Saving/Applying for a mortgage 2020-22 Edition

antimatterx · 04-07-2021 4:33pm

If you move jobs during a year, and the new one has a higher salary, you've passed probation etc. Do banks take your new salary in it's entirety, or average between new and old? E

tobsey · 04-07-2021 7:30pm

Covidhaveago wrote: »

Does anyone have recent experience of equity release mortgages? I have a debt free property which I'd like to keep, wondering if it would be possible to release equity from that in addition to whatever mortgage value I could get based on my salary.

I assume you’re trying to buy a second property? You’re limited to 3.5x your salary for total mortgages. So if you mortgage the property you currently own and the second one, the total value of the mortgages must be less then 3.5x your income. Given that you’ll have a very low overall loan to value, as you’ll own two properties, you might get an exemption for more but it’s hard to know.

Renjit · 04-07-2021 7:35pm

antimatterx wrote: »

If you move jobs during a year, and the new one has a higher salary, you've passed probation etc. Do banks take your new salary in it's entirety, or average between new and old? E

Should be new salary if you are past probation. You need to provide new salary certificate. But again check with the bank, they may have slight differences in assessment.

silver_sky · 05-07-2021 10:51am

I went through the Laya quote process for the Mortgage Protection out of interest, and potential backup plan. It's coming out at 25% extra compared to the current dual policy we're going through the application process on. The Laya policies are single or joint cover only, no dual available. They make it very clear that it's a basic cover and quick, but you do pay for that.

We'll plod along and keep pushing on the medical report for now I suppose...

05-07-2021 11:39am

silver_sky wrote: »

I went through the Laya quote process for the Mortgage Protection out of interest, and potential backup plan. It's coming out at 25% extra compared to the current dual policy we're going through the application process on. The Laya policies are single or joint cover only, no dual available. They make it very clear that it's a basic cover and quick, but you do pay for that.

We'll plod along and keep pushing on the medical report for now I suppose...

Ya, the online application just outright rejects me... So yep it's just not exactly catering to anyone with issues. Will hopefully hear from Aviva this week but making additional applications in case.

Alwandy · 05-07-2021 4:53pm

Might have celebrated a bit too short now! Property I am buying won't be finished until March - April. Holidays, materials and Covid.. Letter of Offer expires in December, had a chat with AIB and they explained I have to go through the whole application process which last time took me 3-4 months to even get to the stage of letter of offer. Looking to resubmit my application in September, hoping the bank doesn't change their mind as I'm on the stage signing the contract. My circumstances won't change, rather than I will have a new job with 3 months probation period which is completed by December with a massive salary increase with 2x my salary bonus guaranteed. Fingers crossed that they'll be happy to proceed. Anyone has an idea of reapplying after having a letter of offer goes faster or a high chance not getting approved?

bleaks · 06-07-2021 1:14am

Been saving away with BOI's mortgage saver account as they offer a 2k bonus at drawdown if you have 5k saved in it after six months, however, I have just read somewhere that this is subject to 39% dirt!? Is this correct!?

It's bad enough them having extortionate interest rates, paying back around 175% of the cost of the loan over 30 years..ffs. Their rates are almost double avant's.

I think I might start looking elsewhere.

Creamy Goodness · 06-07-2021 9:29am

bleaks wrote: »

Been saving away with BOI's mortgage saver account as they offer a 2k bonus at drawdown if you have 5k saved in it after six months, however, I have just read somewhere that this is subject to 39% dirt!? Is this correct!?

It's bad enough them having extortionate interest rates, paying back around 175% of the cost of the loan over 30 years..ffs. Their rates are almost double avant's.

I think I might start looking elsewhere.

DIRT is 33% in 2020/2021, it's a tax and therefore governed by the govt. nothing to do with BOI but they are obliged to collect it for the government.

Any other bank that gives you an incentive for saving will have to do the same.

errlloyd · 06-07-2021 11:17am

bleaks wrote: »

Been saving away with BOI's mortgage saver account as they offer a 2k bonus at drawdown if you have 5k saved in it after six months, however, I have just read somewhere that this is subject to 39% dirt!? Is this correct!?

It's bad enough them having extortionate interest rates, paying back around 175% of the cost of the loan over 30 years..ffs. Their rates are almost double avant's.

I think I might start looking elsewhere.

I got mortgage approval in principle with BOI, but figured it'd be a while till I bought. So I opened the mortgage saver account. Saved the minimum monthly amount, and then transferred a lump sum when it looked likely I was going to get it over the line a few months later.

