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15-01-2020, 12:55   #9541
NearlyForty
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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
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15-01-2020, 13:20   #9542
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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!
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15-01-2020, 13:57   #9543
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Originally Posted by Techn0 View Post
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.
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15-01-2020, 14:26   #9544
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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.
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15-01-2020, 14:29   #9545
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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 :-/
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15-01-2020, 14:41   #9546
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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 ;-)
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15-01-2020, 15:29   #9547
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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!
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15-01-2020, 15:29   #9548
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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.
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15-01-2020, 15:34   #9549
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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.
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15-01-2020, 15:36   #9550
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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.

Last edited by Creamy Goodness; 15-01-2020 at 15:39.
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15-01-2020, 17:26   #9551
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That sounds stressful :/ best of luck with it, hope it all turns out ok!
Thank you!
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15-01-2020, 17:44   #9552
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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.
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16-01-2020, 00:48   #9553
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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.
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16-01-2020, 09:07   #9554
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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!
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16-01-2020, 10:29   #9555
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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.

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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.

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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.

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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.
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