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Saving/Applying for a mortgage 2020-22 Edition

Graham

Continued from here: https://www.boards.ie/vbulletin/showthread.php?t=2057501206

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Creamy Goodness

GimmeAHouse wrote: »

Put down a deposit of say €60k (20% of the property value), then get a €199k mortgage and use the remaining €40k-€50k in savings also to finance buying the property after the mortgage is drawn down?

Please tell me if any of the above sounds unrealistic.

Thanks.

A mortgage is tied to the house, if the figures don't add up before drawdown they will not proceed.

You give the money to your solicitor deposit first, then before drawdown you give the balance, the bank transfer your mortgage amount to your solicitor and they proceed with the sale.

GimmeAHouse

Hi all,

I'm thinking of buying a house soon. I know almost nothing about the process.

Stats:

First-time buyer

29 y/o, single and no dependents - so applying alone.

No loans currently.

€110k available for a deposit.

Guaranteed gross annual income: €57k.

Also, up to 10% bonus on top of that, but that's performance-based and I don't think fall under "guaranteed income".

I'm currently living in Dublin, but I wouldn't mind moving outside the county. My job seems to be getting on board with the whole work-from-home arrangement and said that they might permit it as a permanent arrangement after the pandemic. So I don't mind looking at a country house (internet quality permitting).

Mortgage calculators online say that with the x3.5 rule I could possibly be approved for a mortgage of ~€199k, so with my deposit of €110k, I could possible get a house in the ~€300k-€309k range. Though of course, I'd want to set €10k aside for legal fees, stamp duty and whatnot, so €289k-€299k I think might be more realistic.

My biggest nightmare is putting down a big deposit of €100k and then losing it all at once because of some mishap. So, does anyone know if the following scenario is possible if I wanted to say buy a house worth €300k:

Put down a deposit of say €60k (20% of the property value), then get a €199k mortgage and use the remaining €40k-€50k in savings also to finance buying the property after the mortgage is drawn down?

Please tell me if any of the above sounds unrealistic.

Thanks.

fin12

GarIT wrote: »

I know a German guy who says he got a mortgate for his house from a bank in Germany.

Ya but is that because he is a German citizen? The house is in Ireland?

GarIT

fin12 wrote: »

I think it’s unfair, we are in the EU, what can’t u get a loan from Eu banks to buy a house in Ireland?

I know a German guy who says he got a mortgate for his house from a bank in Germany.

Creamy Goodness

McGrath5 wrote: »

Quick question - I’ve paid a booking deposit for a new build, at what stage should I arrange snagging, before or after contracts are signed?

You only do snagging when the builder has declared the house as complete, you will have contracts signed well before this point.

Snagging is done roughly 7-10 days before drawdown and receiving the keys.

McGrath5

Quick question - I’ve paid a booking deposit for a new build, at what stage should I arrange snagging, before or after contracts are signed?

Creamy Goodness

shouldn't be an issue especially with investments. with regards to coin base and crypto's I'm sure people have gotten mortgage's with much worse gambling.

[Deleted User]

TheMilkyPirate wrote: »

Will having small amounts of money going to DeGiro and Coinbase matter to an application? I'm talking less than 200e.

You will probably have to include any investments on application.

TheMilkyPirate

Will having small amounts of money going to DeGiro and Coinbase matter to an application? I'm talking less than 200e.

yoshiktk

Long story short, after many years we can finally try and buy our first house. Problem which we didnt consider till now is age of my wife. At our first meeting with AIB mortgage advisor we were hit with information that we could only take the mortgage for 19 years. We will try to meet with finance advisor in incoming few weeks but did anyone had luck with any of banks to push the mortgage over the 70age?

Graham

Geuze wrote: »

You must repay the mortgage before you can sell the mortgaged property.

Or settle the outstanding amount of the mortgage from the proceeds of the sale.

G_R

valarmorghulis wrote: »

Hi, does anyone have any useful advice on selling an apt before you have paid off your mortgage. I’m 33,renting for 14 years,100k wasted on rent,plan to remain in dublin for 7-10 years ,would aim to pay as much as possible but know i won’t pay all the mortgage off,but at least will have equity built up and can downsize to the country,value is likely to hold up within the m50,what are the main risks ,thank you

The apartment is the bank's security - you can't sell it while the mortgage is outstanding.

You could sell the property and use the funds from the sale to clear the mortgage. Alternatively, keep the mortgage and rent out the property, and use the rent to cover the mortgage. You will have a tax bill to consider if you go down this route though.