So with nothing more than 2 trips to the bank, and a savings direct debit I was going to need anyway I got €1,500. There is bascially no way you can complain about this.

aodh_rua · 06-07-2021 7:06pm

Approval in principle letter from AIB today, about two weeks after being submitted to the underwriters and including responding to a further information request

Alwandy · 06-07-2021 9:17pm

Alwandy wrote: »

Might have celebrated a bit too short now! Property I am buying won't be finished until March - April. Holidays, materials and Covid.. Letter of Offer expires in December, had a chat with AIB and they explained I have to go through the whole application process which last time took me 3-4 months to even get to the stage of letter of offer. Looking to resubmit my application in September, hoping the bank doesn't change their mind as I'm on the stage signing the contract. My circumstances won't change, rather than I will have a new job with 3 months probation period which is completed by December with a massive salary increase with 2x my salary bonus guaranteed. Fingers crossed that they'll be happy to proceed. Anyone has an idea of reapplying after having a letter of offer goes faster or a high chance not getting approved?

Going to ask here since the guys on the phone seem clueless half of the time and / or don't really care.. Can you get in touch with the underwriters somehow in AIB and apply for a extension for the letter of offer 3-4 months. The market is tough, not a lot of new builds around and those who are gets bought up before even breaking ground. I just don't want to go through the whole process on re-applying again and answering same questions over and over. The process is so lengthy and the EA / Builder wants me to sign contract asap...

Creamy Goodness · 06-07-2021 9:19pm

Generally if your finances haven’t changed the underwriters will only request up to date payslips and current account statements to reassess the application. You don’t need to submit everything all over again.

Alwandy · 06-07-2021 9:39pm

Creamy Goodness wrote: »

Generally if your finances haven’t changed the underwriters will only request up to date payslips and current account statements to reassess the application. You don’t need to submit everything all over again.

The guys on the phone for AIB mortgage team said I need to reapply completely.
Maybe visiting a branch is recommended after all.. Hopefully they'll be glad to see a drop in tomorrow. Or any ideas?

macnug · 06-07-2021 11:45pm

Does anyone know if diabetics are still having problems drawing down mortgages?

07-07-2021 12:47am

macnug wrote: »

Does anyone know if diabetics are still having problems drawing down mortgages?

Do you mean difficulty getting insurance?

Surely if you have whatever relevant insurance is needed, the bank shouldn't give a sh/te what your medical issue/s are?

silver_sky · 15-07-2021 8:15pm

https://boards.ie/discussion/comment/117610836#Comment_117610836

Issue isn't the bank and your medical issues, it's the insurer for the mortgage protection. The bank needs the mortgage protection in place (although I heard about waivers, not sure how willing) in order to draw down.

15-07-2021 10:28pm

In relation to mortgage protection, really was not prepared for it to be so drawn out. Applied for it a month ago. Medical report request only arrived this week. It got sent back to the underwriter straight away but by looks of things I'll have to push back the closing date because of it. I do have a medical condition but it's not hugely serious and is under control so think I'll get it. Just a bit annoyed by the slowness of the process.

16-07-2021 3:23pm

https://boards.ie/discussion/comment/117616694#Comment_117616694

Yeah that was what I meant by insurance (mortgage protection insurance).

cromelex · 20-07-2021 12:52pm

Was told today by Avant that as FTB availing of the HTB scheme, they will only lend a maximum of 90% minus the HTB amount.

We've managed to reserve a very inexpensive new build, and learning this so late in the game is very frustrating. It seems very arbitrary, especially as we have steady savings and a very sizeable amount that would more than cover that deposit. Being eligible for the HTB scheme, it doesn't make any sense to blow up the savings to end up with basically a 80% LTV loan instead.

This is for a 20y fixed rate, where the monthly repayment would be 2/3rds of our current rent. And it's not even income related as AIB and KBC gave us AIPs for much much higher amounts.

Pistachios & cream · 20-07-2021 1:15pm

https://boards.ie/discussion/comment/117617443#Comment_117617443

what insurer were you going with? I applied through BOI and after 2 weeks of no response I took it out with Laya yesterday.

20-07-2021 9:26pm

https://boards.ie/discussion/comment/117636858#Comment_117636858

Managed to get it through with aviva. Laya outright rejected me...

DubLad69 · 20-07-2021 9:48pm

Is it okay to withdraw money from your savings before you move in?

Our house will be ready in December and our letter of offer expires in October, so we will have to reapply.

With our current approval amount we have more than enough to pay for the house and furnish it. And we have received a significant payrise since the last time we applied.

