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Saving/Applying for a mortgage 2020-22 Edition

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  • Registered Users Posts: 17,948 ✭✭✭✭ ELM327


    I'm a owner occupier and my friend rents the spare room off me for €100 p/w. She pays me cash in hand but since Covid19 I've been self lodging the money into my account.

    Was planning on applying for a mortgage in September and now thinking it might be a better idea for her to transfer the money over in case the bank query this? Or will it matter considering it's a relatively small amount?
    No need for it to be cash in hand, first 12k you get in renting a room(s) in your house is tax free.


  • Registered Users Posts: 930 ✭✭✭ OEP


    ELM327 wrote: »
    No need for it to be cash in hand, first 12k you get in renting a room(s) in your house is tax free.

    14k now I think


  • Registered Users Posts: 30 EvoEvo


    Hi all,

    I'm planning to have the first mortgage appointment with Aib later this year after the lockdown (first-time buyer)...

    I have a question about the amount that a bank can lend.

    I have already checked the mortgage online calculator and I can get around 120K..I'm just wondering.. are they very strict about this? I mean under some circumstances Can they land an higher amount?

    I don’t have any debts or previous loans

    I'm hoping to get 20k more to be honest....

    Thank you in advance


  • Registered Users Posts: 26,419 ✭✭✭✭ Creamy Goodness


    EvoEvo wrote: »
    Hi all,

    I'm planning to have the first mortgage appointment with Aib later this year after the lockdown (first-time buyer)...

    I have a question about the amount that a bank can lend.

    I have already checked the mortgage online calculator and I can get around 120K..I'm just wondering.. are they very strict about this? I mean under some circumstances Can they land an higher amount?

    I don’t have any debts or previous loans

    I'm hoping to get 20k more to be honest....

    Thank you in advance

    Generally the max they can lend is 3.5x your gross salary. there are exceptions banks can do (loan to income LTI, or loan to value LTV)

    LTI exception - where they can lend 4.5x your gross
    LTV exception - where they can accept a greater than 80% Loan to value figure.

    You have to meet certain criteria set out by the bank and only 20% of their mortgage drawdowns can be exceptions so if they've given them all out already you're out of luck.

    There's a lot of factors that come into play as to whether a bank will give you an exception or not, salary is a big one, the only way to know for sure is to talk to the bank.

    Just FYI no previous loans can be seen as a bad thing as it doesn't show you have an ability to pay a loan.


  • Registered Users Posts: 172 ✭✭ sparkle109


    Hi all
    Hoping to go for a mortgage later this year. We will hopefully have approx 6% off deposit and hoping to go for new build. What way will the mortgage work, do I need the full deposit even if going with the help to buy to get approved? If so can we apply before having the full 10% and get approved in principle?


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  • Registered Users Posts: 783 ✭✭✭ The Phantom Jipper


    Something I was wondering; Taking Ulster Bank's 2.3% two year rate for example - is this an introductory type offer and the next set of fixed rates increase for existing customers, or could you lock in another two years at 2.3% if it was still available?


  • Registered Users Posts: 3,134 ✭✭✭ fifth


    sparkle109 wrote: »
    Hi all
    Hoping to go for a mortgage later this year. We will hopefully have approx 6% off deposit and hoping to go for new build. What way will the mortgage work, do I need the full deposit even if going with the help to buy to get approved? If so can we apply before having the full 10% and get approved in principle?

    You don't need the full 10% if you're getting the HTB.

    And yes you can apply for approval in principle without having your full 10% deposit. As long as you are showing repayment capacity and evidence of regular saving.


  • Registered Users Posts: 37 ✭✭✭ Techn0


    Generally the max they can lend is 3.5x your gross salary. there are exceptions banks can do (loan to income LTI, or loan to value LTV)

    LTI exception - where they can lend 4.5x your gross
    LTV exception - where they can accept a greater than 80% Loan to value figure.

