Do we stand a chance to get mortgage?

Lily_Aldrin7

Hi there, I’m just looking for some opinions from people who have a better idea of how hard it is to get a mortgage.
My partner and I don’t have much money, essentially we only get enough to get by. I work full time on a low salary of 26 k plus some bonus that doesn’t amount to more than 1 k a year. My partner does night shifts 2-3 times a week but only during “high” season so nothing during the winter. We have 2 small children so he minds them during the day and we don’t pay for childcare. My partner’a dad has an apartment in his home country that he wants to sell and it’s value is around 80 k which he would like to give us so we can possibly buy our own place here (we live in the south east). We currently pay 900 euro a month for rent, never late with it. Do we stand any chance of getting mortgage or will they laugh in our faces if we even ask ?

listermint

Have you savings. Are you working towards deposits. What's your credit history. You need to look at these things and speak to a good broker for advice.

Samuel T. Cogley

You can apply for 3.5 times your salary but they will also look at affordability of those repayments. They will take a significant chunk off for two children I'm afraid. You'll probably find that you'd be able to borrow so little you wouldn't make the minimum mortgage amount so will not be able to borrow. Sorry to be the bearer of bad news. Nothing stopping you approaching a bank though and seeing what the story is I just wouldn't go paying a broker.

Your best option is to go talk to the bank. I personally think you’d be below the net disposable income criteria.

Eric Cartman

so basically 26k is kind of your ongoing income for the year. If you saved 10k you might just be able to purchase something for 100k , would you get anything suitable for 100k where you are ? , i think it might be a bit far out of reach.

Lily_Aldrin7

listermint wrote: »

Have you savings. Are you working towards deposits. What's your credit history. You need to look at these things and speak to a good broker for advice.

We have around 10 k saved but it’s old savings from before we had children.
We have no debt, we’ve never had credit cards, debit cards only- is this a good or a bad thing ?

Lily_Aldrin7

Samuel T. Cogley wrote: »

You can apply for 3.5 times your salary but they will also look at affordability of those repayments. They will take a significant chunk off for two children I'm afraid. You'll probably find that you'd be able to borrow so little you wouldn't make the minimum mortgage amount so will not be able to borrow. Sorry to be the bearer of bad news. Nothing stopping you approaching a bank though and seeing what the story is I just wouldn't go paying a broker.

No worries, that’s what I think myself !

handlemaster

OP you are bearly getting by. Best to focus on getting permannt work for yourself and getting a higher wage for your partner

Lily_Aldrin7

Eric Cartman wrote: »

so basically 26k is kind of your ongoing income for the year. If you saved 10k you might just be able to purchase something for 100k , would you get anything suitable for 100k where you are ? , i think it might be a bit far out of reach.

My partner’s father is offering to give us around 80 k after selling his apartment so 100 k would be plenty- a good 3- bedroom house here is around 160 k

Lily_Aldrin7

handlemaster wrote: »

OP you are bearly getting by. Best to focus on getting permannt work for yourself and getting a higher wage for your partner

I know what you mean, I just think that paying mortgage would be so much better and probably even cheaper than paying rent.

Eric Cartman

Lily_Aldrin7 wrote: »

My partner’s father is offering to give us around 80 k after selling his apartment so 100 k would be plenty- a good 3- bedroom house here is around 160 k

youd have to check with somebody but that 80k some will likely be eaten in tax , you'd also still have to demonstrate a savings record but if you can get the house you want for 160k you might just about do it, especially as theres only 50% mortgage on it.

Have a look at the council mortgage scheme, not sure of the entire details on it but it is suitable for lower incomes.

handlemaster

Lily_Aldrin7 wrote: »

I know what you mean, I just think that paying mortgage would be so much better and probably even cheaper than paying rent.

I understand. Still think you would be better off getting more or of an income first then focus on buying a home. A better salary /position may not be where you are currently living.

SteM

Will you have to pay Capital Acquisitions Tax on the 80k?

Lily_Aldrin7

Eric Cartman wrote: »

youd have to check with somebody but that 80k some will likely be eaten in tax , you'd also still have to demonstrate a savings record but if you can get the house you want for 160k you might just about do it, especially as theres only 50% mortgage on it.

Have a look at the council mortgage scheme, not sure of the entire details on it but it is suitable for lower incomes.

Oh no, I didn’t realise that the help we get would be taxable! This was my only hope really! Thank you so much for letting me know, I will do a bit of a research!

Lily_Aldrin7

handlemaster wrote: »

I understand. Still think you would be better off getting more or of an income first then focus on buying a home. A better salary /position may not be where you are currently living.

Unfortunately, a better position would be hard for me to find. I used to make much more in Dublin but we still couldn’t manage living there with the 2 children with the rent, childcare and travel costs.

bunderoon

Ye really need to sort out better employment/income. Upskill/certifications etc. Since you are the main income in the house, if something happens to you, ye will be in big trouble.
Service based jobs will diminish greatly in the next 5-10 years. And your kids college expenses will be significant by that time.

