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Inheritance on the way for deposit but credit isn't great

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  • 19-08-2019 1:38pm
    #1
    GooglePlus
    Registered Users Posts: 2,010 ✭✭✭


    Took a hit on my credit rating in my early 20's due to a credit union loan going into arrears and eventually going to debt collection. This has now been fully paid and I currently have a small loan with my bank (2000e), which has not missed a payment.

    I'm due to receive an inheritance of roughly 80-100k and plan on using the bulk of it for a deposit towards a mortgage.

    I understand it's very tough to get a mortgage these days and I'd just like any advice people may have or to know if anyone has been in a similar situation.

    I'd be looking for a joint mortgage with my partner and together we'd take in about 60k a year, with a current history of rental payments of 1500e per month.

    We'd probably have to aim at a commuter town to Dublin, as anywhere within the city is most likely out of our reach.

    What will the banks take into account when assessing us and what should I be doing now, to help our case, bearing in mind that this will probably be 2-3 years down the line.

    Any advice would be greatly appreciated.


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    #2
    Cuddlesworth
    Registered Users Posts: 13,981 ✭✭✭✭Cuddlesworth


    If you have a very high deposit to loan value and your mortgage payments would be significantly under current rental expenditure, then other things could be overlooked.

    You should really have some history of not living paycheck to paycheck though. You mention a current loan but no savings or history of savings. Thats the main thing they are looking for usually. So the best option now is to start putting away a fixed amount per month.

    Joint income of roughly 60k is circa 4,200 a month assuming you are both around 30k a year give or take. So after rent, where is the other 2700 a month, or 675 Euros a week going? Learning to save is probably the most important life skill people can learn.


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    #3
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    The most important thing is how long ago all this was. If it was 7 years or more, then you should be fine, if not, I'd expect to see it on your credit score.

    You can request a report on yourself for a small sum at http://www.icb.ie/cr_options.php I think its about €7 from memory.
    That way, you know what the bank is going to see.


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    #4
    Wheety
    Registered Users Posts: 5,510 ✭✭✭Wheety


    SozBbz wrote: »
    The most important thing is how long ago all this was. If it was 7 years or more, then you should be fine, if not, I'd expect to see it on your credit score.

    You can request a report on yourself for a small sum at http://www.icb.ie/cr_options.php I think its about €7 from memory.
    That way, you know what the bank is going to see.

    Think it's free now. Covered under data protection.


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    #5
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Also, who is this inheritance from? If not immediate family like parents, you may have to factor in a tax liability.

    Have you any savings?


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    #6
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    You need to show a history of saving (and/or paying rent) to get a mortgage. Best thing is go the bank. If they won’t lend right now, they will tell you want you need to do and say come back in 6 months. They may see clear the credit union also.


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    #7
    GooglePlus
    Registered Users Posts: 2,010 ✭✭✭GooglePlus


    Thanks for the advice.

    We are planning on opening a joint savings account and saving roughly 800pm to get a decent history going.

    The inheritance is from immeditate family, through deceased parents and we've been advised by our solicitor that no tax will be due, only probate fees.

    The Credit Union loan was taken out 9 years ago, went into arrears 8 years ago and was fully cleared 4 years ago.

    I'll admit, saving has never been my strong point but with this opportunity, I'll hope to get the finger out and start getting my act together. Hopefully the house prices don't shoot up too much in the meantime.


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    #8
    zig
    Registered Users Posts: 1,206 ✭✭✭zig


    Judging by the timelines you’ve said I think you’ll be fine, just don’t let them find out themselves through the credit check. Give them no reason to be surprised and be honest from the start because they will find out. You’ve a big deposit which will stand to you.


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