Saving/Applying for a mortgage 2020-22 Edition

Fred Cryton · 27-08-2023 07:29PM

https://www.boards.ie/discussion/comment/120960983#Comment_120960983

Not really. The main thing for the bank is that the valuation matches the loan amount.

The bank couldn't care less if you overpaid by throwing lots of your own cash to secure the property. All that matters is the price the bank gets from re-selling your home if you default - as long as that will cover the loan amount.

Example - you pay €1million for home, €400k in cash and €600k in bank loan. Bank will only care that the valuation is at least €600k.

Repo101 · 31-08-2023 06:36PM

What is the difference between AIP and a formal loan offer these days from a banks perspective? What additional checks happen? I know AIP is not worth the paper it's written on.

Have AIP, gone sale agreed but the process to getting a decision on the formal loan offer has been quite slow. They have not asked for any additional information yet.

citizen1110 · 31-08-2023 06:54PM

Question, anyone have experience with unpaid maternity leave while going for AIP?

We’ve strong savings etc. and plan to keep saving regularly during the 2.5months unpaid. We need to dip into the savings to make up the difference, is this reasonable from the bank’s perspective? I’ve calculated the lost earnings during the time and we’d be taking out less than that. Also plan to return anything we didn’t need. My thinking is take a little more out than needed just in case. Don’t want to dip into it twice!

dubal · 01-09-2023 08:25AM

https://www.boards.ie/discussion/comment/121035625#Comment_121035625

That cant be true as if the house is worth 600k, and there is a down turn then they have no buffer and are immediately exposed. There is a reason they offer lower rates for lower LTV as it represents lower risk for the bank

Bluefoam · 01-09-2023 08:40AM

https://www.boards.ie/discussion/comment/121035625#Comment_121035625

Thats no true in the slightest... Equity equals security... less chance of defaulting on the loan... if in the case of your death or something else; if the house is worth 1m then they can easily recoup 600k, but if the market value has (for instance) droppped to 500k on a mortgage of 600k, then they'll be left short 100k etc. So mortage holders who have equity in their homes are far more valueable.

LostBreadcrumb · 02-09-2023 01:49PM

Hi, a quick but important question about the Help to Buy scheme - if I haven't paid income tax in Ireland for 4 years yet (due to moving recently), would that disqualify me from the scheme? Any help is much appreciated, thanks!

Mimikyu · 02-09-2023 04:33PM

https://www.boards.ie/discussion/comment/121060111#Comment_121060111

No you’ll still be able to claim for the years you were working.

G_R · 02-09-2023 05:47PM

https://www.boards.ie/discussion/comment/121035625#Comment_121035625

Not at all.

In that example you now have a loan to value of 100%, which is outside of CBI rules and represents a serious risk to the lender.

The LTV will also feed into the lender's internal score card which risk rates the application.

Now, if it went from 1m, to 950,000 you would still have considerable equity so would probably be fine, but in all lenders where I'm familiar with their procedures, the valuation coming in at less than the amount originally advised and/or the purchase price would trigger the application to be reviewed by the underwriting team again to ensure they're still happy with the proposal.

Fred Cryton · 03-09-2023 07:53PM

https://www.boards.ie/discussion/comment/121060987#Comment_121060987

But the point is the bank valuation is not compared against the original price paid. It's compared against the loan amount plus an equity cushion. So lets say €700k in my example might be better. Bank loan of €600k plus €100k equity cushion.

Bluefoam · 03-09-2023 11:09PM

That's not much of a cushion... It's a little more than 10%

G_R · 03-09-2023 11:32PM

https://www.boards.ie/discussion/comment/121065327#Comment_121065327

And in that example, the bank may well accept the increased risk provided it didn't breach their CBI macro rules and it's within their risk appetite, but it's absolutely not a sure thing

G_R · 03-09-2023 11:35PM

Also, when I was underwriting mortgages, if a customer was paying massively over the valuation, even if it is with their own funds, and it still has an acceptable LTV, I'm gonna want a very good reason for it, or I won't be proceeding to be honest.

