Saving/Applying for a mortgage 2015/16/17/18/19

awec · 15-01-2020 2:57pm

Techn0 wrote: »

Hi all,

First time buyer here looking for a bit of guidance on how to proceed over the next few months. I'll run through my dilemma:

I'm currently talking to a broker and getting the mortgage application underway. I have my eye on a new development of which the final phase is being launched this month. As it stands the mortgage required would put me at circa. 4.5 LTI which as you know is on the high side. I'm a single applicant and aware that lenders may choose to give out exceptions to less risk applicants on higher value homes (mortgage value here around €225k). In saying that however the rest of my application would be quite strong - permanent employment, no loans, regular savings etc.

So here's the issue - I am due a promotion in April which will includes a 20% payrise. From talking to my broker he said that I would have no problem getting approval on the revised salary in April. I am eager to reserve one of the units and put a deposit to secure this month, on the basis that when I require the loan (which will be Q4 2020), I will have no issue with getting the mortgage. I understand when putting down a deposit that developers may look for proof of a loan. I also understand it may not be a best course of action to put a deposit down with the above uncertainty.

Any advice on how to navigate this? These units will sell out by April. I want to place a deposit to secure a unit and I have around 15% of the house value in cash (which doesn't include the HTB scheme). I am concerned the agent may look at my current affordability and not accept.

Any thoughts/ inputs are most welcome!

I think your only real hope is either to get that exemption, or hope that the houses are still available in April. You can pay the booking deposit, which is fully refundable, but there is no way you will get from now until April without having to sign contracts and pay the full deposit.

And no solicitor will let you sign contracts and pay the deposit without having a mortgage in place. That would be crazy.

scarepanda · 15-01-2020 3:26pm

NearlyForty wrote: »

Do banks look for proof of funds for the legal fee’s as well, or are they just interested in the deposit ?
We will continue saving after going sale agreed of course but may have to get a gift off a parent

Ya they do. For some reason our broker told us not to give statements for the child benefit account when we were first applying for mortgage approval. It didnt bother us at the time as the house we were bidding on we had enough funds to cover everything from mortgage savings. We've since gone sale agreed on a more expensive house and were about €5k short of having the funds to cover all additional costs in our mortgage savings account at that point. The broker came back to us with a question regarding the discrepancy and we had to get a 'gift' from a sibling to satisfy the bank.

scarepanda · 15-01-2020 3:29pm

Naos wrote: »

If you wanted, you could get the ball rolling on prices for Mortgage Protection and Home Insurance.

Ya, I was thinking of those. We've gone through a broker so I emailed him yesterday to let him know that there's finally movement from the vendors. He's going to sort out the insurance/protection for us.

I'm sick of the waiting around :-/

NearlyForty · 15-01-2020 3:41pm

scarepanda wrote: »

Ya they do. For some reason our broker told us not to give statements for the child benefit account when we were first applying for mortgage approval. It didnt bother us at the time as the house we were bidding on we had enough funds to cover everything from mortgage savings. We've since gone sale agreed on a more expensive house and were about €5k short of having the funds to cover all additional costs in our mortgage savings account at that point. The broker came back to us with a question regarding the discrepancy and we had to get a 'gift' from a sibling to satisfy the bank.

The 4 dependants we have, showing children’s allowance in bank account etc etc was no issue here but we got loan approval based on our savings and a percentage by way of a gift from my husbands mother.. So that was fine until we discovered this morning that his mother is after giving half of what she had promised us towards our house, to his sister recently and now we have a deficit of e2.5k..! We have a very good chance of going sale agreed over the next few days and now we’re stuck.. So frustrating! We have the full amount for deposit, but the broker told us we need to show proof of funds for the 5k towards legal fee’s etc
Oh well, I guess what will be will be
Best of luck with your purchase ;-)

lir6777 · 15-01-2020 4:29pm

NearlyForty wrote: »

The 4 dependants we have, showing children’s allowance in bank account etc etc was no issue here but we got loan approval based on our savings and a percentage by way of a gift from my husbands mother.. So that was fine until we discovered this morning that his mother is after giving half of what she had promised us towards our house, to his sister recently and now we have a deficit of e2.5k..! We have a very good chance of going sale agreed over the next few days and now we’re stuck.. So frustrating! We have the full amount for deposit, but the broker told us we need to show proof of funds for the 5k towards legal fee’s etc
Oh well, I guess what will be will be
Best of luck with your purchase ;-)

That sounds stressful

best of luck with it, hope it all turns out ok!

Techn0 · 15-01-2020 4:29pm

Thanks awec for your response.

Have you any idea of what exactly the developer needs to see at the deposit stage in terms of adequate funding? What I mean by that is lets say I get only €210,000 from the bank against a property worth €255,000 (new build). That would leave a shortfall of €45,000. €12,750 of that would be covered by HTB and lets assume I have €25,000 in savings. If I had a gift letter at that stage just signed by parents or a partner for the remaining €7k would that satisfy them?

