Getting a mortgage with 2 dependants

Gee_G

Ok so this might sound like a ridiculous question but are there any banks/buildinf society's etc that are favourable to giving mortgages to a couple with two dependants?
If we put into a mortgage calculator that we have no children we are approved in principle for €50k more than when we put in our two dependants. €50k!! (We don't have childcare costs!)
I was advised to look into the Rebuilding Ireland Home loan but the square footage of our house is too big.

The_Honeybadger

Went through this myself it had a dramatic effect on what we could borrow we had very high childcare costs as well and only barely got the house we wanted in the end. My wife was self employed to boot which further reduced it.

The policy is too restrictive imo and a bit of common sense should be used when the applicant can clearly and comfortably afford the repayments.

I don’t know of any bank that is more favourable to couples with kids to answer your question. Best of luck

ted1

I’ve three kids and because my wife is a stay at home wife the bank reckon I’ve 4 dependants.

My mortgages is less about 2.5 tines my salary but I can’t get move mortgage yet alone house as they wont give me the one I have.

My LTV is about 30%

kirving

The_Honeybadger wrote: »

clearly and comfortably afford the repayments.

Yeah, you might be fine for a while. Until the grandparent who minds the kids can't do it any longer due to inevitable health issues, or the kids go to college in another city.

That restrictions are in place for very good reason.

The_Honeybadger

Kevin Irving wrote: »

Yeah, you might be fine for a while. Until the grandparent who minds the kids can't do it any longer due to inevitable health issues, or the kids go to college in another city.

That restrictions are in place for very good reason.

I understand the reasons for the restrictions but how many childless couples get a mortgage and go off and have 2-3-4 kids? I know lots of people like that.

In my case I had no grandparent looking after kids and was at the peak of what childcare was going to ever be, indeed it has reduced massively now they are all in school. I also had a low LTV and was saving twice the proposed monthly mortgage while paying rent. The advisor in the local branch agreed the amount we qualified for was ridiculous in the circumstances but her hands were tied by this formula they had to adhere to. It worked out ok in my case in the end.

xalot

Yeah it has a massive impact, we could only get a mortgage of 3 times with one provider, the rest would only give us 2.5 times. Luckily we had over 20% of a deposit.

theteal

Any local brokers able to help?

We just had the one child when we were buying but looking back, our broker worked wonders in getting us what we needed, there was a lot of negotiating with the bank. This was UK though so I don't know how that works back home.

maxsmum

How does the bank know how many dependants you have?
Hypothetically. If you've no creche fees coming out of your account every month for example.
You could say two now, and your partner could be 8 months pregnant with triplets and the bank doesn't know.
You could say you've none and I'm not sure they'd know (although this would be lying).
Obviously you'd have to be very careful of your repayment capacity.

ted1

maxsmum wrote: »

How does the bank know how many dependants you have?
Hypothetically. If you've no creche fees coming out of your account every month for example.
You could say two now, and your partner could be 8 months pregnant with triplets and the bank doesn't know.
You could say you've none and I'm not sure they'd know (although this would be lying).
Obviously you'd have to be very careful of your repayment capacity.

They’ll can see the child benefits hitting the bank.

Although to be honest I think they just take your word

awec

maxsmum wrote: »

How does the bank know how many dependants you have?
Hypothetically. If you've no creche fees coming out of your account every month for example.
You could say two now, and your partner could be 8 months pregnant with triplets and the bank doesn't know.
You could say you've none and I'm not sure they'd know (although this would be lying).
Obviously you'd have to be very careful of your repayment capacity.

It would be fraud.

lawred2

ted1 wrote: »

I’ve three kids and because my wife is a stay at home wife the bank reckon I’ve 4 dependants.

My mortgages is less about 2.5 tines my salary but I can’t get move mortgage yet alone house as they wont give me the one I have.

My LTV is about 30%

but you do have 4 dependents

there's no 'reckons' about it

alwald

Gee_G wrote:

I was advised to look into the Rebuilding Ireland Home loan.

I am curious to know too so I entered some random figures in their calculator with and without dependants and compared them to other banks and it appears that they offer less than banks.

Is their calculator accurate?

ted1

lawred2 wrote: »

but you do have 4 dependents

there's no 'reckons' about it

I’ve way more than 4, there’s s dozen or so baristas around south Dublin that are dependant on my wife making her daily appearance!!

lawred2

ted1 wrote: »

I’ve way more than 4, there’s s dozen or so baristas around south Dublin that are dependant on my wife making her daily appearance!!

maxsmum

ted1 wrote: »

They’ll can see the child benefits hitting the bank.