If we were to withdraw 20k for furniture etc would that be seen negatively by the bank?

Wudyaluk · 21-07-2021 1:32pm

With regards Mortgage Protection Insurance, is it a lot of hassle to change policy provider after drawdown?

Is there a minimum term you need complete before changing?

I naively went along with Bank suggested provider (Irish Life) for the Mortgage Protection. I've subsequently found out they are significantly more expensive than some other (non-bank affiliated) providers. It's €20 pm vs €15 pm, which over 35 years is a decent difference.

I should have done more research at the time but it seemed easier to go via the Bank. I actually haven't started the Mortgage Protection policy yet but I'm hopefully very close to drawdown so I don't want to jeopardise delaying things by cancelling the policy that is currently tee'd up.

Is there anything stopping me from cancelling the Irish Life policy once I get the mortgage across the line provided I have another (cheaper) policy in place to ensure no loss of coverage. I currently have no health issues so shouldn't imagine I take long to sort.

Pistachios & cream · 21-07-2021 3:26pm

https://boards.ie/discussion/comment/117639053#Comment_117639053

As long as you still have the 10% deposit and continue to show a record of saving/paying rent in the amount that the mortgage will be plus insurances then you should be fine. I'd just be wary about buying furniture prior to moving in as you might have nowhere to store it if your build is delayed for any reason.

DubLad69 · 21-07-2021 9:27pm

https://boards.ie/discussion/comment/117642368#Comment_117642368

Thanks,

Yes we will still have about 20% deposit plus saving the same amount of more each month (if you ignore the amount that we will be taking out to pay for the furniture).

They have said that they will store our sofa until the house is ready. Our contract also states that they are required to have the house completed by the end of March. The forman also said that he expects that of there are no more covid delays it might be ready at in December.

Paul_Mc1988 · 22-07-2021 3:57am

https://boards.ie/discussion/comment/117636752#Comment_117636752

Why not go with AIB or KBC then..... the answer is that avant are giving you a much better rate. How they give this rate is they have a higher performing loan book whereby they command higher deposits and insulate themselves from future crashes.

And it completely makes sense to "blow up savings" as savings is dead money whereas a lower mortgage truly saves you money on interest paid.

Bluefoam · 22-07-2021 4:09am

https://boards.ie/discussion/comment/117596343#Comment_117596343

I put a deposit down having agreed that the completion would happen within 6 months. It was actually more than 20 months... I had to do three full mortgage applications in that time, going through the full rigours and having to reapply for central bank exemptions each time... I was told that due to the pandemic, that another application wouldn't be considered and that I was in danger of losing the deposit I had paid... In the end, the contacts were signed on the very last day and only hours before that whole thing would have collapsed on me. Don't trust a developer or the dates they tell you. Don't trust the banks...

cromelex · 22-07-2021 10:42am

https://boards.ie/discussion/comment/117644886#Comment_117644886

Because KBC or AIB will not offer a 20 year fixed rate. I could get a much lower rate with AIB if I only wanted 5 years fixed. All going well we will go with Finance Ireland, whose equivalent 20year fixed rate is 0.24pp worse initially but decreases over time.

Avant will book a swap to cover any changes in the interest rate, and they are pocketing the difference between the rate that they pay and the rate that I would be paying them (with the risk they are taking being the chance that I might not pay them).

Savings are definitely not dead money. My "excess" savings (in addition of what I would need for any deposit) are earning more than 5% interest anually invested in bonds. Why would I want to save 100€ interest on the mortgage when that money could be earning me 150€ instead? And if this changes, their own terms allow me to pay down 10% of the balance on any given year, which I could do with those "savings" if there is no longer a more beneficial alternative.

Not to mention that if my personal situation went bad (by hypothesis, both myself and my partner lost our incomes), that "excess" deposit being kept in savings could pay for more than 2 years of the mortage to keep us afloat.

I agree that a higher deposit means less risk to the lender due to the higher collateral, as you say that insulates them from property price crashes, as there is less principal secured against the property. But given all the talk of how difficult it is for a bank to reposess a home in Ireland, having a loan that has a lower risk on non-payment in the first place makes more sense (and a long term fixed rate is already insulated from interest rate variations, thus reducing the risk of interest rate hikes making it unnafordable.).

Paul_Mc1988 · 22-07-2021 12:21pm

https://boards.ie/discussion/comment/117645620#Comment_117645620

I'd consider savings and investments to be two different things and would therefore clarify that. I've never met someone who called investments savings. Savings = dead money. Investments = good gains in capital.

