Mortgage exemption rules

MaloryB

Hi all,

Are there any lenders offering exemptions on how much you can borrow in relation to your household income? Or offering mortgages to those with a deposit of less than 10% of the property's value? Or has all that been stopped?

Thanks

Samuel T. Cogley

From what I can tell from our exemption you get one in favour of the other. In our case big deposit meant they weren't too worried about LTI. Someone with a larger income with a reasonable excuse for not saving the deposit might be able to swing a lower deposit but AFAIK it's mainly LTI exemptions.

Sample size of 1 + some third hand information so take with a grain or so of salt.

MaloryB

Samuel T. Cogley wrote: »

From what I can tell from our exemption you get one in favour of the other. In our case big deposit meant they weren't too worried about LTI. Someone with a larger income with a reasonable excuse for not saving the deposit might be able to swing a lower deposit but AFAIK it's mainly LTI exemptions.

Sample size of 1 + some third hand information so take with a grain or so of salt.

Thanks, that’s interesting. Can I ask when this was? They seem to have cracked down a bit lately from what I can tell.

awec

With the HTB scheme for first time buyers surely nobody is getting away with less than 10% of a deposit?

Cuddlesworth

awec wrote: »

With the HTB scheme for first time buyers surely nobody is getting away with less than 10% of a deposit?

People are, I am aware of one couple with a very high income but near zero savings getting one.

Michael D Not Higgins

MaloryB wrote: »

Thanks, that’s interesting. Can I ask when this was? They seem to have cracked down a bit lately from what I can tell.

From what I remember, the exemptions are counted on a six month basis for reporting to the Central Bank. This means they tend to use up their allocation early in the period from stored up demand. If you're speaking to banks now they've likely used up their allowance from the start of the year. It might be worth asking again when the new reporting period opens in July.

witchgirl26

All lenders have a number of exemptions that they can offer but they may also have to go through their own internal checks before putting in for an exemption based on the Central Bank rules. As someone mentioned you can ask for either an exemption in regards the deposit amount (10% instead of 20% for second time buyers) or an exemption in regards the salary multiple. You can't get both at once however. From what I was told the lowest % for first time buyers that some of the banks are allowing is 8% but then they are strict on the level of salary and the price of the house etc.

Best thing we found was to ask for an exemption straight out. They won't offer one but if you ask they'll often see what they can do for you.

izzyflusky

awec wrote: »

With the HTB scheme for first time buyers surely nobody is getting away with less than 10% of a deposit?

5% out of pocket and 5% from revenue for those entitled.

Samuel T. Cogley

2+ years ago I'm afraid OP.

awec

izzyflusky wrote: »

5% out of pocket and 5% from revenue for those entitled.

Yea but that's 10%.

izzyflusky

awec wrote: »

Yea but that's 10%.

Sorry, I didn't get the post at first. Yes, you are right. I haven't heard of anyone availing of the HTB with lesss than that.

Captain Flaps

We were offered exceptions from 3 lending institutions through our broker, we had the 10% deposit plus more capital that we were looking to use for improvements or top up on the purchase price of whatever property we went for, the exception offered was 4.5x joint salary (vs typical 3.5x). Broker said having the deposit was the key thing there, as well as proven ability to repay stressed payments. I've not seen or heard of anyone getting away with lower than a 10% deposit though!

izzyflusky

I know of a second time buyer getting an exception on the 20% rule (he no longer owned his previous properly either) but that's about it.

mloc123

MaloryB wrote: »

Hi all,

Are there any lenders offering exemptions on how much you can borrow in relation to your household income? Or offering mortgages to those with a deposit of less than 10% of the property's value? Or has all that been stopped?

Thanks

Banks are using their full allocation for all exceptions (I cannot remember what the % of applications they are allowed is). But they are picking who to allocate them to on a bunch of different requirements.

mirrorwall14

We got an exemption on LTI but may not technically have been under central bank. My husband is uninsurable. We were originally told it would have to be based off my salary only since I’m insurable. After a long battle we got approved and drew down and are living in our house. We were approved for less than twice our joint salary but just over 4.5 times my salary as he is by far the bigger salary

bri007

Sorry to bring up an old thread, but does anyone remember when the exemptions started this year, was it from January 2018, like straight after Christmas or later on in the year such as the middle of the year.

