Give me a mortgage!

dahooligan

Right, I've tried to speak to many a mortgage company but they won't speak to me cos I'm only 21 and not in my job that long, BUT all I want to know is what criteria do I need to satisfy before I will be genuinely considered?

Basically I'm in a secure job, €30kp/a, I know that I may have to get 6 months to a year under my belt with said job but whats the usual.
I've also got a nest egg of arounk €40k which I'm told I can borrow against and which I'll be able to access in 2008 (garuanteed investment thing).

What else do I need to have? What mortgage should my present circumstance afford me? Like a €300k mortgage.. €280k?? I really dont have a clue and its becoming quite annoying at this stage!

Cheers Big Ears!:D

jhegarty

dahooligan wrote:

Right, I've tried to speak to many a mortgage company but they won't speak to me cos I'm only 21 and not in my job that long, BUT all I want to know is what criteria do I need to satisfy before I will be genuinely considered?

Basically I'm in a secure job, €30kp/a, I know that I may have to get 6 months to a year under my belt with said job but whats the usual.
I've also got a nest egg of arounk €40k which I'm told I can borrow against and which I'll be able to access in 2008 (garuanteed investment thing).

What else do I need to have? What mortgage should my present circumstance afford me? Like a €300k mortgage.. €280k?? I really dont have a clue and its becoming quite annoying at this stage!

Cheers Big Ears!:D

I don't see that €40k been any good to you , its too far off for the bank to rely on it...

without an 8% deposit you will need to be working for 3 years for most 100% morgages....

now, the problem... I checked with BOI and on one income of 30k with no loans you will only get 135000.... not much use really...a broker should be able to get you more (if you have a deposit), but you would need another of income of around €25k to €30k to get up to the sort of money you want..

LegacyUser

Yeah, jhegarty is right. At the very least, you need a deposit.
With 30k I would imagine you would have great difficulty getting that kind of money from the bank. Also, 30k and that sort of a mortgage, what would you live on. Seriously .. your talking about only having 700 euro left a month to live on .. do you have a car loan, car insurance to pay? Electricity etc
I don't think you would manage it, even if you rented a room. A house for 280k would be a fair way out of Dublin .. renting a room would still only bring your mortgage down to @ 900. I wouldn't recommend it.

Then take solictors fees, survey, moving in costs etc into consideration.
Have you any good friends you would consider buying with, maybe a family member. In a few years when your salary is a bit higher you could buy it back off them.

MorningStar

I have to agree you are talking serious money but there is little to say you could afford it and have enough stability to pay it. Age has little to do with it but your profession might hlep you if you are a doctor or lawyer.
If you haven't even worked 6 months in your job you really should wait at least a year.

Dellgirl

Could your parents go gaurentor onit? If I were you Id buy with a mate and still be able to have a life. But I really dont think any bank will look at you now. In 3 years time if you keep your nose clean they will be falling over themselves to throw money at you.

joejoem

In general you can borrow up to 5 times your salary, sometimes up to 8 times on your own depending on job security etc. You will need to be working 6 months minimum, if your parents could go garentor you could borrow more but to get the finance you are after you will need a deposit of 8% and a parent or gaurdian as garentor.

You could get finance like this but you would have to proove the rental prospects of the property (ie that you rent out three rooms and live in one) so that you can afford the repayments. On a normal interest rate like 3.1% your repayments over 35 years would be around 1400 euro a month and thats not counting all your ESB, heating, furniture, appliances, painting, decorating yada yada yada.

All being said it is great to get on the property ladder while its going up!

copacetic

joejoem wrote:

In general you can borrow up to 5 times your salary, sometimes up to 8 times on your own depending on job security etc. You will need to be working 6 months minimum, if your parents could go garentor you could borrow more but to get the finance you are after you will need a deposit of 8% and a parent or gaurdian as garentor.

You could get finance like this but you would have to proove the rental prospects of the property (ie that you rent out three rooms and live in one) so that you can afford the repayments. On a normal interest rate like 3.1% your repayments over 35 years would be around 1400 euro a month and thats not counting all your ESB, heating, furniture, appliances, painting, decorating yada yada yada.

All being said it is great to get on the property ladder while its going up!

wouldn't say this was 'in general' all the banks/brokers I spoke to were cracking down, it was 3 time salary for < 60k and 5 times salary for more than 60k. never heard of anyone getting 8 times salary..

at 3.1% the repayments on 300k are a fair bit less, more like 1127ish! minus relief but plus all the other things you mention above..