Cork2021 · 04-09-2023 06:35AM

https://www.boards.ie/discussion/comment/121066078#Comment_121066078

As a former underwriter, once loan offer is approved and sent and used within the timeframe. Do they ask for info other than the conditions attached to be sent in again. Ie payslips, bank statement etc?

G_R · 04-09-2023 04:15PM

https://www.boards.ie/discussion/comment/121066290#Comment_121066290

Not unless they have any queries on what you've sent in. Otherwise you should be good to go.

Zenify · 26-09-2023 08:18AM

Can anyone PM a good mortgage broker? I went into AIB yesterday and the woman was terrible. I always thought going direct would be best but regretted my decision.

My wife is a sole trader and I'm an employee of her. Apparently in those situations the accountant needs to certify wages and accounts but I do all the accounts. It was funny how many times we went around in circles. She also kept asking about my wife's wages and I had to argue with her that the profit was the important figure for her to use.

Living in Templeogue area and looking to buy in Wicklow.

Ideally looking for a "free" broker but will consider paid ones if very good recommendation.

Bluefoam · 26-09-2023 09:32AM

https://www.boards.ie/discussion/comment/121157896#Comment_121157896

Two people secured by the income of a single company that can't guarantee wages... Sounds like they were right to ask. Broker will have to ask those same questions...

The bank are interested in the viability of the individual... the business is something else and confirmimg the financial integrity, viability, stability, ownership, stakeholders and creditors of a business would not be viable for a standard mortgage. If you are a bigger fish, you can work the system and hold everything in the business or trusts, but in that case you'd be unlikely to need a mortage.

The banks will want you to have a solid fanancial basis in order to trust you with mortaging a large amount of money. Unless you can convince them that you have that stability, they are unlikely to lend to you. Most people spend years making sure they have salaries or wages coming in so that when they need to answer those questions, they have everything lined up.

Zenify · 26-09-2023 10:04AM

https://www.boards.ie/discussion/comment/121158135#Comment_121158135

To be honest I was not expecting a mortgage. I believe we most likely won't get one. Due to the reason you mentioned.

Questions about the viability of the business and safety of our income is perfectly valid.

Issue was my wife has a standing order into her personal account. In my opinion that figure is irrelevant as a sole traders income. It is an illusion of a wage. Eventually I gave her the figure and it is far bigger than what profit is and she stopped asking. If that was a relevant figure we can increase it easily for a higher mortgage.

classynow · 27-09-2023 09:26AM

https://www.boards.ie/discussion/comment/121053155#Comment_121053155

Same question, did you get your letter of offer yet?

After a lot of back and forth I've got an underwritten AIP, went sale agreed, requested letter of offer, and now I'm bitting my nails, waiting for an answer.

Repo101 · 28-09-2023 11:09AM

Yes got the loan offer last week. Once you have underwritten AIP and no change in circumstances then you should be fine.

jazz_jazz · 29-09-2023 01:45AM

Hi all. Somebody might be able to answer this question for me please.

I got my AIP a couple of months ago. I've since taken on an acting position which will give me an allowance on top of my salary. As it stands, it is for this year only at the moment but could end up lasting for longer. Would the bank increase the mortgage amount based on this increase salary even if duration of this extra income isn't expected to be longterm?

I assume it won't make any difference but worth asking anyway.

