Saving/Applying for a mortgage 2020-22 Edition

Kav_Piero

Would anyone be able to offer some advice please in relation to what is technically classed as "savings" by banks when applying for a mortgage?

Current situation at the moment is me and my partner have a combined salary of 80k and we have circa 35k locked into a mortgage savers account this has been built up over the last couple of years by saving a combined €400 a month via direct debit (Very low amount I know).

I currently have 20k+ in my current account - down to the fact I having very little outgoings - Contribute €100 a week to rent living at home, don't smoke, very rarely drink or go on a night out anymore.

I know the most obvious thing to do would be to increase the direct debit monthly savings instead of hoarding money in the current account but for instance if we were to apply for a mortgage tomorrow would the current account balance be classed as savings and would a bank even consider giving us a mortgage??

Duke of Url

pauldoo wrote: »

Would anyone know if voluntary payments into a company share scheme would count as part of the capacity to repay? Its effectively a savings scheme that could be stopped at any time

We are applying with BOI and they have been a disaster, after going on months, they say there could be issues on a capacity to repay, despite looking for well under the max mortgage for our salary and having about a 35% deposit (equity on the sale of the house is covers the 20% deposit)

Did you get approval in principle yet?

IvoryTower

Kav_Piero wrote: »

Would anyone be able to offer some advice please in relation to what is technically classed as "savings" by banks when applying for a mortgage?

Current situation at the moment is me and my partner have a combined salary of 80k and we have circa 35k locked into a mortgage savers account this has been built up over the last couple of years by saving a combined €400 a month via direct debit (Very low amount I know).

I currently have 20k+ in my current account - down to the fact I having very little outgoings - Contribute €100 a week to rent living at home, don't smoke, very rarely drink or go on a night out anymore.

I know the most obvious thing to do would be to increase the direct debit monthly savings instead of hoarding money in the current account but for instance if we were to apply for a mortgage tomorrow would the current account balance be classed as savings and would a bank even consider giving us a mortgage??

From my experience the 20k would count as savings in the sense it can be used towards deposit but only saving 400 is what they will take into account as your ability to pay.

Maybe someone else can confirm

pauldoo

Duke of Url wrote: »

Did you get approval in principle yet?

No, I was actually applying for the deposit exemption, which was delayed when covid hit. I don't particularly need the exemption, just didn't want to leave it too close with cash once we furnish the new house

random_banter

trinib wrote: »

Do you mind me asking which bank?
Got told over the phone from our bank 3 weeks ago we could get a LTV exemption from 20% to 10%, have just been getting the paperwork ready to lodge this week. Really hope it hasnt changed!

BOI. You?

We’ve decided to go ahead and seek AIP so that we will at least be in a position to hunt properly. All our other factors are in very good shape.

Best of luck and hope you get to keep your exemption

trinib

random_banter wrote: »

BOI. You?

We’ve decided to go ahead and seek AIP so that we will at least be in a position to hunt properly. All our other factors are in very good shape.

Best of luck and hope you get to keep your exemption

AIB. Thank you. Fingers crossed.

Deebles McBeebles

Anyone know when estate agents will be doing viewings on for sale properties again?

ladystardust

Deebles McBeebles wrote: »

Anyone know when estate agents will be doing viewings on for sale properties again?

Started today as far as I'm aware

Duke of Url

Can I ask how long did it take from going from AIP to drawing down a mortgage?

frw5

Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.

Duke of Url

frw5 wrote: »

Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.

Our Car is on PCP and we had to list it in our Application, The bank didnt seem to have a issue with it.

frw5

Duke of Url wrote: »

Our Car is on PCP and we had to list it in our Application, The bank didnt seem to have a issue with it.

Yeah i know it is normally not a big issue, but I am worried since only 3 months in between they might make an issue out of it?
How much difference was between you taking PCP and applying for a mortgage if you don't mind me asking? (months wise)

Creamy Goodness

There'll be no issue with it as long as it doesn't affect your ability to repay the mortgage according to their formulas, It will pop up on their credit checks. €280 a month isn't a whole heap considering some applicants are paying over €1000 in creche fees* and still able to get mortgages.


* In the before times.

ELM327

frw5 wrote: »

Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.

When I got my last mortgage a few years ago (2017) my total loans were ~800 per month.


Am given (full underwritten AIP) again now with outstanding loan of >1k per month.


It's the repayment capacity they need to see, not the loan total.

frw5

frw5 wrote: »

Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.