Beruthiel

the IIB will give you 4 times your salary, which in your case is 120k.
are you living in dublin?
If you are in a job for 6 months and earn less than 32k a year, the dublin co. co. is an option, you can get a shared ownership mortgage of up to 230k from them.
It's how I started out and would recommended it to anyone as all you need is a deposit is €1,300

The Recliner

dahooligan wrote:

Right, I've tried to speak to many a mortgage company but they won't speak to me cos I'm only 21 and not in my job that long, BUT all I want to know is what criteria do I need to satisfy before I will be genuinely considered?

Basically I'm in a secure job, €30kp/a, I know that I may have to get 6 months to a year under my belt with said job but whats the usual.
I've also got a nest egg of arounk €40k which I'm told I can borrow against and which I'll be able to access in 2008 (garuanteed investment thing).

What else do I need to have? What mortgage should my present circumstance afford me? Like a €300k mortgage.. €280k?? I really dont have a clue and its becoming quite annoying at this stage!

Cheers Big Ears!:D

Not wanting to offend but in another thread you are talking about being late with rent more than once

What makes you think you will be able to handle mortgage repayments which in all probability will be higher then your current rent

The bank will not be as accomodating as your landlord when it comes to late peyment

joejoem

daveym wrote:

wouldn't say this was 'in general' all the banks/brokers I spoke to were cracking down, it was 3 time salary for < 60k and 5 times salary for more than 60k. never heard of anyone getting 8 times salary..

I got 8 times my salary

5 times your salary is still very common I dont know who you had spoken to but I would advise you talk to some other brokers. When speaking to your broker ask what banks they are licenced with, they might be telling you the rules of "their" bank and not the others.

dahooligan

The Recliner wrote:

Not wanting to offend but in another thread you are talking about being late with rent more than once

What makes you think you will be able to handle mortgage repayments which in all probability will be higher then your current rent

The bank will not be as accomodating as your landlord when it comes to late peyment

Thank you for pointing out the obvious there good sir, but as I said I'm not in my 'proper job' long and had initial teething problems with payroll etc - hence late rent. All I'm looking for is helpful information at this point. I'm not gonna be all head in the clouds about it and expect to get any sort of a mortgage for at least a year or two.

Thanks for all the info so far guys, financial institutions are obviously playin it close to their chests as regards what you're gonna be allowed etc. Feckers!:rolleyes:

audge

The Recliner wrote:

Not wanting to offend but in another thread you are talking about being late with rent more than once

What makes you think you will be able to handle mortgage repayments which in all probability will be higher then your current rent

The bank will not be as accomodating as your landlord when it comes to late peyment

Ha ha, got rapid dahooligan, the posters are very observant!!!

copacetic

joejoem wrote:

I got 8 times my salary

5 times your salary is still very common I dont know who you had spoken to but I would advise you talk to some other brokers. When speaking to your broker ask what banks they are licenced with, they might be telling you the rules of "their" bank and not the others.

did you get yours this year? i was in ulster, ebs, aib + boi, and 2 different brokers went with rea in the end who are independent and aib, did get more than 92% but no budging on the 5 times salary, they all said 5 was the max and had to be at 60 to get this, similar story with 3 other people I know who have bought this year.
tbh it's a struggle anyway, at 8 times are you not totally smashed the whole time?

joejoem

daveym wrote:

did you get yours this year? i was in ulster, ebs, aib + boi, and 2 different brokers went with rea in the end who are independent and aib, did get more than 92% but no budging on the 5 times salary, they all said 5 was the max and had to be at 60 to get this, similar story with 3 other people I know who have bought this year.
tbh it's a struggle anyway, at 8 times are you not totally smashed the whole time?

I drew down last Friday.

I went through AIB (through a broker) and got the first three months no repayments, 2.75% for the first year and then 3.1% there after which I can change at anytime. I think this was down to my broker, he really hammered this out for me.

Yeah Im smashed at the moment but I intend on renting out two rooms which should knock a nice amount off my mortgage. - for this size loan I had to show that there was a rental possibility.

LegacyUser

What!! 8 times your salary! This guy is on 30k a year! Be sensible. How do you expect to pay a 300K mortgage on a salary like that.

Teething problems with your job or not - would you be ringing up your bank saying you had "teething problems with your job" too?? Like was said before .. you wouldn't get away with that with a mortgage.

Besides, you wouldn't be able for paying that kind of a mortgage on that salary!!!!

Another reason why the banks might not bend to help you is becuase you don't have a history of saving. If they can see you are responsible with money then they will help. By that I mean .. having your deposit in your bank account and them being able to see how you saved it.

i.e "Wow, he saved 400 euros a month for 5 years to get his deposit, and he was deligent about it".