    You have to meet certain criteria set out by the bank and only 20% of their mortgage drawdowns can be exceptions so if they've given them all out already you're out of luck.

    There's a lot of factors that come into play as to whether a bank will give you an exception or not, salary is a big one, the only way to know for sure is to talk to the bank.

    Just FYI no previous loans can be seen as a bad thing as it doesn't show you have an ability to pay a loan.

    This is good advice right here. Just to add to this, I don't think many (of any) banks are entertaining exceptions right now. I'm in the middle of this process with my broker (and had spoken to separate bank) and currently none are lending more than the 3.5x LTI. Anyone else come across this?


  • Registered Users Posts: 560 ✭✭✭ Pivot Eoin


    Techn0 wrote: »
    This is good advice right here. Just to add to this, I don't think many (of any) banks are entertaining exceptions right now. I'm in the middle of this process with my broker (and had spoken to separate bank) and currently none are lending more than the 3.5x LTI. Anyone else come across this?

    This is the exact same with us. We've been saving 4.5k per month and joint income of €115k (€35k over the necessity level for LTI exemption) and been told no exceptions at this time, but it may change.

    EBS who weren't approached by our Broker seemed to suggest Exceptions may still be available and based on our savings and income we would in normal circumstances be a strong candidate.


  • Registered Users Posts: 37 ✭✭✭ Techn0


    Pivot Eoin wrote: »
    This is the exact same with us. We've been saving 4.5k per month and joint income of €115k (€35k over the necessity level for LTI exemption) and been told no exceptions at this time, but it may change.

    EBS who weren't approached by our Broker seemed to suggest Exceptions may still be available and based on our savings and income we would in normal circumstances be a strong candidate.

    Completely agree. It's very frustrating being told you're a model candidate and cant get approved for the amount required with everything that's going on. I'm looking for a very minor exception myself (circa 3.7x LTI). I can fund the gap myself but going into a new build I don't want to be stretched.

    There was a good article on IT yesterday regarding this. It sounds like AIB may still be entertaining exception applications so might be worth exploring.

    Article in question:

    https://www.google.com/amp/s/www.irishtimes.com/business/personal-finance/househunters-squeezed-as-banks-tighten-rules-in-covid-19-crisis-1.4240113

    I'm going to reach out to AIB myself next week and will keep you updated on whether or not they're willing to lend above the 3.5x. Also from speaking to BOI yesterday, the manager had told me that they have no idea when it may reopen so they haven't put a date on it yet.

    Best of luck with your purchase!


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  • Registered Users Posts: 560 ✭✭✭ Pivot Eoin


    Techn0 wrote: »
    Completely agree. It's very frustrating being told you're a model candidate and cant get approved for the amount required with everything that's going on. I'm looking for a very minor exception myself (circa 3.7x LTI). I can fund the gap myself but going into a new build I don't want to be stretched.

    There was a good article on IT yesterday regarding this. It sounds like AIB may still be entertaining exception applications so might be worth exploring.

    Article in question:

    https://www.google.com/amp/s/www.irishtimes.com/business/personal-finance/househunters-squeezed-as-banks-tighten-rules-in-covid-19-crisis-1.4240113

    I'm going to reach out to AIB myself next week and will keep you updated on whether or not they're willing to lend above the 3.5x. Also from speaking to BOI yesterday, the manager had told me that they have no idea when it may reopen so they haven't put a date on it yet.

    Best of luck with your purchase!

    Yeah thanks mate. Would probably make sense as EBS are owned by AIB and told me similar. My application is going in with them next week so I'll let you know.

    I'm the same boat, only need a minor one, may not even need it but I did want to have the option just because the value of house you get in the majority of the 4 bed market is far better than the desirable 3 bed market.

    So probably need a small exception to allow me to afford a move in ready 4 bed in the area I'm looking without being down to 0 in all accounts - higher mortgage means you ideally have 6 months salary buffer just in case the worst happens.