I don't think the timing makes any difference, all they are interested in is affordability.

frw5

Yeah I used the online calculator, everything up to 1000 no issues.

errlloyd

Kav_Piero wrote: »

Would anyone be able to offer some advice please in relation to what is technically classed as "savings" by banks when applying for a mortgage?

According to my broker pretty much any month to month surplus across your accounts would be counted, plus rent. They like it to be regular, but effectively if your current account is going up, you're in business.

The one exception is that banks don't count reduction in credit card debt as saving.

frw5

How is rent calculated there, in what regards?

With regard to evidence of savings, does anyone know if Irish banks would take UK bank statements as evidence of continuous regular saving or would we need to build from ground up since moving back?

awec

Kalico92 wrote: »

With regard to evidence of savings, does anyone know if Irish banks would take UK bank statements as evidence of continuous regular saving or would we need to build from ground up since moving back?

They'll take UK statements no problem but will also likely ask for a credit check to be done in the UK (experian or whatever) if you have a financial history there.

errlloyd

frw5 wrote: »

How is rent calculated there, in what regards?

It's just the repayability test.

Say you've gone for a 270k mortgage over 35 years. Repayments are gonna be 1,100 a month give or take.

They want to know you can afford that.

If you're saving 600pm and paying 700pm in rent then you've got 1,300pm so you can afford repayments.

WeeCuppaCha

I’m hoping some of you would give me a ‘what would you do if you were me’ opinion. I’m really not sure how to proceed.

Second time buyer, currently renting
Age: 45
Single applicant, 1 dependant.
Full time public servant
Basic salary €32000
Guaranteed allowances €3300
Overtime/unsocial hours €8000

Savings €60000

Current rent €550
Monthly savings €1500
No loans/credit card

I am awaiting an increase in basic salary, now due to me but the HSE is working at a snails pace so could be another 6 months before I see it. Basic salary would then be €36000, allowance the same but guaranteed overtime would increase accordingly. I am aware that some allowances/overtime will not be accepted in an application.

I want to buy a house. The market in my area is pretty stagnant since Covid, but I would expect to see an increase in stock in coming weeks/months.

Assuming the bank allow 3.5 of current salary and guaranteed allowances only, I would be eligible for a mortgage of €123,540.

If I wait for my increase to kick in, I would be allowed €137,550.

However, if I wait until this new base salary kicks in, I’m potentially decreasing the term of the mortgage, making it unaffordable in the banks’ eyes.

So, what would you do? Continue saving for another year, increasing savings by €18,000 and reducing term by another year? Also running the risk of these savings being swallowed up by rising house prices... Or, just go ahead now on lesser salary and budget?

frw5

errlloyd wrote: »

It's just the repayability test.

Say you've gone for a 270k mortgage over 35 years. Repayments are gonna be 1,100 a month give or take.

They want to know you can afford that.

If you're saving 600pm and paying 700pm in rent then you've got 1,300pm so you can afford repayments.

Ah yeah makes sense. Considering the situation they should simply take that as a plus without even checking because there is no chance rent is going to be lower than mortgage payment, so basically if you have a pulse that should cover it

Creamy Goodness

frw5 wrote: »

How is rent calculated there, in what regards?

If you're paying €1000 rent right now and up until your going to drawdown, they will take that into account into your repayment capability i.e. that €1000 can go towards paying part of/all of the mortgage amount.

errlloyd wrote: »

According to my broker pretty much any month to month surplus across your accounts would be counted, plus rent. They like it to be regular, but effectively if your current account is going up, you're in business.

The one exception is that banks don't count reduction in credit card debt as saving.

For AIB, savings were classed as any payment I could show going into a savings account/credit union at regular intervals and for the same monetary amount for at least 6 months.

I don't understand why credit card debt would be considered anything but debt? Certainly isn't any form of savings

awec

frw5 wrote: »

Ah yeah makes sense. Considering the situation they should simply take that as a plus without even checking because there is no chance rent is going to be lower than mortgage payment, so basically if you have a pulse that should cover it

Rent will be lower than the mortgage in a lot of cases, particularly if you're moving from a 1 or 2 bed apartment to a 3 or 4 bed house.

BrokenArrows

WeeCuppaCha wrote: »

I’m hoping some of you would give me a ‘what would you do if you were me’ opinion. I’m really not sure how to proceed.