In the grand scheme of things it's only a timing issue, I'll never need a gift but just to prove affordability at that point. The revised mortgage closer to the completion date will realistically fund the shortfall.

I'm not sure if the agents/ developers would require to see more tangible proof (i.e. money in the bank) over a signed gift letter.

Thanks again.

awec · 15-01-2020 4:34pm

Techn0 wrote: »

Thanks awec for your response.

Have you any idea of what exactly the developer needs to see at the deposit stage in terms of adequate funding? What I mean by that is lets say I get only €210,000 from the bank against a property worth €255,000 (new build). That would leave a shortfall of €45,000. €12,750 of that would be covered by HTB and lets assume I have €25,000 in savings. If I had a gift letter at that stage just signed by parents or a partner for the remaining €7k would that satisfy them?

In the grand scheme of things it's only a timing issue, I'll never need a gift but just to prove affordability at that point. The revised mortgage closer to the completion date will realistically fund the shortfall.

I'm not sure if the agents/ developers would require to see more tangible proof (i.e. money in the bank) over a signed gift letter.

Thanks again.

When you're paying your booking deposit (fully refundable) the agent might ask to see that you have mortgage approval. They don't really need to see the amount, they just want to verify that you've actually been through the approval process.

Developers don't care about gift letters or whatever.

When you sign the contracts, the developer wants his 10%. Doesn't usually care where this comes from, cash or HTB. If it's HTB, they will ask for the application codes from Revenue to verify you have the amount you say you have.

Your solicitor, if they are in any way competent, will not let you sign those contracts if you do not have the amount required to cover the full purchase.

Creamy Goodness · 15-01-2020 4:36pm

Techn0 wrote: »

I'm not sure if the agents/ developers would require to see more tangible proof (i.e. money in the bank) over a signed gift letter.

The bank will want to see the money in the accounts before offering you a loan offer, the builders solicitors will want to see this loan offer is in order at contract signing stage. the bank won't issue a loan offer on a property if your financials are not in check at the time of asking for the loan offer.

Also don't forget, you'll need roughly 7-8k for solicitors fees, stamp duty, land registery fees, valuation fees plus furnishing (tbh you'll need much more but they'll usually omit seeing money for furnishings) the bank will want to see this surplus.

NearlyForty · 15-01-2020 6:26pm

lir6777 wrote: »

That sounds stressful best of luck with it, hope it all turns out ok!

Thank you!

scarepanda · 15-01-2020 6:44pm

NearlyForty wrote: »

The 4 dependants we have, showing children’s allowance in bank account etc etc was no issue here but we got loan approval based on our savings and a percentage by way of a gift from my husbands mother.. So that was fine until we discovered this morning that his mother is after giving half of what she had promised us towards our house, to his sister recently and now we have a deficit of e2.5k..! We have a very good chance of going sale agreed over the next few days and now we’re stuck.. So frustrating! We have the full amount for deposit, but the broker told us we need to show proof of funds for the 5k towards legal fee’s etc
Oh well, I guess what will be will be
Best of luck with your purchase ;-)

Oh no :-0, that is a seriously stressful thing to find out at an already stressful time. But the bank will question where the legal funds will come from in that case before they will issue the mortgage. What a pain in the rear.

Best of luck to ye as well, hopefully ye can figure something out.

Noodles81 · 16-01-2020 1:48am

Hi we are planning to move and our house is worth c.€210,000, leaving us with c.€100,000 to put into new house. I have a few queries...

1. How much do we need to have saved or will the banks accept that we will have money to pay fees etc once the house sells? We will have 6 months plus saved at least.

2. Can you sell your house, get the money into your account and arrange to sign contracts for the new house within a week or so? We would be moving a long distance away and want the selling of our house and buying of next house to dovetail so we are not left with no home!

3. My husband will need to change jobs but the mortgage offer will be based on his current salary. Is it true he can't change jobs until after the new house is bought and the mortgage drawn down?

4. My husband is 49, but we are only looking to borrow €100,000 to €130,000. Will he encounter any difficulties? The mortgage will be solely in his name but the house in both our names, as I am chronically ill and can't get mortgage protection.

NearlyForty · 16-01-2020 10:07am

scarepanda wrote: »

Oh no :-0, that is a seriously stressful thing to find out at an already stressful time. But the bank will question where the legal funds will come from in that case before they will issue the mortgage. What a pain in the rear.

Best of luck to ye as well, hopefully ye can figure something out.

Oh stop, we’ve been trying to work through our finances there to see if we can move stuff around and prioritise bills etc etc.. It could be very tight but we’ll see
Fingers crossed!