  • Registered Users Posts: 30 EvoEvo


    Thank you for your replies guys,
    I would just me asking for a mortgage so I believe the exception is not possible in my case..anyway I'll check with Aib when I have the appointment.

    Meantime I'll keep saving and hoping for a property market reduction ( yes I know I want to be optimistic).


  • Registered Users Posts: 37 ✭✭✭ Techn0


    EvoEvo wrote: »
    Thank you for your replies guys,
    I would just me asking for a mortgage so I believe the exception is not possible in my case..anyway I'll check with Aib when I have the appointment.

    Meantime I'll keep saving and hoping for a property market reduction ( yes I know I want to be optimistic).

    Just so you know I thought the same about getting an exception as a single applicant (I'm also applying solo), however the lady in BOI said that didn't factor in whatsoever. I even have a dependant (so again less likely) however it all came down to affordability. I was saving over double what a mortgage payment would be and she said as long as you can live comfortably with a means tested mortgage (and any other commitments), you should be fine. The number of people applying is a bit of a non-issue.

    I should caveat by saying I have very good job security so it does depend on the nature of your job.


  • Registered Users Posts: 841 ✭✭✭ Plasandrunt


    ELM327 wrote: »
    No need for it to be cash in hand, first 12k you get in renting a room(s) in your house is tax free.

    Oh the cash in hand is just for convenience rather than anything to do with tax purposes


  • Registered Users Posts: 453 ✭✭ Bargain_Hound


    Waiting on drawdown from PTSB. Mortgage Advisor stated it’s gone for final audit checks before issuing of cheque, anybody know how long this takes and how long to expect funds to issue? Due to close sale Friday but not sure we will meet this now.


  • Closed Accounts Posts: 135 ✭✭ moonlighting_1


    Out of work sense x-mas luckily back to full time work now. Will I have to wait another 6 months or more before I can apply for a mortgage. Full work last year.


  • Registered Users Posts: 949 ✭✭✭ Prezatch


    Was also banking on an exemption here, have been saving consistently for 18 months and have the deposit...exemption now not looking likely


  • Registered Users Posts: 30 EvoEvo


    Hi Guys,

    I have some questions just to clear my mind....

    1) the Mortage approval process is free?

    2) Question about the payment methods... the booking deposit is a normal bank transfer to the estate agent and the mortgage is released through a loan cheque from the bank...

    What about the money that I have been saving ? eveything is included in the cheque?

    Thank you in advance


  • Registered Users Posts: 26,419 ✭✭✭✭ Creamy Goodness


    1) yes. Don’t forget banks profit a fair bit from you borrowing money. It should be at the very least free :).

    2) After you pay booking deposit to the estate agent, the rest of your deposit is transferred to your solicitor and the loan cheque is issued to them and they release the funds at the end of the sale.


  • Moderators, Category Moderators, Sports Moderators Posts: 49,428 CMod ✭✭✭✭ awec


    EvoEvo wrote: »
    Hi Guys,

    I have some questions just to clear my mind....

    1) the Mortage approval process is free?

    2) Question about the payment methods... the booking deposit is a normal bank transfer to the estate agent and the mortgage is released through a loan cheque from the bank...

    What about the money that I have been saving ? eveything is included in the cheque?

    Thank you in advance

    Booking deposit = bank transfer to estate agent.
    Remaining deposit when signing contract = bank transfer to solicitor.

    Drawdown = mortgage value transferred to your solicitor, who passes it on to the developers solicitor. You never see or touch any money / cheque in this process, and are not involved in any transfers except telling your bank that you're happy to draw down.


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  • Registered Users Posts: 1,020 ✭✭✭ Maz2016


    Prezatch wrote: »
    Was also banking on an exemption here, have been saving consistently for 18 months and have the deposit...exemption now not looking likely

    I’m in the exact same boat. As a single person you kind of need the exemption. I heard Paul Merriman On Q102 on Saturday saying most banks are stopping the exemptions except BOI and AIB but their expected to do it within the next few weeks.
    He also said he expects property prices to drop 10-15% perhaps 20%. These aren’t my opinions Paul Merriman is a financial advisor aka Ask Paul.