Second time buyer, currently renting
Age: 45
Single applicant, 1 dependant.
Full time public servant
Basic salary €32000
Guaranteed allowances €3300
Overtime/unsocial hours €8000

Savings €60000

Current rent €550
Monthly savings €1500
No loans/credit card

I am awaiting an increase in basic salary, now due to me but the HSE is working at a snails pace so could be another 6 months before I see it. Basic salary would then be €36000, allowance the same but guaranteed overtime would increase accordingly. I am aware that some allowances/overtime will not be accepted in an application.

I want to buy a house. The market in my area is pretty stagnant since Covid, but I would expect to see an increase in stock in coming weeks/months.

Assuming the bank allow 3.5 of current salary and guaranteed allowances only, I would be eligible for a mortgage of €123,540.

If I wait for my increase to kick in, I would be allowed €137,550.

However, if I wait until this new base salary kicks in, I’m potentially decreasing the term of the mortgage, making it unaffordable in the banks’ eyes.

So, what would you do? Continue saving for another year, increasing savings by €18,000 and reducing term by another year? Also running the risk of these savings being swallowed up by rising house prices... Or, just go ahead now on lesser salary and budget?

Go ahead now, and if you find a property you like then it doesn't really matter.
If you are still looking by the time you get your salary increase then you can increase your budget.

errlloyd

Creamy Goodness wrote: »

I don't understand why credit card debt would be considered anything but debt? Certainly isn't any form of savings

My scenario was that I had CC debt of 3k and a direct debit of 600pm from my current account paying it off. My broker told me to cancel the direct debit, and just pay the minimum because they'd count that 600 towards repayability if it was sitting in my current account, but they wouldn't count it if it was paying off my CC.

Duke of Url

Creamy Goodness wrote: »

If you're paying €1000 rent right now and up until your going to drawdown, they will take that into account into your repayment capability i.e. that €1000 can go towards paying part of/all of the mortgage amount.



For AIB, savings were classed as any payment I could show going into a savings account/credit union at regular intervals and for the same monetary amount for at least 6 months.

I don't understand why credit card debt would be considered anything but debt? Certainly isn't any form of savings

Agreed. If you owe anything on a CC it is classified as borrowings.

CC borrowings = Debt if you have an outstanding CC Balance

They ask for CC Limit and CC Balance.

This is listed under Financial Commitments with BOI.

Markitron

This might sound like a stupid question but when they say that they need to see six months of solid savings, does that have to be the 6 months before you apply or drawdown? I am not planning to apply for anything until January, but I will have 6 months of solid savings in October. Would they care if I only saved half of the normal amount at Christmas for example?

wally79

Markitron wrote: »

This might sound like a stupid question but when they say that they need to see six months of solid savings, does that have to be the 6 months before you apply or drawdown? I am not planning to apply for anything until January, but I will have 6 months of solid savings in October. Would they care if I only saved half of the normal amount at Christmas for example?

I can’t back this up but I would say yes. They are looking to see if you can pay your mortgage each month. If it looks like you can’t afford Christmas without hitting your savings then I think it would be a flag.

I think it would be better to save a little less each month for mortgage and have a separate Christmas saving account which you add to each month

Jsmac67

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

awec

Markitron wrote: »

This might sound like a stupid question but when they say that they need to see six months of solid savings, does that have to be the 6 months before you apply or drawdown? I am not planning to apply for anything until January, but I will have 6 months of solid savings in October. Would they care if I only saved half of the normal amount at Christmas for example?

There is no hard and fast rule. Banks know that you are a person and not a robot, the thing they want to see is financial prudence. If you are saving a relatively low amount of your income each month then they'll be concerned if you have to dip into savings to fund purchases.

However, if you're saving a lot, and you save a bit less to spend a bit extra at christmas they won't care.

You could go out and spend 40 grand on a brand new car the day before you submit your mortgage application and they will not care once you can afford it.

awec

Jsmac67 wrote: »

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

Straightforward application, unless something changes significantly you'll have no issue getting approved for 350k.

mimimcmc

Jsmac67 wrote: »

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

Sounds ideal tbh

Markitron

wally79 wrote: »

I can’t back this up but I would say yes. They are looking to see if you can pay your mortgage each month. If it looks like you can’t afford Christmas without hitting your savings then I think it would be a flag.

I think it would be better to save a little less each month for mortgage and have a separate Christmas saving account which you add to each month

awec wrote: »

There is no hard and fast rule. Banks know that you are a person and not a robot, the thing they want to see is financial prudence. If you are saving a relatively low amount of your income each month then they'll be concerned if you have to dip into savings to fund purchases.

However, if you're saving a lot, and you save a bit less to spend a bit extra at christmas they won't care.