A mortgage of 160k is would be about 650-700 per month. A saving of 2-250 a month versus renting. That's 2-3k a year. I'd gamble and wait a few years. The next recession is just around the corner. Don't buy in an overheated market.

MIKEKC

Lily_Aldrin7 wrote: »

Oh no, I didn’t realise that the help we get would be taxable! This was my only hope really! Thank you so much for letting me know, I will do a bit of a research!

E80,000 from father to son wouldn't create a tax liability. Threshold is e350,000 or thereabouts

Lily_Aldrin7

SteM wrote: »

Will you have to pay Capital Acquisitions Tax on the 80k?

I’m just researching this now and I’m not entirely clear on it, it’s the first time we would ever get any money from anyone so we’re not over the 325 k limit but I feel like I must be misunderstanding it!

punisher5112

Move to a place where a property is much cheaper, commute, change jobs, try and get work that will work around the kids as he should well be able to get work, plenty of jobs out there.

Lily_Aldrin7

bunderoon wrote: »

Ye really need to sort out better employment/income. Upskill/certifications etc. Since you are the main income in the house, if something happens to you, ye will be in big trouble.
Service based jobs will diminish greatly in the next 5-10 years. And your kids college expenses will be significant by that time.

A mortgage of 160k is would be about 650-700 per month. A saving of 2-250 a month versus renting. That's 2-3k a year. I'd gamble and wait a few years. The next recession is just around the corner. Don't buy in an overheated market.

Yep, maybe use the money and invest in getting better degrees, I was thinking about that too

Samuel T. Cogley

Lily_Aldrin7 wrote: »

I’m just researching this now and I’m not entirely clear on it, it’s the first time we would ever get any money from anyone so we’re not over the 325 k limit but I feel like I must be misunderstanding it!

It's 325K. The 80K would not be taxed.

mycro2013

If your father inlaw gives the money solely to his son,your partner no cat will be payable.. If he however gave the money as a gift to both of you. Your share would be liable for cat.

Under current legislation, parents can give a child gifts or an inheritance of up to €310,000 tax-free (the Group A threshold) before the child owes any Capital Acquisitions Tax (CAT).

Samuel T. Cogley

mycro2013 wrote: »

If your father inlaw gives the money solely to his son,your partner no cat will be payable.. If he however gave the money as a gift to both of you. Your share would be liable for cat.

Under current legislation, parents can give a child gifts or an inheritance of up to €310,000 tax-free (the Group A threshold) before the child owes any Capital Acquisitions Tax (CAT).

335K now from what I can see but in any event it's over 80K.

Eric Cartman

MIKEKC wrote: »

E80,000 from father to son wouldn't create a tax liability. Threshold is e350,000 or thereabouts

they did say its from a property sale in another country though, now could be completely wrong but depending on where that is , it may create a liability on the fathers side or the sons.

punisher5112

Credit unions are giving mortgages up to €100k.

If you buy a property and oy needs a very small mortgage it's possible.

mycro2013

Have you looked at getting a rebuilding Ireland home loan. A trip to your local citizen information would offer details of the scheme.

Lily_Aldrin7

mycro2013 wrote: »

Have you looked at getting a rebuilding Ireland home loan. A trip to your local citizen information would offer details of the scheme.

This is brilliant! Thank you so much, I didn’t know about it at all!

Stopitwillya

You said south east so it's hard to know which town/city you are looking to buy in but if it's Waterford you could buy this at 130k.

https://touch.daft.ie/for-sale/semi-detached-house-15-briot-close-templars-hall-waterford-city-co-waterford/1166864

Use 5k from your savings, other 5k needed for solicitor, etc. 80k gift.
Would mean you would have equity of 85k and only need to borrow 45k.
Easily affordable as you are already paying €900 pm rent and with so much equity bank would surely approve. I'm sure their would be similar houses in Kilkenny, Wexford, etc.

handlemaster

MIKEKC wrote: »

E80,000 from father to son wouldn't create a tax liability. Threshold is e350,000 or thereabouts

But the money will be going to purchase a home not only for the son but the daughter in law. Therefore she will be a beneficiare also. I'd imagine that on 50% taxes would be due. Unless of course from husband to wife would be exempt.

silver2020

So you will have circa €80,000 - €90,000 between savings and a gift from your partner's dad to your partner. (it can't be to you as there would be tax implications).

House in the area you are looking at is about €160,000.

Allow for expenses and furniture, you will be looking for a mortgage of about €80,000-€90,000.

That will cost about €450/month on a 20 year term.


The problem you are up against is earning €26,000 and partner not earning much except on a seasonal basis - even if he could get a job for evenings / days you are off and get 12-15k a year, you'd ahve a chance. But on €26k and two children, the banks won't look at it.



