Mortgage Approval and Savings

Dustin_61988 · 10-10-2019 3:14pm #1

Hi,
Myself and my partner were going to apply for a mortgage next year but a house we really like has just come on the market at a very good price.

We both have full time permanent jobs and both earn between 30- 40k a year. I have been gifted 37k from my parents and my partner recently sold his parents (both are deceased) house so from the sale of that he has 175k. We rent and our monthly rent is 1400k. We are looking for a mortgage for 112k.

Our concern is that because our plans for trying for a mortgage had completely fast forward, I don’t have much savings but my partner has some. Will this majorly affect our chances or will the banks take into account our rent payments?

Thanks!

SozBbz · 10-10-2019 3:33pm

How much is the house you want to buy?

How much is the difference between the total of your cash (175 + 37 + any savings you may have) and the house you want to buy?

Will 3.5x your incomes bridge the gap? If yes, I'd say go for it!

The repayments on €112k would only be like €500-600ish per month, so a very affordable mortgage for 2 people.

Oh, just make sure you've set aside 1% of the price for Stamp Duty and another few thousand for legal and professional fees in your calculations. And ideally a few thousand for moving expenses and furnishings.

If that means borrowing €120k, then that would still be extremely affordable IMO.

jlm29 · 10-10-2019 3:36pm

If the house you’re looking to buy is over 300k, and you’re only looking to borrow 112k, id say you won’t have much trouble, sounds like you’re in a very strong position.
Go for it!

Dustin_61988 · 10-10-2019 3:37pm

SozBbz wrote: »

How much is the house you want to buy?

How much is the difference between the total of your cash (175 + 37 + any savings you may have) and the house you want to buy?

Will 3.5x your incomes bridge the gap? If yes, I'd say go for it!

The house is going for 310k so with all monies we have the difference is 98k.

BrokenArrows · 10-10-2019 3:37pm

Dustin_61988 wrote: »

Hi,
Myself and my partner were going to apply for a mortgage next year but a house we really like has just come on the market at a very good price.

We both have full time permanent jobs and both earn between 30- 40k a year. I have been gifted 37k from my parents and my partner recently sold his parents (both are deceased) house so from the sale of that he has 175k. We rent and our monthly rent is 1400k. We are looking for a mortgage for 112k.

Our concern is that because our plans for trying for a mortgage had completely fast forward, I don’t have much savings but my partner has some. Will this majorly affect our chances or will the banks take into account our rent payments?

Thanks!

With that much cash you wil have no problems getting a mortgage.

Dustin_61988 · 10-10-2019 3:38pm

jlm29 wrote: »

If the house you’re looking to buy is over 300k, and you’re only looking to borrow 112k, id say you won’t have much trouble, sounds like you’re in a very strong position.
Go for it!

I find the whole mortgage process quite daunting! Fingers crossed!

Dustin_61988 · 10-10-2019 3:39pm

BrokenArrows wrote: »

With that much cash you wil have no problems getting a mortgage.

Regardless of minimal savings?

SozBbz · 10-10-2019 3:42pm

Dustin_61988 wrote: »

Regardless of minimal savings?

job security and ability to pay €1400 in rent monthly would offset any risk on such a small mortgage IMO.

Creamy Goodness · 10-10-2019 3:46pm

BrokenArrows wrote: »

With that much cash you wil have no problems getting a mortgage.

Still depends. OP could have defaulted on loans before (they haven’t disclosed) whilst default isn’t an automatic no, it will factor into the decision.

Dustin_61988 · 10-10-2019 3:49pm

Creamy Goodness wrote: »

Still depends. OP could have defaulted on loans before (they haven’t disclosed) whilst default isn’t an automatic no, it will factor into the decision.

Neither myself or my partner have any loans and we also undertook a credit check with the ICB

Alkers · 10-10-2019 3:51pm

SozBbz wrote: »

job security and ability to pay €1400 in rent monthly would offset any risk on such a small mortgage IMO.

Yes, as the €1,400 rent you've been paying will demonstrate your ability to meet the repayments. This will be stress tested also so just go for as long a mortgage term as they will give you and then you can repay this off early.

SozBbz · 10-10-2019 3:56pm

Look, assuming there is no skeletons in your closet and taking what we've seen here on face value, I doubt you'll have problems.

But the process of applying for and ultimately putting in place a mortgage is long and drawn out, stressful and frustrating, but for most of us its a necessary evil. You'll be asked to produce all sorts of paperwork, pay slips, P60s, proof of address, salary certs, bank account statements going back months... its a slog pulling it all together, so the sooner you start, the better.

If I were you I'd begin the application process. Look up who has the best deals for couples with strong LTV ratio and just apply. What have you got to lose?

At the same time, id be making an appointment to view that house, make sure its what you want and work towards getting your AIP in order to be able to make a bid.

Dustin_61988 · 10-10-2019 4:05pm

SozBbz wrote: »

Look, assuming there is no skeletons in your closet and taking what we've seen here on face value, I doubt you'll have problems.

But the process of applying for and ultimately putting in place a mortgage is long and drawn out, stressful and frustrating, but for most of us its a necessary evil. You'll be asked to produce all sorts of paperwork, pay slips, P60s, proof of address, salary certs, bank account statements going back months... its a slog pulling it all together, so the sooner you start, the better.

If I were you I'd begin the application process. Look up who has the best deals for couples with strong LTV ratio and just apply. What have you got to lose?

At the same time, id be making an appointment to view that house, make sure its what you want and work towards getting your AIP in order to be able to make a bid.

We’ve actually been in contact with a mortgage broker and have all the necessary paperwork ready to go. Just wanted some reassurance as I got a bit of stress/ anxiety over it. But like you said most of us have to go through this process at some point!

jlm29 · 10-10-2019 4:16pm

Dustin_61988 wrote: »

We’ve actually been in contact with a mortgage broker and have all the necessary paperwork ready to go. Just wanted some reassurance as I got a bit of stress/ anxiety over it. But like you said most of us have to go through this process at some point!

We remortgaged our house a couple of years ago. We hadn’t been planning on it, we had been doing it up bit by bit which had wiped our savings. Same process as applying for a new mortgage. We had no regular savings and no history of paying rent, but got the mortgage no probs because of the LTV, and we easily showed affordability

Compak · 10-10-2019 10:49pm

Dustin_61988 wrote: »

We’ve actually been in contact with a mortgage broker and have all the necessary paperwork ready to go. Just wanted some reassurance as I got a bit of stress/ anxiety over it. But like you said most of us have to go through this process at some point!

You are in such a strong mortgage position for what you want and offer, I had to read the post a couple of times as initially assumed you were trolling.

TimeToShine · 10-10-2019 11:37pm

Where was all this carry on back in the mid 2000's?

doh1988 · 12-10-2019 11:40am

Sounds like you are in a good position , best of luck!

mycro2013 · 12-10-2019 1:46pm

Run it by a financial advisor or accountant to decide on the optimal mortgage borrowing level.

Ploughing all your cash into a mortgage may not be the best use of capital. An unbiased second opinion may be beneficial.

Mortgage Approval and Savings

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