  • Registered Users Posts: 30 EvoEvo


    awec wrote: »
    Booking deposit = bank transfer to estate agent.
    Remaining deposit when signing contract = bank transfer to solicitor.

    Drawdown = mortgage value transferred to your solicitor, who passes it on to the developers solicitor. You never see or touch any money / cheque in this process, and are not involved in any transfers except telling your bank that you're happy to draw down.

    Thanks,

    Could be a silly question but is very strange for me transfer large amount of money to the solicitor by bank transfer...is it safe?
    Usually in my country we use a nominative cheque that the solicitor will deliver to the seller.

    Thanks


  • Registered Users Posts: 4,639 ✭✭✭ CIP4


    I have gone through the full mortgage application process with PTSB and it was put forward to an underwriter and today I got an approval in principle letter. Is this as far as I can go in terms of being approved without having a specific house and getting it valued etc. ?


  • Registered Users Posts: 289 ✭✭ guyfawkes5


    CIP4 wrote: »
    I have gone through the full mortgage application process with PTSB and it was put forward to an underwriter and today I got an approval in principle letter. Is this as far as I can go in terms of being approved without having a specific house and getting it valued etc. ?
    Yes. At the point you're sale agreed on a property, the bank will make an offer letter for you to sign and then start the process with home insurance and the valuer.


  • Registered Users Posts: 949 ✭✭✭ Prezatch


    CIP4 wrote: »
    I have gone through the full mortgage application process with PTSB and it was put forward to an underwriter and today I got an approval in principle letter. Is this as far as I can go in terms of being approved without having a specific house and getting it valued etc. ?

    You need to select a specific property address you are considering bidding on in order to apply for higher than 3.5x LTI (exemptions) as far as I know, if that's what you mean.


  • Registered Users Posts: 2,825 ✭✭✭ wally79


    Prezatch wrote: »
    You need to select a specific property address you are considering bidding on in order to apply for higher than 3.5x LTI (exemptions) as far as I know, if that's what you mean.

    We got an exemption without a property


  • Registered Users Posts: 1,443 ✭✭✭ DelBoy Trotter


    Prezatch wrote: »
    You need to select a specific property address you are considering bidding on in order to apply for higher than 3.5x LTI (exemptions) as far as I know, if that's what you mean.
    wally79 wrote: »
    We got an exemption without a property

    +1 on Wally79's response. We got the exemption without a specific property in mind


  • Registered Users Posts: 289 ✭✭ guyfawkes5


    Prezatch wrote: »
    You need to select a specific property address you are considering bidding on in order to apply for higher than 3.5x LTI (exemptions) as far as I know, if that's what you mean.
    This is only the case with Bank of Ireland - other banks will give you one up front without a property in mind.

    However, in both cases the banks can withdraw the exemption at any time, so neither gives a greater security.


  • Registered Users Posts: 2,784 ✭✭✭ chillywilly


    Does anyone know the banks stance on Coinbase payments coming I n to my bank account (bitcoin etc)?

    I’ve heard they can be unfavourable.....


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  • Registered Users Posts: 4,639 ✭✭✭ CIP4


    guyfawkes5 wrote: »
    Yes. At the point you're sale agreed on a property, the bank will make an offer letter for you to sign and then start the process with home insurance and the valuer.

    Thanks I spoke to the Mortgage advisor this afternoon and she echoed this basically next step is find a house and get it valued. It’s the first time I have applied for and mortgage so nice to have got this far and be in the position to go looking at houses.
    Prezatch wrote: »
    You need to select a specific property address you are considering bidding on in order to apply for higher than 3.5x LTI (exemptions) as far as I know, if that's what you mean.

    What I was granted was just under the 3.5 which is all I should need anyway. Seems not getting an exemption makes things easier well at the moment anyway.


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