Geuze

You must repay the mortgage before you can sell the mortgaged property.

valarmorghulis

Hi, does anyone have any useful advice on selling an apt before you have paid off your mortgage. I’m 33,renting for 14 years,100k wasted on rent,plan to remain in dublin for 7-10 years ,would aim to pay as much as possible but know i won’t pay all the mortgage off,but at least will have equity built up and can downsize to the country,value is likely to hold up within the m50,what are the main risks ,thank you

klose

The Phantom Jipper wrote: »

Happy to be corrected as I'm a relative novice in this area but I think you may have a couple of other options. Some banks (Ulster is one) that allow you to overpay on a fixed, up to 10% of the amount borrowed in Ulster's case.

Some banks also offer a split mortgage, where you have some of the loan amount fixed and some on variable, so you can overpay the variable part to your heart's content.

Can also take a deffered start on a mortgage, AIB offered us (we did not sign up for it) one for the first 6 months, obviously means you're paying more on your remaining payments after that but if the the OP is stuck for the first 6-10 months then this is probably the easiest and quickest way of navigating that.

The Phantom Jipper

[Deleted User] wrote: »

I know this isn't black and white, and people will have varying opinions, but I want a mortgage on a house. Getting the mortgage over the line will leave things very tight for me (on paper I look okay, but in real life i'll be financially knackered for about 6-10 months).

I was offered the mortgage over 35 years, but it's for a small enough amount of money and ideally I'd like to have it paid down within 10 years, maybe less if my work stays good to me. However, I'll still opt for the 35 year period, so my required repayments are lower, incase i run into any difficulty.

So roughly speaking, a year after drawdown I should be on my feet properly and back up to speed on all my bills and repayments and able to save. If you were me, would you...

A. Get a short term (say 3 years) fixed rate at 3% that you're not allowed to overpay, and meet the required payments each month for 3 years, whilst trying to build up a lump-sum payment in the background that you can hit the mortgage with after the 3 year fixed rate ends (and then repeat again for another 3 years).

or

B. Get a variable rate mortgage, pay a higher monthly payment at 4.5%, pay the minimum for a year and then, once on your feet, start knocking into it with every spare penny you can, on a month-by-month basis?

I don't know if it's really just much of a muchness or if there's any real substantial difference at all, that I'm overlooking.

Happy to be corrected as I'm a relative novice in this area but I think you may have a couple of other options. Some banks (Ulster is one) that allow you to overpay on a fixed, up to 10% of the amount borrowed in Ulster's case.

Some banks also offer a split mortgage, where you have some of the loan amount fixed and some on variable, so you can overpay the variable part to your heart's content.

Creamy Goodness

fin12 wrote: »

I think it’s unfair, we are in the EU, what can’t u get a loan from Eu banks to buy a house in Ireland?

Not sure if it’s possible but even if it was possible for an EU bank to give you a mortgage it’s not attractive for them. It’s a risky loan for them if you decide to stop paying them back.

fin12

I think it’s unfair, we are in the EU, what can’t u get a loan from Eu banks to buy a house in Ireland?

ongarite

highgiant1985 wrote: »

Irish mortgage rates are on average at least 1% higher than the similar EU average... so there is plenty of room for rate cuts still..

example: https://www.irishexaminer.com/news/arid-40206500.html

True, but we don't have policies here for mortgages in arrears like they have in EU. Its very very difficult to lose your home here even if you stop paying your mortgage for years.
The extra 1% we pay here is a margin on these impaired loans.

If the Irish market was so tempting to non-Irish banks with higher than EU interest rates then we would have lots of competition for your business.
Instead we have had gradual reduction in non-state supported banks operating here in last 10 years with Ulster Bank the latest casualty.

highgiant1985

ongarite wrote: »

Find this hard to believe.
Rates can't go much lower here.

KBC fixed rate mortgage for LTV<60% which is low risk loan from bank point of view has increased from 2.5 to 2.7% in recent weeks.

Irish mortgage rates are on average at least 1% higher than the similar EU average... so there is plenty of room for rate cuts still..

example: https://www.irishexaminer.com/news/arid-40206500.html

kalych

[Deleted User] wrote: »

I know this isn't black and white, and people will have varying opinions, but I want a mortgage on a house. Getting the mortgage over the line will leave things very tight for me (on paper I look okay, but in real life i'll be financially knackered for about 6-10 months).

I was offered the mortgage over 35 years, but it's for a small enough amount of money and ideally I'd like to have it paid down within 10 years, maybe less if my work stays good to me. However, I'll still opt for the 35 year period, so my required repayments are lower, incase i run into any difficulty.

So roughly speaking, a year after drawdown I should be on my feet properly and back up to speed on all my bills and repayments and able to save. If you were me, would you...