KBC allow an overpayment on fixed rates so why not just go 30 years with them at the better rate and overpay each month to what your payment for 20 years would be and its a double win.

cromelex · 22-07-2021 12:53pm

https://boards.ie/discussion/comment/117646097#Comment_117646097

Fair enough, that is valid when looking at it from that point of view on savings vs investments.

KBC allow a 30 year term but only a 10 year fixed rate - after 10 years on roll on to a different rate, which will be whatever is available on the market at the time.

Avant/Finance Ireland have 20 year fixed rates (which can be on a 20, 25 or 30 year term), but the interest rate is fixed for 20 years, so it does not change for that period. I know exactly how much I will pay each month for the next 20 years.

The reason why I prefer to fix over such a long term is that my expectation is that rates will rise, and also to insurance myself from being stuck with a 5 or 6% at a point in the far future if I am unlucky with the rolloff from a shorter fixed rate (this is more to do with risk than pure financial payoff - I'd rather lose 100€ on the opportunity cost if the rate goes lower, than to have to pay an extra 500€ a month if rates hit 5 or 6%).

Alwandy · 22-07-2021 8:56pm

https://boards.ie/discussion/comment/117644892#Comment_117644892

Agreed, I don't trust either. Thing is though, I want to sign the contract but my solicitor is refusing to let me without getting a new letter of offer which I won't be getting until December, as said you can't trust the developers. Am I still able to sign the contract?? Builders were happy with subject to financing clause as they understood.

slievenamon fella · 28-07-2021 11:11am

Can anyone recommend a mortgage broker in Cork? first time buyer, will be looking to buy in the North/East of the county.

antimatterx · 29-07-2021 4:56pm

What happens when you're applying for a mortgage and you get a pay rise / new job with a new salary during the year.

The P60 won't match your current salary as you have not been making that money for a year. Will pay slips suffice to get a mortgage relative to your current salary?

silver_sky · 29-07-2021 10:26pm

https://www.boards.ie/discussion/comment/117679405#Comment_117679405

Do you mean that you have approval and now want to up it, or you're just applying? either way bank will ask for your pay slips on multiple occasions... and then again just because. :)

rcreedana · 30-07-2021 12:12pm

https://www.boards.ie/discussion/comment/117679405#Comment_117679405

Generally you'll be asked to supply a salary certificate signed by your employer. So if you've received a raise you can get an updated salary cert from your employer and that should be acceptable, along with new payslips when the raise kicks in.

antimatterx · 30-07-2021 2:06pm

Thanks everyone, that calms my nerves. I move jobs two months ago so I finally am at a salary where I can try to get an apartment.

I was worried they would use my previous lower salary.

Tar.Aldarion · 30-07-2021 3:56pm

What do banks looks for when giving exemptions? Single applicant with a good salary. Do they take into account the size of deposit if you have a large one?

joecork131189 · 30-07-2021 4:35pm

Hi there,

My partner and I are applying for a mortgage. We would like to buy a new built.

We got the approval in principal no problem and I'll probably get a raise in the next few months (been working in the same Company for 7 years now).

We put money aside during the lockdown and we have now about 11K saved (with 2 kids and a rent of 1,609).

Together we save 1,500 euros a month at the moment.

Both salaries combined we are around 81K. When we got the AIP we were told that we could borrow around 283K

Now here is the tough part: I am in the same Company for 7 years now but my partner had to get a new job because they were firing people (he left before they could get to him) and he got a new job very fast (he took the remaining of his holidays on the previous job and started just after to make sure that no gap could be visible and also to make sure that we still both have salaries). His new salary is more than what he got and he has bonuses but the banks won't consider them because he is new on the job.

He is his Company's only helpdesk in Cork in a very stable Company and sector.

He is currently on probation for 6 months and it will end on November 23rd.

We found a house that perfectly fits our criteria but they ask for a formal letter of offer. We went to AIB and PTSB and got rejected because of the probation (note that despite all expenses I am able to save 200 euros more each month and lodge them on my current account).

We then went to a broker who checked our situation and advised us to go with BOI since they tend to be a bit more 'flexible.'

We had a talk with 1 of their Mortgage advisors who told us that they could put a condition on the letter of offer saying that the money will only be released if my partner passes his probation (the house wouldn't be ready before the end of next year).

Has someone already been in that situation? What would you advise us? and is there a way to increase our chances to get a formal approval?