But as above, both rebuilding Ireland homeloan and joining the local credit union where 20 year small mortgages will become available soon (in some cases already available) will give you a fighting chance. But in reality, you need to bring joint earnings up to €40,000. Considering the job market, that shouldn't be too difficult if you really wanted it.

mycro2013

The loan rates being charged by the credit unions are extortionate. Credit unions are fine for small loans but
once the sums increase they are not competitive.

To the OP a trip to your local county councillor would also be beneficial as the rebuilding Ireland loan is administrated by the local authority.

Creamy Goodness

bunderoon wrote: »

next recession is just around the corner. Don't buy in an overheated market.

This is a pretty large gamble, who’s to say banks will give mortgages in the recession to any but the highest of earners.

MIKEKC

Lily_Aldrin7 wrote: »

I’m just researching this now and I’m not entirely clear on it, it’s the first time we would ever get any money from anyone so we’re not over the 325 k limit but I feel like I must be misunderstanding it!

No you are not misunderstanding it. It was e350,000 before the crash, then dropped to E300.000 Recently increased to E325,000

jlm29

I assume you’re not married as you’ve said partner rather than husband. It would probably be more straightforward if you got married

silver2020

mycro2013 wrote: »

The loan rates being charged by the credit unions are extortionate. Credit unions are fine for small loans but
once the sums increase they are not competitive.

To the OP a trip to your local county councillor would also be beneficial as the rebuilding Ireland loan is administrated by the local authority.

Those offering mortgages are about 4%
https://www.wexfordcreditunion.ie/loan-calculator/

Higher than the bank, but may make sense for the OP as they are only looking for about 80k and the monthly mortgage of just €500 for 80k over 20 years will get them their house without an onerous repayment

Lily_Aldrin7

jlm29 wrote: »

I assume you’re not married as you’ve said partner rather than husband. It would probably be more straightforward if you got married

No, we’re not married but if being married would make it any better, we can do it (how romantic!)

Lily_Aldrin7

silver2020 wrote: »

Those offering mortgages are about 4%
https://www.wexfordcreditunion.ie/loan-calculator/

Higher than the bank, but may make sense for the OP as they are only looking for about 80k and the monthly mortgage of just €500 for 80k over 20 years will get them their house without an onerous repayment

I will definitely look into it, our savings are in a credit union. Our credit union currently doesn’t do mortgages but who knows, maybe that will change

mycro2013

silver2020 wrote: »

Those offering mortgages are about 4%
https://www.wexfordcreditunion.ie/loan-calculator/

Higher than the bank, but may make sense for the OP as they are only looking for about 80k and the monthly mortgage of just €500 for 80k over 20 years will get them their house without an onerous repayment

The rate being offered is over double the rbi loan rate of 2%. The ethos of credit unions being for their members benefit is well and truly gone. They charge a premium for the service they provide.

jlm29

Lily_Aldrin7 wrote: »

No, we’re not married but if being married would make it any better, we can do it (how romantic!)

I’m not very romantic either, I’m more of a practical kinda gal! . But if you’re the one with the wage, and he’s the one with the deposit, especially if the deposit is being gifted, it seems as though it might make things more straightforward if ye were married, in terms of tax liability etc. In fairness, with two kids, it’s a sensible thing to do anyhow.

silver2020

mycro2013 wrote: »

The rate being offered is over double the rbi loan rate of 2%. The ethos of credit unions being for their members benefit is well and truly gone. They charge a premium for the service they provide.

They do charge a premium.

No chance of the OP being able to get 2% rate - or anyone for that matter. The lowest variable rate on the market is about 3%.

On circa €30k income the banks will not entertain the OP. Neither would the CU except for the fact that the OP will have 50% of the price of the house.

So, yes, its more expensive, but a hell of a lot better value than renting

deisedevil

jlm29 wrote: »

I’m not very romantic either, I’m more of a practical kinda gal! . But if you’re the one with the wage, and he’s the one with the deposit, especially if the deposit is being gifted, it seems as though it might make things more straightforward if ye were married, in terms of tax liability etc. In fairness, with two kids, it’s a sensible thing to do anyhow.

Just a heads up on the whole gift situation. I bought a house from my parents. They gifted me some equity in the house. I wasn't married to my partner. We married the following year and I was about to put her name on title of house also. Broker and solicitor both said they would have imagined it was fine to add spouse and not have revenue looking for tax on the gift the spouse was now to be the beneficiary of. I checked with revenue just to be sure. I was passed from one Dept. to another before someone very knowledgeable explained that I could not transfer the gift even to my spouse until 3 years had passed from the time that I had received the gift otherwise tax would be due, if it was noticed. So we had to wait. Solicitor looked into it further and indeed this is the situation. To avoid the tax you would need to go 2 in mortgage-1 in title. Not all banks are willing to do this. It was a right nuisance. I had to stay on much higher rates than were available out there just to wait for the three years to be up.

deisedevil

jlm29 wrote: »

I’m not very romantic either, I’m more of a practical kinda gal! . But if you’re the one with the wage, and he’s the one with the deposit, especially if the deposit is being gifted, it seems as though it might make things more straightforward if ye were married, in terms of tax liability etc. In fairness, with two kids, it’s a sensible thing to do anyhow.

