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Getting Mortgage with existing loans

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  • 30-05-2019 11:41am
    #1
    sashab
    Registered Users Posts: 78 ✭✭


    Me and wife decided to start saving for house. We currently have 2 loans, both personals, which wont end in next 5 years, and our plan is to apply for mortgage in a year. We currently have about 10k savings and will get more, I earn more than 60k and she about 15k.

    My question is, will I get declined for mortgage if I have existing personal loans?


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    #2
    amcalester
    Closed Accounts Posts: 4,121 ✭✭✭amcalester


    Hard to say, but your chances of getting a mortgage would improve if the loans were cleared.

    It's likely that if approved the existing loans will reduce the amount you can borrow.

    KBC have a calculator where you can get an idea on how much if any they'd lend you.


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    #3
    Creamy Goodness
    Registered Users Posts: 26,556 ✭✭✭✭Creamy Goodness


    It’s not difficult to get a mortgage with existing loans but they affect your affordability. The mortgage bank will do their sums based on you having to pay those personal loans first.

    Basically they take your net take home monthly pay, minus existing loans, minus child care costs (if any), minus €250 per child (if any) and after that you need to cover the mortgage payment (stress tested 2-3% depending on bank) and still have roughly €1200 left of discretionary income. If you pay rent now they’ll factor this into the equation as well.

    It’s totally doable depending on the circumstances but if you’re looking to live within an hour of Dublin I’d advise clearing the loans.

    “We have 10k savings and will get more” this seems a little vague. How do you plan to get more? The banks will want to know exactly where the money is coming from and will like to see at least 6 months regular savings with a fixed amount. You can always top up savings but just to be aware.


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    #4
    sashab
    Registered Users Posts: 78 ✭✭sashab


    For amount that we are looking for every calculator said that we can get it, I was just wondering if bank will decline us if we have existing loans.


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    #5
    Lux23
    Registered Users Posts: 7,134 ✭✭✭Lux23


    As long as you can afford the loans and a mortgage, it shouldn't be a problem.


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    #6
    Humour Me
    Registered Users Posts: 360 ✭✭Humour Me


    They probably won’t refuse you a mortgage, but they may restrict how much they are willing to lend you.

    You are unlikely to get an exception to the 3.5 salary limit, so if you need more, you may need to clear one or both loans first.


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    #7
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    sashab wrote: »
    For amount that we are looking for every calculator said that we can get it, I was just wondering if bank will decline us if we have existing loans.

    75k income x 3.5 = 262k max possible loan.
    10% deposit = 26k, current deposit 10k.
    Monthly net income = 5k(married joint assessment).
    5k - 1250 Mortgage payment - Loan amount - current rough expenditure(not including saving) - 1250 disposable cash = ?


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    #8
    jlm29
    Registered Users Posts: 3,818 ✭✭✭jlm29


    We got a mortgage two years ago with three loans between us. But we were looking for a small amount. You’ll get the mortgage if you can afford the repayments according to the banks calculators along with your loan repayments


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