Creamy Goodness · 16-01-2020 11:29am

Noodles81 wrote: »

1. How much do we need to have saved or will the banks accept that we will have money to pay fees etc once the house sells? We will have 6 months plus saved at least.

they'll want to see the stamp duty figure + solicitors fees which can range anywhere from 1k-3k depending on the work that they need to do.

2. Can you sell your house, get the money into your account and arrange to sign contracts for the new house within a week or so? We would be moving a long distance away and want the selling of our house and buying of next house to dovetail so we are not left with no home!

Yes, this is quite common, there's a term for it but I can't think of it. Basically the sale of your house doesn't close until the purchase of the new home does.

3. My husband will need to change jobs but the mortgage offer will be based on his current salary. Is it true he can't change jobs until after the new house is bought and the mortgage drawn down?

They do not like seeing anyone on probation. if there's a 6 month probation and it'll be 6 months before you drawn down it should be fine.

4. My husband is 49, but we are only looking to borrow €100,000 to €130,000. Will he encounter any difficulties? The mortgage will be solely in his name but the house in both our names, as I am chronically ill and can't get mortgage protection.

Only problem is they'll only give him a term that is up to his retirement age, due to how little you're actually borrowing this shouldn't be an issue.

Woshy · 16-01-2020 11:37am

Noodles81 wrote: »

Hi we are planning to move and our house is worth c.€210,000, leaving us with c.€100,000 to put into new house. I have a few queries...

1. How much do we need to have saved or will the banks accept that we will have money to pay fees etc once the house sells? We will have 6 months plus saved at least.

2. Can you sell your house, get the money into your account and arrange to sign contracts for the new house within a week or so? We would be moving a long distance away and want the selling of our house and buying of next house to dovetail so we are not left with no home!

3. My husband will need to change jobs but the mortgage offer will be based on his current salary. Is it true he can't change jobs until after the new house is bought and the mortgage drawn down?

4. My husband is 49, but we are only looking to borrow €100,000 to €130,000. Will he encounter any difficulties? The mortgage will be solely in his name but the house in both our names, as I am chronically ill and can't get mortgage protection.

What area does your husband work in? My husband is on probation but they have given us mortgage approval anyway as he is highly skilled and works in an area and a role with a high demand. We had to provide a CV showing his work history.

Noodles81 · 16-01-2020 4:11pm

Woshy wrote: »

What area does your husband work in? My husband is on probation but they have given us mortgage approval anyway as he is highly skilled and works in an area and a role with a high demand. We had to provide showing his work history.

That's good to know. My husband would be similar. He's in pharmaceuticals.

Woshy · 16-01-2020 4:29pm

Noodles81 wrote: »

That's good to know. My husband would be similar. He's in pharmaceuticals.

It's worth checking with the bank then definitely. We applied to two banks and both said it wasn't an issue once they heard where he worked and what he does - plus his previous roles.

Noodles81 · 17-01-2020 3:50pm

Woshy wrote: »

It's worth checking with the bank then definitely. We applied to two banks and both said it wasn't an issue once they heard where he worked and what he does - plus his previous roles.

That's great Woshy, thanks for the info.

fifth · 18-01-2020 12:10am

I'm saving for my deposit and about 3-4 months out from having 10%. Mortgage broker says there should be no issues with getting approved due to my salary and regular saving.

Now, I've seen/viewed a house I like and the EA says if I put down a booking deposit now, the builder will wait until I'm ready with the mortgage come 3-4 months time.

My question is if I do this, and I continue saving as normal, will the bank be OK with this or will they see it as me dipping into my mortgage savings and view it negatively?

Left broker a message to ask this but hasn't responded yet this week.

ECO_Mental · 18-01-2020 12:32am

fifth wrote: »

I'm saving for my deposit and about 3-4 months out from having 10%. Mortgage broker says there should be no issues with getting approved due to my salary and regular saving.

Now, I've seen/viewed a house I like and the EA says if I put down a booking deposit now, the builder will wait until I'm ready with the mortgage come 3-4 months time.

My question is if I do this, and I continue saving as normal, will the bank be OK with this or will they see it as me dipping into my mortgage savings and view it negatively?

Left broker a message to ask this but hasn't responded yet this week.

I was told (recently) if you are spending your savings on building your house eg Architects fees planning etc take note of it and this wont be looked at negatively. Just record any spending you are doing and highlight to them and it wont be a problem.

Just looking at your post again, you are asking about booking deposit. If that comes out of your savings that no problem, that what you are saving for anyway.

aqn29swlgbmiu4 · 18-01-2020 2:05pm

Hey all, quick question.
I work full time and have just been made permanent. I'm aiming to save as much as possible and apply for a mortgage in Jan 2021. I have a part time temporary weekend job that makes about €3300 per year. Now that I'm full time and permanent I want to give it up as its tiring working 12 days in a row twice a month and it's all eaten up in tax anyways.

