Mortgage deposit

WexfordRonald

Hello,

I am trying to get a mortgage but no luck. I have a steady job of around 38k a year and I have been gifted a deposit of 100k. However my wife isnt working so the only mortgage I have been offered is for 90k. I cant buy a house for 190K in this area. Is there any way to get around the 3.5 rule on my salary? I have no other loans and have been paying 900 a month in rent for the past 3 years. My bank account with BOI has been stable all my life with no overdraft. Ideally I would like to buy around the 300k mark


Thanks

myshirt

The underwriters will not go for it. If you have been through an assessment process and they have assessed that they can only give 90k, then that's all they are willing to lend.

Try other banks and go to a whole of market broker or other professional, albeit this will limit your ability to deal with BOI.

bluetractor

The 3.5 times salary is a central bank directive and is there to protect people from over extending themselves and is a maximum multiple. A couple with just one in employment earning 38k a year simply will not get near that multiple as there are many other expenses to consider.

You could go via a broker who may get you circa 120k especially with that deposit.

But I will give you some good news. You should qualify for the rebuilding ireland homeloans offered by councils. There has been very little take up of these but with your 100k deposit, you easily get through the criteria for approx 200k - and even better, a fixed rate of 2% for 25 years.

http://www.citizensinformation.ie/en/housing/owning_a_home/help_with_buying_a_home/local_authority_mortgages.html ;

BTW - banking history with a specific bank makes absolutely no difference to their decision unless its a borderline decision. 

WexfordRonald

Thanks for your input, The rebuilding home loans only allows you wto buy property up to 250k in my area which isnt going to get your much to be honest (Gorey) and there is a limit on sq metres etc. I find it strange that they can see I have been paying rent consistently for the past 3 years and any mortgage repayment would be less than my rent but they still limit their offer. At present I could repay a 90k mortgage in 10 years without much trouble. I will contact some brokers and see if they give any better options

BelovedAunt

You could take the mortgage in your name alone, this should increase it and you could always add your wife to it later.

bluetractor

plenty of good properties in gorey under 250k and 175sqm is almost 1900 sq ft and almost twice the size of a standard 3 bed semi. Seems you are expecting too much. https://www.daft.ie/wexford/property-for-sale/gorey/?s%5Bmnp%5D=200000&s%5Bmxp%5D=275000&s%5Bmxb%5D=4&offset=20 ;
The 3.5 limit is stuck in stone except for a limited number of loans where the bank can show that substantial salary growth is assured. (think professions such as doctors etc) At 38k, you won't get past 3 times with any bank. If you have kids, it would be lower still. So its the rebuilding ireland route or none (you qualify for 173k loan). The other alternative is for your wife to take up permanent employment, but it will be 12 months+ before her salary is considered.
 
btw, property prices are softening, so a 275k property could sell for 250k and there are other ways around it if the price is 260k - you simply buy the contents for 10k. Your 100k deposit gives you a lot of options and at 2% fixed rate, I'd jump at the rebuild ireland option

WexfordRonald

Thanks for the advice, I think you are probably right that it is my best option. Either that or wait and hope the govt releases new incentives next year/ house prices fall/ my wife goes back to work.

bluetractor

WexfordRonald wrote: »

Thanks for the advice, I think you are probably right that it is my best option. Either that or wait and hope the govt releases new incentives next year/ house prices fall/ my wife goes back to work.

There will be no new gov incentives. Current system is working well. If they told the central bank to increase the multiples, you'd simply see house prices increase. If I qualified for  2% 25 year fixed rate, I'd jump through hoops to get it

Boards.ie: Niamh

Moved to Banking forum from Bank of Ireland forum as this does not appear to be a specific Bank of Ireland query for the reps.

Jim2007

WexfordRonald wrote: »

Thanks for the advice, I think you are probably right that it is my best option. Either that or wait and hope the govt releases new incentives next year/ house prices fall/ my wife goes back to work.

The reality is that your number will not support anything beyond what you are being offered and those limits are there to stop people doing precisely what you are trying to do - completely over extend yourself financially.

You can't be unaware of what happened to people during the last recession... would you really want to be in that situation the next time around??? loose your home, have to turn every cent twice before you spend it...

WexfordRonald

Hi Jim,

Thank you for your reply, I am aware of the previous economic recession in our country however I am not really looking to over extend myself. I am looking for a house around the 300k mark. With a 100k deposit, I could pay back a 200k mortgage based on what I currently pay in rent per month after 20 years. Of course If i lose my job there would be difficulty in paying back the mortgage but the same can be said for any mortgage. The limit appears to be more in ensuring the banks dont suffer too big a loss. Also I am at the beginning of my career, There are just as many variables which would suggest as a family we will earn more money in the future than lose.

Anyway, I think the my query has now been answered so thank you for your input.

P.S I like your ending quote which seems quite applicable

thomas anderson.

BelovedAunt wrote: »

You could take the mortgage in your name alone, this should increase it and you could always add your wife to it later.

Thought mortgage applications were jointly assessed once you were married.....