice gift :-)

fits

Well if ye cant get one with those salaries, tis ridiculous.

tomfoolery60

I could be wrong but I think you need 10% as a minimum even with an exception

ash xxx

Hey,

We were in the exact same situation, hadn't planned to buy until later in the year when we had more of a deposit but then our dream house came along and we had to go for it.

We applied for the approval in principle with 3 banks and we were offered an exemption from 2. (AIB said they require you to be making nearly €4k net and that's after you have deducted the mortgage and any loan amounts from your combined incomes after tax).

On a house of €275k, technically you would need a 33k deposit. We were told by the bank we eventually ended up choosing that the highest deposit exemption they can give out is just under 90%, so something like 89.4%. Could be different for other banks but the one we chose was the one who offered the highest exemption on the deposit.

MarkSwords

Thanks Ash XXX,

We are making over 6k net a month between both of us, and we have no loans. I think we could borrow some money from family, so I think we will give it a try.

Thank you all for your responses!!

ash xxx

Hey Mark,

No problem, it's what we had to do too, so hopefully you can get a loan/gift from family to make up the balance. €27,500 seems a lot more achievable than €33k. But just make sure to take into account your legal fees and stamp duty which will be another €5k approx on top of your deposit.

Good Luck with it

Trish56

Under the Central Bank Regulations you can borrow 90% on 1st 220k and 80% on balance of 55k = 242k. You can apply for an exception on loan to value for 90% of the purchase price = €247,500. Stamp Duty will be €2750 and legal fees and valuation will be approx. €2500 so you will need a deposit of €38,250. You will need to show a gift for approx. 20k.

Lenders are allowed up to 15% exceptions of the total mortgage lending in the Calendar year. This time last year most lenders had this used up however this year they are managing it more prudently and on a monthly basis so you should not have a problem.

I would recommend AIB or Haven if going through a Broker as they offer the best rates at 3.50% variable and person giving gift just needs to sign a gift form.

Best of luck.