I saved for 6 years to get my deposit together .. 6 years!! In the end, the bank I saved with gave me my mortgage and they may have stretched a little over 5 times my salary .. but only becuase they could see how I was with money.

threebeards

A lot of lenders calculate for affordability on the basis of net monthly income. On a salary of €30K you're going to have a net monthly income of approx €2K per month. In most cases you'll be allowed 35% of that to go towards a mortgage or any other loan repayment(s). Depending on the rate and the term you choose, that will determine how much you can borrow. For example, using a rate of 3.3% and a term of 30 years, you would be in a position to borrow about €160K. If you decided to borrow over 35 years, that amount would be increased to about €173K.

In any case, those calculations would be based on 92% borrowings. The €40,000 is of little use to you at the minute unfortunately. With the 100% mortgage products, there is very strict criteria that must be adhered to i.e. most lenders won't allow you to purchase a 1 be apt; you must have completed your probationary period and in a lot of cases you have to have been in the same employment for a minimum of 3 years.

Good luck with it;)

Forgot to say if you have any personal loans, that'll come off what will be allowable towards a mortgage repayment i.e. if you have a car loan of €200 pm, then all that would be allowable towards a mortgage would be €500 pm based on a net monthly income of €2K

copacetic

joejoem wrote:

I drew down last Friday.

I went through AIB (through a broker) and got the first three months no repayments, 2.75% for the first year and then 3.1% there after which I can change at anytime. I think this was down to my broker, he really hammered this out for me.

Yeah Im smashed at the moment but I intend on renting out two rooms which should knock a nice amount off my mortgage. - for this size loan I had to show that there was a rental possibility.

that was a good deal! i though I was doing well to get more than 95% so was happy enough, wouldn't be able to afford to pay back 8 times anyway so just as well they didn't offer it..

luckat

Did you try the TSB? They were always very decent in the old days, though they may have changed since Permanent took them over.

Or have you thought of doing it another way?

Friend of mine used a small inheritance to buy a ruined and long disused cottage in fairly central Dublin, and knocked it down and built his own place.

It took him four years - and he was working as a bicycle courier all the time - but he did it. He had to borrow, but a lot less than for a built house, and he now has a really nice house that's everything he ever wanted.

dahooligan

bubby wrote:

What!! 8 times your salary! This guy is on 30k a year! Be sensible. How do you expect to pay a 300K mortgage on a salary like that.

Teething problems with your job or not - would you be ringing up your bank saying you had "teething problems with your job" too?? Like was said before .. you wouldn't get away with that with a mortgage.

Besides, you wouldn't be able for paying that kind of a mortgage on that salary!!!!

.

Again may I clear up any misunderstanding as to what I'm asking here... I'm not looking for a 300,000 mortgage - I'm asking what I'd need to be in a position to even enquire about it. As for my earnings, it'd obviously be going up in the foreseeable future, but I'm not in any rush. I deffo think the history of saving would help, but if I've proof of rent for a number of years when I finally do pluck up enough courage to visit the dreaded mortgage broker, would that help? I'm not looking to get the piss taken out of me here and maybe I should have more carefully worded my initial post - and I definitely shouldn't have posted 2 threads on the same day! They are 2 separate matters though..

jhegarty

dahooligan wrote:

Again may I clear up any misunderstanding as to what I'm asking here... I'm not looking for a 300,000 mortgage - I'm asking what I'd need to be in a position to even enquire about it. As for my earnings, it'd obviously be going up in the foreseeable future, but I'm not in any rush. I deffo think the history of saving would help, but if I've proof of rent for a number of years when I finally do pluck up enough courage to visit the dreaded mortgage broker, would that help? I'm not looking to get the piss taken out of me here and maybe I should have more carefully worded my initial post - and I definitely shouldn't have posted 2 threads on the same day! They are 2 separate matters though..

they will talk to you at any stage...

LegacyUser

dahooligan wrote:

I'm not looking to get the piss taken out of me here and maybe I should have more carefully worded my initial post

I know your not! I'm just giving you advice.
The figures you gave above .. I'm glad your not really considering borrowing that amount on 30k. :0

The Recliner

dahooligan wrote:

Again may I clear up any misunderstanding as to what I'm asking here... I'm not looking for a 300,000 mortgage - I'm asking what I'd need to be in a position to even enquire about it. As for my earnings, it'd obviously be going up in the foreseeable future, but I'm not in any rush. I deffo think the history of saving would help, but if I've proof of rent for a number of years when I finally do pluck up enough courage to visit the dreaded mortgage broker, would that help? I'm not looking to get the piss taken out of me here and maybe I should have more carefully worded my initial post - and I definitely shouldn't have posted 2 threads on the same day! They are 2 separate matters though..

Apologies if this refers to me.