A. Get a short term (say 3 years) fixed rate at 3% that you're not allowed to overpay, and meet the required payments each month for 3 years, whilst trying to build up a lump-sum payment in the background that you can hit the mortgage with after the 3 year fixed rate ends (and then repeat again for another 3 years).

or

B. Get a variable rate mortgage, pay a higher monthly payment at 4.5%, pay the minimum for a year and then, once on your feet, start knocking into it with every spare penny you can, on a month-by-month basis?

I don't know if it's really just much of a muchness or if there's any real substantial difference at all, that I'm overlooking.

If you go to a broker he should be able to do both sets of maths for you with exact figures per month in excel so that you can play around with to stress test different scenarios.

ongarite

DubLad69 wrote: »

I've met with mortgage advisors from both BOI and EBS this week, and both of them insisted that mortgage rates would be dropping in the coming months, so I would be mad to go for anything more than a 1 year fixed rate.

Find this hard to believe.
Rates can't go much lower here.

KBC fixed rate mortgage for LTV<60% which is low risk loan from bank point of view has increased from 2.5 to 2.7% in recent weeks.

[Deleted User]

I know this isn't black and white, and people will have varying opinions, but I want a mortgage on a house. Getting the mortgage over the line will leave things very tight for me (on paper I look okay, but in real life i'll be financially knackered for about 6-10 months).

I was offered the mortgage over 35 years, but it's for a small enough amount of money and ideally I'd like to have it paid down within 10 years, maybe less if my work stays good to me. However, I'll still opt for the 35 year period, so my required repayments are lower, incase i run into any difficulty.

So roughly speaking, a year after drawdown I should be on my feet properly and back up to speed on all my bills and repayments and able to save. If you were me, would you...

A. Get a short term (say 3 years) fixed rate at 3% that you're not allowed to overpay, and meet the required payments each month for 3 years, whilst trying to build up a lump-sum payment in the background that you can hit the mortgage with after the 3 year fixed rate ends (and then repeat again for another 3 years).

or

B. Get a variable rate mortgage, pay a higher monthly payment at 4.5%, pay the minimum for a year and then, once on your feet, start knocking into it with every spare penny you can, on a month-by-month basis?

I don't know if it's really just much of a muchness or if there's any real substantial difference at all, that I'm overlooking.

DubLad69

I've met with mortgage advisors from both BOI and EBS this week, and both of them insisted that mortgage rates would be dropping in the coming months, so I would be mad to go for anything more than a 1 year fixed rate.

Pete123456

What kind of lead times are people seeing for appliances? Do you have to pay upfront?

michael jay

The_Conductor wrote: »

Certainly- however, as it will be viewed that the person taking out the mortgage only has a share in the property (a half share) their ability to mortgage their share in the property may be reduced by a commensurate percentage- aka your ability to get a mortgage might be half what it would otherwise be (wholly aside from income multiples etc).

Its messy- but it is possible.

cheers , ya it was messy, cant even give a contribution to the amount without the banks wanting it as joint mortgage

[Deleted User]

august2016 wrote: »

Looking to apply for a mortgage this year, the original plan was to apply last year but I moved jobs which put a halt on it as I wanted to wait to apply when I was 6 months + in my current job.
My question is do I need anything from my employer to say they're keeping me on or my job is safe after I've been there 6 months? Or is the fact that I'm in the job longer than 6 months enough?
The reason I ask is my probation in work is actually 11 months which would mean another 5 months of waiting before applying!

Your employer needs to fill in a salary certificate, as part of that they ask if your on probation. I'm due to finish my probation soon so what I did was start the application process about two months before. Can get approval in principle etc so you'd be in a position to buy as soon as probation is completed.

august2016

Looking to apply for a mortgage this year, the original plan was to apply last year but I moved jobs which put a halt on it as I wanted to wait to apply when I was 6 months + in my current job.
My question is do I need anything from my employer to say they're keeping me on or my job is safe after I've been there 6 months? Or is the fact that I'm in the job longer than 6 months enough?
The reason I ask is my probation in work is actually 11 months which would mean another 5 months of waiting before applying!

pooch90

C575 wrote: »

ICS offers two points above your payscale for public servants. https://www.icsmortgages.ie/

As do Finance Ireland.
I am a public sector worker and applied by myself as my husband is raising the kids. Both FI and PTSB looked very favourably on my application. Lady in PTSB was very confident about my application due to being PSW. I doubt it would have been the same if I was public sector with same salary. Especially with Covid and everything.
My application to FI was my name only. PTSB was a joint application.

C575

rs8 wrote: »

Hi all

In the process of saving for a mortgage for a self build!! Were nearly there with our 10 % deposit. Recently got a government job and am very happy as the pandemic won't affect me but out of interest will the banks look apoun me anymore favorably when I apply? I'm sick to death of hearing the old saying "awh they'll throw money at you because of your job" cheers

ICS offers two points above your payscale for public servants. https://www.icsmortgages.ie/