Although to be honest I think they just take your word

Our creche fees and child benefit don't Appear anywhere on our bank account. It just occurred to me I doubt the bank would know. Although it would be dishonest not to declare a child I agree. Not sure it would be fraud? As in a criminal offence?

ELM327

Probably fraud but probably unlikely to be detected.
Of course any fraud is not to be advocated on this board.

lawred2

maxsmum wrote: »

Our creche fees and child benefit don't Appear anywhere on our bank account. It just occurred to me I doubt the bank would know. Although it would be dishonest not to declare a child I agree. Not sure it would be fraud? As in a criminal offence?

to be correct - they don't appear on the bank statements you're presenting to the bank..

but surely there must be payments out to that account from the account statements you're presenting?

And if there are - they will be questioned and you'll have to furnish statements for that account as well.

maxsmum

lawred2 wrote: »

to be correct - they don't appear on the bank statements you're presenting to the bank..

but surely there must be payments out to that account from the account statements you're presenting?

And if there are - they will be questioned and you'll have to furnish statements for that account as well.

In my case child benefit always went to a state savings account for the child so never hit my account. Creche is paid via Revolut. We recently had a mortgage application and did declare the child but just reading this thread, I'm not sure the bank would ever have known different. In circumstances where the OP doesn't have childcare fees etc and feels they would manage repayments comfortably is the bank being reasonable applying a blanket penalty for dependants?

lawred2

maxsmum wrote: »

In my case child benefit always went to a state savings account for the child so never hit my account. Creche is paid via Revolut. We recently had a mortgage application and did declare the child but just reading this thread, I'm not sure the bank would ever have known different. In circumstances where the OP doesn't have childcare fees etc and feels they would manage repayments comfortably is the bank being reasonable applying a blanket penalty for dependants?

but you must have been paying sizeable amounts into Revolut?

and I've heard banks are now looking for statements from Revolut.

august12

lawred2 wrote:

and I've heard banks are now looking for statements from Revolut.

Yes they look for Revolut statements, anything unusual going out of your account to another account will be queried.

zreba

It's a mortgage fraud you're discussing here. A criminal offence.

PCros

The_Honeybadger wrote: »

I understand the reasons for the restrictions but how many childless couples get a mortgage and go off and have 2-3-4 kids? I know lots of people like that.

Can anyone comment on this as I've always wondered about it.

Couple A has 2 kids and gets €50k less.
Couple B has no kids, gets €50k more but will have 2 kids in 2 years.

Wheres the common sense?

irelandrover

PCros wrote: »

Can anyone comment on this as I've always wondered about it.

Couple A has 2 kids and gets €50k less.
Couple B has no kids, gets €50k more but will have 2 kids in 2 years.

Wheres the common sense?

One couple has 2 kids when applying and the other has none.
The bank doesnt base its offer on what it guesses happens in the future

lawred2

PCros wrote: »

Can anyone comment on this as I've always wondered about it.

Couple A has 2 kids and gets €50k less.
Couple B has no kids, gets €50k more but will have 2 kids in 2 years.

Wheres the common sense?

common sense wouldn't be expecting banks to tell the future anyway

PCros

irelandrover wrote: »

One couple has 2 kids when applying and the other has none.
The bank doesnt base its offer on what it guesses happens in the future

I still think its a bit flawed and it should be included into the overall amount of the loan to begin with for everyone.

It would be an interesting statistic to know how many couples have children pre/post mortgage application.

awec

Pretty much the same as any change in circumstances.

You could have your salary slashed.
You could get sacked.
You could be made redundant.
You could win the lottery.
You could end up in prison.

Bank can only go on the present status.

irelandrover

PCros wrote: »

I still think its a bit flawed and it should be included into the overall amount of the loan to begin with for everyone.

It would be an interesting statistic to know how many couples have children pre/post mortgage application.

How many kids would you assume everyone would have?

PCros

That's a fair enough point.

PCros

irelandrover wrote: »

How many kids would you assume everyone would have?

I have no idea hence it would be an interesting to know.

zreba

PCros wrote: »

Can anyone comment on this as I've always wondered about it.

Couple A has 2 kids and gets €50k less.
Couple B has no kids, gets €50k more but will have 2 kids in 2 years.

Wheres the common sense?

How do you know the Couple B will have 2 kids in 2 years? Couple's A costs are material, couple's B costs are potential and only a risk at this stage (may not happen). Banks can estimate the risks as they wish.

Gee_G

Thank you all for your replies.
We are dealing with a broker at the moment after being told by a bank that they would only give us less than half the value of the house we want to buy. It just seems a bit bizarre to me, I understand dependants obviously do put a reasonable strain on finances but to make a €50k difference is a bit much considering it's only a small mortgage we're looking for (we live in the country).
Anyway, I guess it's back to the drawing board for a while!

zreba

PCros wrote: »

I still think its a bit flawed and it should be included into the overall amount of the loan to begin with for everyone.

