Saving/Applying for a mortgage 2020-22 Edition

Bluefoam

https://www.boards.ie/discussion/comment/120960314#Comment_120960314

Did you need a survey to tell you the interior needed an update?

kevgaa

https://www.boards.ie/discussion/comment/120960314#Comment_120960314

The main thing for the bank is that the valuation matches the sale price. Once the house is habitable and you can move in they wont have an issue.

Ikozma

https://www.boards.ie/discussion/comment/120935923#Comment_120935923

We got our loan approval today,8 working days before we were expecting it.

Relief isn't the word,we going on holidays on Sunday and have contracts to sign when we get back,everything is ready to go. The new owners of our house are ready to move in and we are ready to go to our new place,we are so lucky everything worked out so well for us that we were able to sell our place and buy a new place all to tie in with eachother.

I can now actually enjoy our holiday instead of spending the week stressing

Cork2021

https://www.boards.ie/discussion/comment/120967839#Comment_120967839

That’s brilliant news!! Had you a deposit already saved for the new house or are you using equity from the sale to fund it? That’s what we have to do. Unfortunately for us it wont tie in as easily. Probably have 2-4 week gap. But thankfully my wife’s parents are taking the 4 of us in for that period

Ikozma

Both,we saved a certain amount every month for about 4 years,plus equity from our sale.

We moving into my mother's for couple of weeks too just while legal stuff runs its course but I'd consider that a success really🙂

joanna672

Hi all what are peoples thoughts on the credit union rolling out nationwide centralised low cost no gimmick mortgages later this year?

Bluefoam

We'll, the interest rates on loans are reasonably high... Can't see it being much different for mortgages

Repo101

Have AIP from PTSB, gone sale agreed on a property, LTV is 80%. How long is it taking to get a formal loan offer at the moment? Is it weeks/months? What sort of additional questions can I expect? AIP was approved at the end of June. Thanks

makeitcount

Hi all,

I've gotten a loan approval from a county council Local Authority Home Loan application (3.45% fixed rate for 27 years) and coincidentally I received an mortgage Approval in Principle loan offer from the bank (4.75% fixed term for 36 months - it doesn't state what happens after the 36 months in the small print - I'll have to find out).

I don't have the head for interest rates and am applying as a single applicant.. I would think the lower interest rate is the way to go, but this mortgage process has been full of surprises :P

Would anyone have any advice on which way to go?

Unfortunately I don't earn enough to go down the First Home Scheme as couldn't afford to buy a new build.

Thanks a million.

newmember2

3.45% is a great rate fixed for the life of the mortgage at today's rates.

The bank rate, although initially higher will revert to their variable rate when the fixed term ends. Interest rates then may be higher or lower than what they are now, so that will determine how wise either decision was. Nobody can predict the future but there will be a lot of people thinking you will get a lower rate than 3.45 in the next 27 years but possibly a lot higher also.

Fred Cryton

https://www.boards.ie/discussion/comment/120960983#Comment_120960983

Not really. The main thing for the bank is that the valuation matches the loan amount.

The bank couldn't care less if you overpaid by throwing lots of your own cash to secure the property. All that matters is the price the bank gets from re-selling your home if you default - as long as that will cover the loan amount.

Example - you pay €1million for home, €400k in cash and €600k in bank loan. Bank will only care that the valuation is at least €600k.

Repo101

What is the difference between AIP and a formal loan offer these days from a banks perspective? What additional checks happen? I know AIP is not worth the paper it's written on.

Have AIP, gone sale agreed but the process to getting a decision on the formal loan offer has been quite slow. They have not asked for any additional information yet.

citizen1110

Question, anyone have experience with unpaid maternity leave while going for AIP?

We’ve strong savings etc. and plan to keep saving regularly during the 2.5months unpaid. We need to dip into the savings to make up the difference, is this reasonable from the bank’s perspective? I’ve calculated the lost earnings during the time and we’d be taking out less than that. Also plan to return anything we didn’t need. My thinking is take a little more out than needed just in case. Don’t want to dip into it twice!

dubal

https://www.boards.ie/discussion/comment/121035625#Comment_121035625

That cant be true as if the house is worth 600k, and there is a down turn then they have no buffer and are immediately exposed. There is a reason they offer lower rates for lower LTV as it represents lower risk for the bank

Bluefoam

https://www.boards.ie/discussion/comment/121035625#Comment_121035625

Thats no true in the slightest... Equity equals security... less chance of defaulting on the loan... if in the case of your death or something else; if the house is worth 1m then they can easily recoup 600k, but if the market value has (for instance) droppped to 500k on a mortgage of 600k, then they'll be left short 100k etc. So mortage holders who have equity in their homes are far more valueable.