Is every bank different and does it have to be in your AIP initially to avail of it.

Thanks

myshirt

bri007 wrote: »

Sorry to bring up an old thread, but does anyone remember when the exemptions started this year, was it from January 2018, like straight after Christmas or later on in the year such as the middle of the year.

Is every bank different and does it have to be in your AIP initially to avail of it.

Thanks

No. You'll need it on a specific house. You won't get generic approved. From what I hear in my network there a load of people queued up ready to pull the trigger in January on the promise of an exemption.

bri007

Thanks for the reply,

Ah ok, yeah that makes sense, we are AIP and finding it difficult to get anywhere within our price range.

So people must be bidding on houses based on the promise of getting an exemption in new year

Bluefoam

myshirt wrote: »

No. You'll need it on a specific house. You won't get generic approved. From what I hear in my network there a load of people queued up ready to pull the trigger in January on the promise of an exemption.

I have recieved my exemption, but the caviate is that I cannot draw down the mortgage until January... I wouldn't wait, you may find that all the exemptions are used by the time you get to it.

Zenify

Bluefoam wrote: »

I have recieved my exemption, but the caviate is that I cannot draw down the mortgage until January... I wouldn't wait, you may find that all the exemptions are used by the time you get to it.

I find this crazy that next years exemptions are handed out already. The entire property market in Ireland is a circus. Estate agents, banks and developers are all just as bad as each other.

witchgirl26

bri007 wrote: »

Sorry to bring up an old thread, but does anyone remember when the exemptions started this year, was it from January 2018, like straight after Christmas or later on in the year such as the middle of the year.

Is every bank different and does it have to be in your AIP initially to avail of it.

Thanks

We got our one mid-year but it depends on the banks own working methods. Some allocate them right at the start of the year and that's it. Others work off quarters and others on a half yearly basis.

Bank of Ireland still were able to give us one in June last year as they work off quarters (well that's what the guy I was dealing with said).

myshirt wrote: »

No. You'll need it on a specific house. You won't get generic approved. From what I hear in my network there a load of people queued up ready to pull the trigger in January on the promise of an exemption.

We had ours in our AIP - i.e. we were approved for an amount with a deposit that reflected the exemption however we weren't guaranteed that until we put against a specific house. We found it better to ask at the AIP stage.

JDD

Go back to whoever gave you the AIP, and see if you can get an exemption included in it. They don't give the exemption unless you ask for it.

No matter what the bank, most exemptions are given out between January and March each year. Now, that doesn't mean you have to wait until January to get a new AIP. The exemption only applies at drawdown, and banks know that even if you bid and win on a property now, you won't draw down the mortgage until January at the earliest. Most banks open their exemption applications in early November, so I'd get in there now.

The bank isn't obliged to give you the exemption until you get your official letter of offer. And you can't get the letter of offer until you have a specific house in mind. So it's a bit of a scramble between a bid being accepted and contracts being signed to get the letter of offer. Try and have all your ducks lined up and ready to go around the time you're down to the last other bidder, or for a new house, before you put down your booking deposit.

JDD

I should say, you CAN get your exemption AIP before you are the winning bidder on a house or have put down a booking deposit. Our BOI mortgage advisor just put down a house in our local area that was within our budget - we had no intentions of actually bidding for it. The Letter of Offer stage is when you have to have your final address submitted to the bank, though at that stage you'll either have had the winning bid or will have put down your booking deposit, so you be practically sure this is the house your going for. BOI had no problem with us changing the address between AIP stage and Letter of Offer stage.

jimmycrackcorm

izzyflusky wrote:

I know of a second time buyer getting an exception on the 20% rule (he no longer owned his previous properly either) but that's about it.

Just for useful info, it's worth knowing that if you are separated by your former partner stayed in the fault home that you are classed a a first time buyer again and are also except from stamp duty on a second hand house purchase.