Sorry for the long story and thanks in advance 😀

G_R · 30-07-2021 10:34pm

Sorry, I'm not overly certain what you mean by a formal approval. Passing probation prior to drawdown would be a common enough condition on a loan offer. Almost every loan offer will be subject to some special conditions, it doesn't make it less formal.

He will be passed by the time you look to get funds released, and they will just need a letter from the employer confirming probation has been passed.

joecork131189 · 31-07-2021 10:01am

Sorry, maybe I used the wrong terms (we are new to all this process). I meant a formal 'letter of offer'

G_R · 31-07-2021 11:44am

https://www.boards.ie/discussion/comment/117685934#Comment_117685934

No worries.

As I said, it would be normal enough to have a condition or two on a letter of offer. It won't make it any less formal, and will allow you to sign contracts etc. The only real risk is if your partner doesn't pass probation for whatever reason.

Just as an aside, if you are not closing until end of next year, your offer will likely have expired before you draw down, so chances are you're gonna have to apply again closer to the time. At that point, he will presumably have passed so the condition wouldn't be in the second one.

joecork131189 · 31-07-2021 12:25pm

https://www.boards.ie/discussion/comment/117686250#Comment_117686250

Thanks a lot for your reply :).

Yeah, the solicitor told us that the letter would last for 6 months and that we would have to apply again which is fine since the house is not even built yet and won't be ready until next year.

That's the thing.... we would need a bank that would agree to put the fact that he must pass his probation as a condition and agree to lend us money but apparently neither AIB nor PTSB will do.

We are tempted to go with BOI but the Mortgage advisor didn't seem to be sure enough to tell us if it would be possible.

My partner has over 10 years of experience as IT specialist and we have been in Ireland for 7 years now. We were just surprised to be turned down despite the savings, the HTB approval of 30,000 and the fact that technically my partner never stopped working even when he got the new job (there was no gap, only paid holidays from his old job)....

The solicitor didn't receive any contract yet but we're pretty stressed out about this situation and looking for a solution to maybe make the bank more confident :/

silver_sky · 31-07-2021 11:43pm

@joecork131189 my wife is on fixed term contracts and we had a condition placed on our mortgage offer to show a letter of extension when it was available. Again it was only after a certain date like in your case. No issues once we provided that.

HerrKapitan · 31-07-2021 11:47pm

https://www.boards.ie/discussion/comment/117646237#Comment_117646237

Do you think banks would be bringing in these long fixed terms if they thought interests rates would be rising soon?

01-08-2021 12:03am

As a single person on 45K with a 5K bonus and houses in my area going for 250K i honestly don't know what im saving for.

I'm lucky my rent for my own place is 800.

joecork131189 · 01-08-2021 9:15am

https://www.boards.ie/discussion/comment/117689189#Comment_117689189

I don't know if it could work in our situation... We only got the AIP, not a proper Mortgage approval

antimatterx · 01-08-2021 10:17am

https://www.boards.ie/discussion/comment/117689241#Comment_117689241

Rebuilding Ireland gets you there with a bigger deposit. They give 4.5x salary.

(45K * 4.5 + 20%) is 243K. Save a bit more and you're there.

Citrus_8 · 01-08-2021 10:18am

https://www.boards.ie/discussion/comment/117689241#Comment_117689241

You're saving around 75K for a 1-2 bedroom apartment in Ashbourne, Finglas or Balbriggan. With your salary you should easily be able to save at least 1200 per month. So 75K is possible to save in 5 years. In this time, hopefully, you find a second half, if seeking, or supply will be healthier.

cromelex · 01-08-2021 10:24am

https://www.boards.ie/discussion/comment/117689200#Comment_117689200

It does not matter. Literally, when the bank lends you at a fixed rate, they will at the same time contract an interest rate swap derivative to cover that risk, so the bank is not taking risk on the interest rate going up or down in the period. We shouldn't judge their expectation based on this. They offer you a rate of x because they are contracting a swap rate that is lower, and they are pocketing the difference (+ covering the risk on non-payment, etc).

These rates are not extraordinary, by the way. In Denmark, last January they were offering 0% 20 year fixed rates on mortgages.

I don't think the rates will rise in the next 3 or 4 years, but at the same time inflation seems to be picking up worldwide... in terms of monetary policy this is uncharted territory, so it is really difficult to get any sort of predictions.

01-08-2021 12:28pm

Do Avant Money mortgages only work through brokers?

They've a list of brokers on their site: https://www.avantmoney.ie/mortgages/brokers

Is this the only ones you can use? Thanks in advance.

Saving/Applying for a mortgage 2020-22 Edition

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