You could go out and spend 40 grand on a brand new car the day before you submit your mortgage application and they will not care once you can afford it.

Thanks, I am saving a fairly large amount each month, probably almost 2.5x what my mortgage would likely be and I have no outgoings so maybe I will be alright.

yourdeadwright

Jsmac67 wrote: »

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

Banks dream right there,

errlloyd

Jsmac67 wrote: »

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

If you can't get it none of us will....

JohnnyChimpo

Jsmac67 wrote: »

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

Some people will tell you "oh banks like to see evidence of previous small loans to show repayment capacity" but tbh I think that's always way overstated. As others said, if you don't get AIP straight off the bat then the banks are really going into lockdown

KilOit

Jsmac67 wrote: »

All,

Does this application seem reasonable?

Combined salary: 100k
Occupation: Teacher and public servant
Savings: 50k in credit union account. Saving roughly 3.5k per month combined
Amount to borrow: 350kish
Financial commitments: Nil, never had a loan or credit card either

Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

Pretty much our application back in 2018, had a bit more of a deposit but bank had no issue allowing for 4.5 salary if we needed it

Duke of Url

Are banks doing the Stress tests before or After Mortgage Approval in Principle or Both

Qwerty2018

I know it’s very hard to speculate, just wondering what my chances are.

Was planning on trying to buy a house next year valued at around 240,000.

I would need a mortgage of 210,000. I am a single applicant first time buyer. I am a teacher on a full time contract with a gross salary of 42,000.
Also have parents willing to act as guarantor on my mortgage.

Would I have any chance of getting a mortgage as I would need 5 times my salary?

Thanks

Dylan94

Qwerty2018 wrote: »

I know it’s very hard to speculate, just wondering what my chances are.

Was planning on trying to buy a house next year valued at around 240,000.

I would need a mortgage of 210,000. I am a single applicant first time buyer. I am a teacher on a full time contract with a gross salary of 42,000.
Also have parents willing to act as guarantor on my mortgage.

Would I have any chance of getting a mortgage as I would need 5 times my salary?

Thanks

Unfortunately, I would say zero. Generally speaking only those earning above €80,000 get more than 3.5 times their income. Even then its usually only about 4 times. Those on very high incomes with great savings and credit history might get 4.5 times their income. While there have been cases that someone got 5 times their income with BOI, its a 1 in a million case and would have to be the perfect high earning couple Unfortunately.

Shelga

Dylan94 wrote: »

Unfortunately, I would say zero. Generally speaking only those earning above €80,000 get more than 3.5 times their income. Even then its usually only about 4 times. Those on very high incomes with great savings and credit history might get 4.5 times their income. While there have been cases that someone got 5 times their income with BOI, its a 1 in a million case and would have to be the perfect high earning couple Unfortunately.

My friend got an exemption for 4.2 times her salary 2 years ago, and she was on less money at the time than I am now. I have recently been told by several brokers that I have no chance of an exemption. I have no idea how these things are decided, I thought that you didn't have to be a super high earner to get an exemption but at some point over the last 2 years the rules have changed.

I obviously don't think it's a good idea to borrow up to your eyeballs, but it's frustrating nonetheless to be treated differently to my friend for no reason that I can see.

Dylan94

Shelga wrote: »

My friend got an exemption for 4.2 times her salary 2 years ago, and she was on less money at the time than I am now. I have recently been told by several brokers that I have no chance of an exemption. I have no idea how these things are decided, I thought that you didn't have to be a super high earner to get an exemption but at some point over the last 2 years the rules have changed.

I obviously don't think it's a good idea to borrow up to your eyeballs, but it's frustrating nonetheless to be treated differently to my friend for no reason that I can see.

Yes it seems that the requirements for an exemption get stricter every few months. I think that most people are wanting an exemption these days and there are only so many to go around.

ladystardust

Qwerty2018 wrote: »

I know it’s very hard to speculate, just wondering what my chances are.

Was planning on trying to buy a house next year valued at around 240,000.

I would need a mortgage of 210,000. I am a single applicant first time buyer. I am a teacher on a full time contract with a gross salary of 42,000.
Also have parents willing to act as guarantor on my mortgage.

Would I have any chance of getting a mortgage as I would need 5 times my salary?

Thanks

With regards guarantors, I was informed that they no longer hold any water after the last crash. So many people had crazy loans propped up my guarantors who ALSO found themselves unable to pay.

lir6777

Qwerty2018 wrote: »

I know it’s very hard to speculate, just wondering what my chances are.