It would be an interesting statistic to know how many couples have children pre/post mortgage application.

Couple A can make 2 more babies in the next 2 years while Couple B may have none.

JJJackal

Gee_G wrote: »

Thank you all for your replies.
We are dealing with a broker at the moment after being told by a bank that they would only give us less than half the value of the house we want to buy. It just seems a bit bizarre to me, I understand dependants obviously do put a reasonable strain on finances but to make a €50k difference is a bit much considering it's only a small mortgage we're looking for (we live in the country).
Anyway, I guess it's back to the drawing board for a while!

I think the bank are saying your two dependents result in a 50 k reduction calculated as follows:

50k divided by 2 is 25k

25k divided by 3.5 (ie you can borrow 3.5 times your salary) is 7,142.86

Thus each dependent is costing you 7,142.86 gross salary per year or about 3.4k to 6k net depending on your tax brackets.

For the 3.4k thats about 65 euro (net) for a single dependent a week

Dont know if thats fair or not as I dont currently have a dependent

lawred2

JJJackal wrote: »

I think the bank are saying your two dependents result in a 50 k reduction calculated as follows:

50k divided by 2 is 25k

25k divided by 3.5 (ie you can borrow 3.5 times your salary) is 7,142.86

Thus each dependent is costing you 7,142.86 gross salary per year or about 3.4k to 6k net depending on your tax brackets.

For the 3.4k thats about 65 euro (net) for a single dependent a week

Dont know if thats fair or not as I dont currently have a dependent

I'm not sure that makes sense... a mortgage wouldn't be over one year. That 50K (plus interest) could be over 30 years.

Claw Hammer

maxsmum wrote: »

Our creche fees and child benefit don't Appear anywhere on our bank account. It just occurred to me I doubt the bank would know. Although it would be dishonest not to declare a child I agree. Not sure it would be fraud? As in a criminal offence?

http://www.irishstatutebook.ie/eli/2001/act/50/enacted/en/print

Look at Sections 6, 10 & 11.
Absolutely, the offences would be made out.
Section 4 (6) (6) A person guilty of theft is liable on conviction on indictment to a fine or imprisonment for a term not exceeding 10 years or both.

detoxkid

We got a mortgage recently with Ulster bank and we have two kids. We were offered 3.5 times our combined salary in principal which we didn't avail of because we didn't need that much. We had a 20% deposit which we had saved ourselves and really a really good savings record for 6 months when we went to apply. I did find them awkward to deal with towards the end but had nothing to do with the amount they were willing to lend us. I don't know if Ulster Bank go through brokers so it could be useful to approach them separately

jlm29

PCros wrote: »

Can anyone comment on this as I've always wondered about it.

Couple A has 2 kids and gets €50k less.
Couple B has no kids, gets €50k more but will have 2 kids in 2 years.

Wheres the common sense?

Couple B have the option of changing their family plans if they think they might struggle to pay their mortgage. They may decide to only have one child, or maybe they had planned on 4 but know that’s not possible now. Couple A, however, are unlikely to be able to give back a child if they’re struggling.

The_Honeybadger

JJJackal wrote: »

I think the bank are saying your two dependents result in a 50 k reduction calculated as follows:

50k divided by 2 is 25k

25k divided by 3.5 (ie you can borrow 3.5 times your salary) is 7,142.86

Thus each dependent is costing you 7,142.86 gross salary per year or about 3.4k to 6k net depending on your tax brackets.

For the 3.4k thats about 65 euro (net) for a single dependent a week

Dont know if thats fair or not as I dont currently have a dependent

In our case they took off €250 per month per child off our net income plus whatever childcare costs were. They then deducted a further €2k for living expenses.

Whatever was left over from net income was deemed to be what we could afford as a mortgage repayment and the mortgage we were offered was calculated from that.

I can see the logic in it in fairness. We had a very low ltv but they said there was no exceptions. We only found what we wanted within what we were offered because we are in a rural area with relatively cheap housing.

ted1

irelandrover wrote: »

One couple has 2 kids when applying and the other has none.
The bank doesnt base its offer on what it guesses happens in the future

They do stress test. Which looks at the future...

JJJackal

lawred2 wrote: »

I'm not sure that makes sense... a mortgage wouldn't be over one year. That 50K (plus interest) could be over 30 years.

But the bank make the decision based on one year eg the total amount you can borrow is salary by 3.5 times your income in one year - obviously the amount is paid off over 30 years

fjon

We found that KBC was the most favourable (2 kids). But yeah, made things a lot more difficult than applying without kids.
Iirc, they took a flat 400e per child off our monthly salary.