However, would the banks take the earnings into account for a mortgage? It's a year long temporary contract in the public service.
My wage in my 9-5 is only in the mid 30ies so any extra lending would be great.

Don't want to keep up the jobs if the bank won't lend based on it bring temporary however. Job is a bit of a pain in the neck also lol

fifth · 18-01-2020 5:07pm

ECO_Mental wrote: »

I was told (recently) if you are spending your savings on building your house eg Architects fees planning etc take note of it and this wont be looked at negatively. Just record any spending you are doing and highlight to them and it wont be a problem.

Just looking at your post again, you are asking about booking deposit. If that comes out of your savings that no problem, that what you are saving for anyway.

Cheers! Yeah it would just be booking deposit, other fees will be coming from other funds.

fifth · 19-01-2020 1:19am

The house I'm looking at has been on the market for at least 7 months now and not sold.

As it's a new build I know prices are generally fixed, but is it worth me asking if they'll sell for a little less?

What are people's experiences with this? There's clearly not much demand for it (3 houses remaining out of a development of 10). And the location isn't amazing.

What would be a good % discount to ask for? Chancing my arm but sure..

Dwarf.Shortage · 19-01-2020 7:02pm

"He (Michael Martin) also disclosed his party would be unveiling a policy to bring back a Special Savings Incentive Allowance (SSIA) type scheme to help young people save up for deposits on housing. He said his government would provide €1 for each €3 saved up to €10,000. A similar SSIA scheme for the general population was operated between 2003 and 2007."

I assume the €10k is if you save €30k they will add €10k rather than if you save €10k they will add €3,3333.33, it's vagely phrased but the €40k number makes more sense.

I wonder is it to exist in parallel with the HTB scheme (prob a one or the other thing if so) or is it to replace it.

wirelessdude01 · 19-01-2020 7:11pm

Dwarf.Shortage wrote: »

"He (Michael Martin) also disclosed his party would be unveiling a policy to bring back a Special Savings Incentive Allowance (SSIA) type scheme to help young people save up for deposits on housing. He said his government would provide €1 for each €3 saved up to €10,000. A similar SSIA scheme for the general population was operated between 2003 and 2007."

I assume the €10k is if you save €30k they will add €10k rather than if you save €10k they will add €3,3333.33, it's vagely phrased but the €40k number makes more sense.

I wonder is it to exist in parallel with the HTB scheme (prob a one or the other thing if so) or is it to replace it.

From what I've read it seems to be in conjunction with the HTB but no real information has been released yet.

Dwarf.Shortage · 19-01-2020 7:24pm

wirelessdude01 wrote: »

From what I've read it seems to be in conjunction with the HTB but no real information has been released yet.

Be very surprised if it was the case you could get the SSIA top up and then draw down the HTB money as well. I'd say it's more the case they want to take the heat off new builds so the SSIA is a boost for someone looking to buy an existing property.

i know HTB is supposed to incentivise building for developers but something to level the playing field a bit would be no harm.

We'll have to wait until Tuesday so!

lir6777 · 20-01-2020 4:47pm

Creamy Goodness wrote: »

To get an exemption you have to have squeaky clean record, your current loan for your car will stand against you when they do their calculations. I got a 4.4x exemption on a similar salary but there were no outstanding loans and I got AIP in January. It's not impossible but you just got to play it right.

Me again, can I ask which bank you managed to get the exception from? I'm finding a lot of them tell me straight off that for a single applicant they couldn't offer more than 3.8/4 etc. This is before they take a single detail from me!

Creamy Goodness · 20-01-2020 5:00pm

lir6777 wrote: »

Me again, can I ask which bank you managed to get the exception from? I'm finding a lot of them tell me straight off that for a single applicant they couldn't offer more than 3.8/4 etc. This is before they take a single detail from me!

AIB, however their rules might have changed since I got the AIP. I got it 28th January 2018.

lir6777 · 20-01-2020 5:08pm

Creamy Goodness wrote: »

AIB, however their rules might have changed since I got the AIP. I got it 28th January 2018.

Thanks for that, really appreciate your response! I haven't gotten a call back from them yet so fingers crossed!! ðŸ˜°

Dwarf.Shortage · 20-01-2020 6:20pm

FG are proposing changing HTB to 10% capped at €30,000, Varadkar on Matt Cooper as we speak.

lir6777 · 20-01-2020 7:22pm

Dwarf.Shortage wrote: »

FG are proposing changing HTB to 10% capped at €30,000, Varadkar on Matt Cooper as we speak.

As in that you could use HTB for 10% of the deposit instead of the current 5? Up to 30,000? That's amazing- this election might have me conflicted between what would be nice right now versus what would be good for the country going forward ðŸ€£

Saving/Applying for a mortgage 2015/16/17/18/19

Comments