Mortgage Deposit

BlackEdelweiss

We had a bid accepted on a property and we paid a €5,000 deposit to the real estate agent. We had approval in principle and were in the process of getting full mortgage approval which looked fairly straight forward. We have a deposit, decent income, not a crazy house price or mortgage request.

Yesterday I got told the bank had refused our application as I used to bank with Ulster Bank and had to change bank accounts as they are closing. I switched bank in October when I started a new job and began the process of switching all my direct debits etc from one bank to the other. There were about 20 in total and it took a while and unfortunately I forgot to finish the job and a few remained and I went into unagreed overdraft in the ulster bank even though it was not my main bank at the time.

Anyway, we got refused the mortgage, totally my fault. My main concern is can I get my €5,000 deposit back? This would be a significant blow to us if not. I dont want to ask the real estate agent just yet as we have an application under review with another bank so just on the of chance they do not refuse us I dont want to ruin the whole thing by letting the house go but I dont want to drag it out in case there is a time limit either. We paid the deposit about 2 weeks ago if that is of any relevance.

ClaudeVercetti

Is the property a new build? €5,000 deposit is the standard booking deposit there. Until you've signed a contract you can still get a refund on the deposit. Similar happened to us except the builders messed up instead of us but got it back straight away as it was non-binding.

BlackEdelweiss

No, not a new build. 4 bed semi in an estate.

LunaLoo

Until contracts are signed estate agent holding deposit is 100% fully refundable. You won't be able to sign contracts until you have full loan offer from bank so don't say anything yet to estate agent.

awec

I don't see why you wouldn't get it back.

Browney7

https://www.boards.ie/discussion/2058244391/mortgage-deposit

Are you applying directly to the bank or are you using a broker? I'd talk to a mortgage broker if I was you

BlackEdelweiss

https://www.boards.ie/discussion/comment/119013315#Comment_119013315

The refusal was through a broker. I'm waiting to hear back from a bank.

BlackEdelweiss

https://www.boards.ie/discussion/comment/119013289#Comment_119013289

In a verbal conversation, the real estate agent said the deposit was refundable based on the findings of an engineers report. He did not mention any other reason it could or could not be returned.

Xidu

You should check with your solicitor not here. Seriously

BlackEdelweiss

https://www.boards.ie/discussion/comment/119014422#Comment_119014422

Replace the word 'solicitor' in your comment with the relevant person/department/entity in any other post on here and you remove about 95% of the use of boards. I'm not going to make any drastic decisions based on comments received here, just looking to see if anyone has been in a similar situation and can give a bit of advice.

Xidu

What I mean is you can get different experience sharing here but at the end of u wanna the deposit back, u have to go through your solicitor. They aren’t going to hand back the deposit just becoz u tell them u didn’t get the mortgage approved. That’s my experience. Everything house related is soooooooo complicated

Q&A

Estate agent works for the seller, ignore them. For an existing property your money is fully refundable up to signing a contract. You don't need a reason you can simply change your mind. All you've done is transfer money to the estate agent. At this stage it's more a gentleman's agreement. No sane estate agent would refuse to return a deposit at this stage. It would be bad for business and probably illegal. My experience for what it's worth was I sent an email saying I was withdrawing and the funds were returned a couple of days later. They fit on with finding someone else to buy they place.

Yours would not be the first purchase to fall through because of difficulty getting a mortgage. Getting your money back would be slightly harder if contracts are signed (but they're not). If things progress your solicitor should include a clause that the purchase is subject to mortgage approval. That way you and your deposit is safe if the mortgage difficulties continue.

spaceHopper

You deposit is good faith gesture to show you are serious, it is refundable. Not your biggest problem, get mortgage sorted, tell which ever bank it is that if they refuse you over a mistake because of Ulster bank leaving the market they are being unreasonable and you will be making a complaint to the financial regulator. Do you want to lose the house or have you changed your mind? You know rates are about to go up. Sure prices might go down to but do you want to gamble that for a "not a crazy house price or mortgage request"