LostBreadcrumb

Hi, a quick but important question about the Help to Buy scheme - if I haven't paid income tax in Ireland for 4 years yet (due to moving recently), would that disqualify me from the scheme? Any help is much appreciated, thanks!

Mimikyu

https://www.boards.ie/discussion/comment/121060111#Comment_121060111

No you’ll still be able to claim for the years you were working.

G_R

https://www.boards.ie/discussion/comment/121035625#Comment_121035625

Not at all.

In that example you now have a loan to value of 100%, which is outside of CBI rules and represents a serious risk to the lender.

The LTV will also feed into the lender's internal score card which risk rates the application.

Now, if it went from 1m, to 950,000 you would still have considerable equity so would probably be fine, but in all lenders where I'm familiar with their procedures, the valuation coming in at less than the amount originally advised and/or the purchase price would trigger the application to be reviewed by the underwriting team again to ensure they're still happy with the proposal.

Fred Cryton

https://www.boards.ie/discussion/comment/121060987#Comment_121060987

But the point is the bank valuation is not compared against the original price paid. It's compared against the loan amount plus an equity cushion. So lets say €700k in my example might be better. Bank loan of €600k plus €100k equity cushion.

Bluefoam

That's not much of a cushion... It's a little more than 10%

G_R

https://www.boards.ie/discussion/comment/121065327#Comment_121065327

And in that example, the bank may well accept the increased risk provided it didn't breach their CBI macro rules and it's within their risk appetite, but it's absolutely not a sure thing

G_R

Also, when I was underwriting mortgages, if a customer was paying massively over the valuation, even if it is with their own funds, and it still has an acceptable LTV, I'm gonna want a very good reason for it, or I won't be proceeding to be honest.

Cork2021

https://www.boards.ie/discussion/comment/121066078#Comment_121066078

As a former underwriter, once loan offer is approved and sent and used within the timeframe. Do they ask for info other than the conditions attached to be sent in again. Ie payslips, bank statement etc?

G_R

https://www.boards.ie/discussion/comment/121066290#Comment_121066290

Not unless they have any queries on what you've sent in. Otherwise you should be good to go.

Zenify

Can anyone PM a good mortgage broker? I went into AIB yesterday and the woman was terrible. I always thought going direct would be best but regretted my decision.

My wife is a sole trader and I'm an employee of her. Apparently in those situations the accountant needs to certify wages and accounts but I do all the accounts. It was funny how many times we went around in circles. She also kept asking about my wife's wages and I had to argue with her that the profit was the important figure for her to use.

Living in Templeogue area and looking to buy in Wicklow.

Ideally looking for a "free" broker but will consider paid ones if very good recommendation.

Bluefoam

https://www.boards.ie/discussion/comment/121157896#Comment_121157896

Two people secured by the income of a single company that can't guarantee wages... Sounds like they were right to ask. Broker will have to ask those same questions...

The bank are interested in the viability of the individual... the business is something else and confirmimg the financial integrity, viability, stability, ownership, stakeholders and creditors of a business would not be viable for a standard mortgage. If you are a bigger fish, you can work the system and hold everything in the business or trusts, but in that case you'd be unlikely to need a mortage.

The banks will want you to have a solid fanancial basis in order to trust you with mortaging a large amount of money. Unless you can convince them that you have that stability, they are unlikely to lend to you. Most people spend years making sure they have salaries or wages coming in so that when they need to answer those questions, they have everything lined up.

Zenify

https://www.boards.ie/discussion/comment/121158135#Comment_121158135

To be honest I was not expecting a mortgage. I believe we most likely won't get one. Due to the reason you mentioned.

Questions about the viability of the business and safety of our income is perfectly valid.

Issue was my wife has a standing order into her personal account. In my opinion that figure is irrelevant as a sole traders income. It is an illusion of a wage. Eventually I gave her the figure and it is far bigger than what profit is and she stopped asking. If that was a relevant figure we can increase it easily for a higher mortgage.

classynow

https://www.boards.ie/discussion/comment/121053155#Comment_121053155

Same question, did you get your letter of offer yet?

After a lot of back and forth I've got an underwritten AIP, went sale agreed, requested letter of offer, and now I'm bitting my nails, waiting for an answer.

Repo101

Yes got the loan offer last week. Once you have underwritten AIP and no change in circumstances then you should be fine.

jazz_jazz

Hi all. Somebody might be able to answer this question for me please.

I got my AIP a couple of months ago. I've since taken on an acting position which will give me an allowance on top of my salary. As it stands, it is for this year only at the moment but could end up lasting for longer. Would the bank increase the mortgage amount based on this increase salary even if duration of this extra income isn't expected to be longterm?

I assume it won't make any difference but worth asking anyway.

Any information on this would be greatly appreciated. Thanks