Just a heads up on the whole gift situation. I bought a house from my parents. They gifted me some equity in the house. I wasn't married to my partner. We married the following year and I was about to put her name on title of house also. Broker and solicitor both said they would have imagined it was fine to add spouse and not have revenue looking for tax on the gift the spouse was now to be the beneficiary of. I checked with revenue just to be sure. I was passed from one Dept. to another before someone very knowledgeable explained that I could not transfer the gift even to my spouse until 3 years had passed from the time that I had received the gift otherwise tax would be due, if it was noticed. So we had to wait. Solicitor looked into it further and indeed this is the situation. To avoid the tax you would need to go 2 in mortgage-1 in title. Not all banks are willing to do this. It was a right nuisance. I had to stay on much higher rates than were available out there just to wait for the three years to be up.

Bandana boy

If you have history of 900 a month rent , and looking to borrow 80K against a 160K house you will have very little trouble securing a morgtage , even on a low income.

Over 30 years this would be under 400 a month and you have shown ability to pay 900 .
The risk to banks is small with such high equity in the house.

Billythekid19

Lily_Aldrin7 wrote: »

We have around 10 k saved but it’s old savings from before we had children.
We have no debt, we’ve never had credit cards, debit cards only- is this a good or a bad thing ?

This might sound cynical but your better off applying for social housing, might as well milk the system like everyone else does. Fastest way of getting a free house is to go homeless, will likely be housed in a 3 bed within 6 months.

theteal

Bandana boy wrote: »

If you have history of 900 a month rent , and looking to borrow 80K against a 160K house you will have very little trouble securing a morgtage , even on a low income.

Over 30 years this would be under 400 a month and you have shown ability to pay 900 .
The risk to banks is small with such high equity in the house.

This would be my thinking on the situation also but I have no experience of the Irish market. Surely that's just common sense.

In the UK, we had a deposit for ~22% equity (saved in Euro from my previous life), very little to show in regular GBP savings but the monthly mortgage would be >£400 less than the rent we had been paying for 6+ years. No issue whatsoever, even with one little dependent accounted for.

Loveinapril

Billythekid19 wrote: »

Fastest way of getting a free house is to go homeless, will likely be housed in a 3 bed within 6 months.

You have absolutely no idea what you are talking about.

silver2020

Bandana boy wrote: »

If you have history of 900 a month rent , and looking to borrow 80K against a 160K house you will have very little trouble securing a morgtage , even on a low income.

Over 30 years this would be under 400 a month and you have shown ability to pay 900 .
The risk to banks is small with such high equity in the house.

Banks won't even consider an applicant that is earning under €30k. My brother in law tried it a couple of years ago - he had 30% deposit, only needed 80k but was earning 28k.
The apartment was €110k - they now sell for 150k+ (ouch)

Billythekid19

Loveinapril wrote: »

You have absolutely no idea what you are talking about.

While local authorities do not have a statutory obligation to house people, they do have general responsibility under the Housing Act 1988 for the provision of housing for adults who cannot afford to provide it for themselves. They may help with accommodation either by providing housing directly or through arrangements with voluntary housing organisations and other voluntary bodies. They may also provide funding to voluntary bodies for emergency accommodation and for long-term housing for homeless people.

viclemronny

Lily_Aldrin7 wrote: »

Oh no, I didn’t realise that the help we get would be taxable! This was my only hope really! Thank you so much for letting me know, I will do a bit of a research!

There is a certain allowance with Capital Acquisition Tax. It's a life time limit that you can be gifted/inherit without paying tax on it. Check with citizens information maybe for more details.

Newuseruntaken

Bandana boy wrote: »

If you have history of 900 a month rent , and looking to borrow 80K against a 160K house you will have very little trouble securing a morgtage , even on a low income.

Over 30 years this would be under 400 a month and you have shown ability to pay 900 .
The risk to banks is small with such high equity in the house.

Yeah the partners dole would be 900 a month so that alone will easily cover the mortgage

NIMAN

Newuseruntaken wrote: »

Yeah the partners dole would be 900 a month so that alone will easily cover the mortgage

Sorry but these are two words which shouldn't be in the same sentence.

If either person trying to buy a house is on the dole, you have zero chance of being cleared for a mortgage.

I think the OP has no hope, might be harsh but thats the reality.