Was planning on trying to buy a house next year valued at around 240,000.

I would need a mortgage of 210,000. I am a single applicant first time buyer. I am a teacher on a full time contract with a gross salary of 42,000.
Also have parents willing to act as guarantor on my mortgage.

Would I have any chance of getting a mortgage as I would need 5 times my salary?

Thanks

I have also been pursuing an exemption as a single buyer and it is very difficult, but as others are saying, fairly varying. So I would say keep your expectations realistic for sure, it's not definitely going to happen, but give it a go- I have heard of people getting them without being on huge salaries or such so I figure it's worth a shot. Theyre not available right now but will be again at some point hopefully! Good luck

Markitron

lir6777 wrote: »

I have also been pursuing an exemption as a single buyer and it is very difficult, but as others are saying, fairly varying. So I would say keep your expectations realistic for sure, it's not definitely going to happen, but give it a go- I have heard of people getting them without being on huge salaries or such so I figure it's worth a shot. Theyre not available right now but will be again at some point hopefully! Good luck

I am a single applicant, I don't think I will need an exemption but I would still like to try for one. I have pretty much zero outgoings and commitments and am saving about 2.5x what my mortgage would be every month. Hopefully they take this into account

Bluefoam

Need some advice...

I put a deposit on a house in Feb 2019, completion at the time was to be July 2019.
House is still being built and in Feb 2020 I got a notice to be prepared for draw down.

Now in June, the house is still not finished, and no communication from the developer as to when that might be.... It is now 16 months and no significant communication from the developer whatsoever. I have had to make three separate mortgage applications in that time, including to the central bank for my exemption.

I am in a good financial position with a reasonable salary and almost 30% deposit. However, I am currently on the covid subsidy and a top up from my employer to 85% of my salary. My job is secure though and I have just been added to a life policy as a perk...

Yesterday I got an email from the mortgage broker stating that drawdown with require two pay slips, a guarantee from my employer that I am on full salary and that i am not on the covid subsidy. There is no mention of negotiation, or alternative arrangements...

Can anyone let me know if there is anything I can do, anyone I can contact or whether anyone in a similar circumstance has managed their way through?

I would consider setting aside a sum of money to guarantee mortgage payments, if the bank would accept it.

I have worked hard for the past 10 years to get this house and have literally given up the past two years to dedicate myself to completing this purchase.

Any advice or help would be appreciated.

antimatterx

Does anyone feel like they don't really know what they're doing? I'm just saving and hoping I can buy something in a few years.

I'm 24, I make 32K a year and I have €20K saved. I would like to buy an apartment in Dublin for around the ~200K range. Savings is going well, but I definitely need to move job.

ladystardust

Bluefoam wrote: »

Need some advice...

I put a deposit on a house in Feb 2019, completion at the time was to be July 2019.
House is still being built and in Feb 2020 I got a notice to be prepared for draw down.

Now in June, the house is still not finished, and no communication from the developer as to when that might be.... It is now 16 months and no significant communication from the developer whatsoever. I have had to make three separate mortgage applications in that time, including to the central bank for my exemption.

I am in a good financial position with a reasonable salary and almost 30% deposit. However, I am currently on the covid subsidy and a top up from my employer to 85% of my salary. My job is secure though and I have just been added to a life policy as a perk...

Yesterday I got an email from the mortgage broker stating that drawdown with require two pay slips, a guarantee from my employer that I am on full salary and that i am not on the covid subsidy. There is no mention of negotiation, or alternative arrangements...

Can anyone let me know if there is anything I can do, anyone I can contact or whether anyone in a similar circumstance has managed their way through?

I would consider setting aside a sum of money to guarantee mortgage payments, if the bank would accept it.

I have worked hard for the past 10 years to get this house and have literally given up the past two years to dedicate myself to completing this purchase.

Any advice or help would be appreciated.

I'm sorry to say, we were in same position in that we saved and worked hard for a decade. This was our time. We had significant savings left after purchase price with the intention of doing the house up to our desired specs. We offered this as a guarantee of mortgage repayments. We offered to pay mortgage plus interest up front for 2 years. We had people offer to br guarantors. All declined. Our LTV was about 50:50. In the end we were actually declined mortgage protection (genuinely medically nothing but insurance underwriters took no chances without consultant to sign off which u certainly wont get anytime soon..... thanks covid) So we lost the dream house, took our cash and are just now contracts signed on a much smaller, starter home. Not ideal. But that's what we had to do. I really hope it works out for you.