I wasn't taking the piss and I am sure you are responsible with your money and all and like you said you had circumstances relating to your late rent. I was just trying to point out that you might be jumping the gun a bit in looking for a mortgage given your current circumstances.

I may not have worded it very well and for this I apologise and you have pointed out since that you are not looking to take out the mortgage any time soon and in that case your rental difficulties are not relevant so sorry for bringing it up.

It took me several years of working before I was on a salary of your level and a couple more before I was in a position to buy a place and even then on a salary of €34,000ish €175,000 was the most the bank would give me, and I work for the feckers. Anyway I managed to buy myself a little one bed shoebox in town that will do for now and in a couple of years I hope to buy a decent sized two bed apt in town and rent out/borrow against the shoebox

So that might be another option if you were in a hurry to buy a place, set your sights a little lower for a few years and then trade up after that when a larger mortgage is more affordable

MorningStar

dahooligan wrote:

Again may I clear up any misunderstanding as to what I'm asking here... I'm not looking for a 300,000 mortgage - I'm asking what I'd need to be in a position to even enquire about it. As for my earnings, it'd obviously be going up in the foreseeable future, but I'm not in any rush. I deffo think the history of saving would help, but if I've proof of rent for a number of years when I finally do pluck up enough courage to visit the dreaded mortgage broker, would that help? I'm not looking to get the piss taken out of me here and maybe I should have more carefully worded my initial post - and I definitely shouldn't have posted 2 threads on the same day! They are 2 separate matters though..

First off you pay your landlord on time!!!
If you are in no rush to figure out the money don't bother. Working towards that money doesn't make any sense as by the time you do it it might not be even close to the value of desired property.
THe issues are not seperate as you even mentioned paying rent as a possible aid to your application. If you are going to use that make sure you jhave a registered landlord and that you are nice to him. Ignore property for a while you aren't close to the league yet most mortages require two years of employment. If you really want to find out just go to a broker and also look at the shared ownership scheme.

Byrneedel

Beruthiel wrote:

the IIB will give you 4 times your salary, which in your case is 120k.
are you living in dublin?
If you are in a job for 6 months and earn less than 32k a year, the dublin co. co. is an option, you can get a shared ownership mortgage of up to 230k from them.
It's how I started out and would recommended it to anyone as all you need is a deposit is €1,300

anybody know where you would contact to enquire about this as it sound like my only option for years to come

TheBigLebowski

Byrneedel wrote:

anybody know where you would contact to enquire about this as it sound like my only option for years to come

Ever heard of Google?

Go to it and you might find this....

http://www.sdublincoco.ie/sdcc/departments/housing/forms//pdf/SOSApplication.01092005.pdf

Irish-Lass

shared ownership is good if you want to get a start but limits you as to where you can buy cause they only allow you borrow a certain amount. The other downside is that when it was frist brought out after a year you could change it to a full mortgage now you have to wait 3 years. Basically that means that you end up owing them more on the rental part of the property then you borrowed because the rental value goes up each year. Just something to think about before you go down that road

dahooligan

Thank you to The Recliner, I am just on a fact finding mission and all real life advice is great and will be taken on board.

copacetic

dahooligan wrote:

Thank you to The Recliner, I am just on a fact finding mission and all real life advice is great and will be taken on board.

when I originally went looking the more cautious banks were not at all impressed by 6/7 years of renting, they were looking for long term savings, eg if you are paying rent of 500 and saving 500 every month over a few years it indicates to them you could pay of a mortgage of 1000/month (obviously simplified here but it does help to have any kind of saving history at all...)

The Recliner

daveym wrote:

when I originally went looking the more cautious banks were not at all impressed by 6/7 years of renting, they were looking for long term savings, eg if you are paying rent of 500 and saving 500 every month over a few years it indicates to them you could pay of a mortgage of 1000/month (obviously simplified here but it does help to have any kind of saving history at all...)

I would agree with the above

Rent on its own wont be enough to convince the bank if you are looking for a decent amount.

Regular savings (have a direct debit to a savings account, investment policy, SSIA etc) will be looked upon more favourably than and in combination with rent. Keep credit card debt as low as possible and minimise any existing loans you have before you talk to the bank.

This will ensure you are looked upon favourably and get the highest amount possible.

old_lady

dahooligan mentioned he has an investment of 40k being released to him in 2008, how will this effect his mortgage porespects? Just curious as I have some money coming to me in about 3 years.

threebeards

old_lady wrote:

dahooligan mentioned he has an investment of 40k being released to him in 2008, how will this effect his mortgage porespects? Just curious as I have some money coming to me in about 3 years.

It's not much good to him now but it'll be a strong deposit when it matures