Any information on this would be greatly appreciated. Thanks

Bluefoam · 29-09-2023 06:08AM

https://www.boards.ie/discussion/comment/121171325#Comment_121171325

Unlikely, their calculations are based on your ongoing ability to make the payments

crisco10 · 29-09-2023 06:33AM

It depends what your salary cert would refer to it as. If its just in your base, the bank might change the amount. But would you want to misrepresent it like that?

jazz_jazz · 29-09-2023 07:04AM

Thanks for the replies Bluefoam and crisco10.

dkRulez · 04-10-2023 09:36PM

I have gone sale agreed on a house. My wife's foreign credit report show a property loan against her name. For context this loan was taken against a property owned by her father to support the refurbish of family home. The bank at that time issues a Equitable Property loan for renovation while in theory it was loan against a property owned by her father. We have closed the loan and now BOI have comeback to say we are not HTB eligible. We have a tight deadline to sign the contract, I am collecting documents from foreign country to prove house belongs to father.

What should we do in this case? how to convince BOI we don't own the house. Also we have a broker in the middle engaging with the bank and are not marked in any communication. Do we engage with revenue hoping they would be quick to resolve this issue?

This could seriously have a huge impact on future going forward.

dkRulez · 04-10-2023 09:40PM

We have gone sale agreed on a new built and have a short deadline to sign contract. We are in a situation where my wife's foreign credit report shows a loan against property. For context, my wife 5 years ago took a loan to refurbish the family home. The bank issued her a loan as a Equitable Property Mortgage against fathers property. The bank just classified the loan as property loan instead as a loan against property for improvements. BOI has come back to us stating we are not HTB eligible. The loan is closed now, how do we prove to BOI that the house is not owned by my wife and the loan is not a property loan. Do we directly engage with Revenue to sort this out, which may delay us significantly? I am collecting documents from foreign country but worry if it would be ignored.

We are worried we may miss out on the house. We also have a broker in between and have no direct communication with BOI.

Bluefoam · 05-10-2023 08:34AM

https://www.boards.ie/discussion/comment/121195630#Comment_121195630

The type of loan is important... It would describe the legal requirement in how repayments are made, the terms of the loan, the period of repayment and importantly the interest rate and how that is calculated...

I'd guess that the terms were more favorable for a mortgage rather than a regular loan, so that is what she chose to take. It's a mortage... so that would disqualify her from HTB, the bank are right. Luckily, you can take out a mortage in you're own name if you qualify for HTB, but your wifes earnings can't be used to fund it and she can't go on the deeds. Otherwise you can proceed with the mortgage without using the HTB.

If however, the bank were mistaken in in labeling the loan, and it was in fact a regular home improvements loan rather than a mortgage, they would be able to provide you a simple letter to clarify to the new mortgage provider... They would also probably have to change the records relating to the loan.

dkRulez · 05-10-2023 12:33PM

https://www.boards.ie/discussion/comment/121196316#Comment_121196316

While taking the loan it was always mentioned as an home improvement loan but keeping the house ( her father's) as equity. However, in documents it appears as home loan with father as co-applicant. We are trying to prove ownership has always been with her father and would remain like that in future, not sure how much we could convince. She was never in ownership of the property and never would be.

Buying without her salary is almost impossible, a small technical issue is derailing everything for us. Also, since the loan is now closed very difficult to get bank to state otherwise on the type of loan, its a case wherein banks offer loan to kids but ask parents home as security or co-applicant.

luisgarciaisgod · 09-10-2023 06:19PM

I bought an apartment with some inheritence i recieved a few years ago, I sold it recently because I want to buy a house but I'll need a mortgage to buy a decent house.

Would I be considered a first time buyer because I've never had a mortgage? Could i get 4x my salary?

herbalplants · 09-10-2023 09:06PM

https://www.boards.ie/discussion/comment/121215333#Comment_121215333

Yes you will be considered first time buyer. Not much difference anyhow. You will have good deposit by selling your apartment.

Bluefox556 · 23-10-2023 10:29AM

Does anyone have any idea how long it takes for AIB to check final documents before drawdown?

They just confirmed receipt of all solicitor documents including the request for funds for tomorrow 24th

It is possible for them to review docs today and release money tomorrow?

Saving/Applying for a mortgage 2020-22 Edition

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