Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Saving/Applying for a mortgage 2020-22 Edition

Options
1…1011131516…147

Comments

  • Options
    #362
    Duke of Url
    Closed Accounts Posts: 1,662 ✭✭✭Duke of Url


    frw5 wrote: »
    Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
    2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.

    Our Car is on PCP and we had to list it in our Application, The bank didnt seem to have a issue with it.


  • Options
    #363
    frw5
    Closed Accounts Posts: 61 ✭✭frw5


    Duke of Url wrote: »
    Our Car is on PCP and we had to list it in our Application, The bank didnt seem to have a issue with it.
    Yeah i know it is normally not a big issue, but I am worried since only 3 months in between they might make an issue out of it?
    How much difference was between you taking PCP and applying for a mortgage if you don't mind me asking? (months wise)


  • Options
    #364
    Creamy Goodness
    Registered Users Posts: 26,556 ✭✭✭✭Creamy Goodness


    There'll be no issue with it as long as it doesn't affect your ability to repay the mortgage according to their formulas, It will pop up on their credit checks. €280 a month isn't a whole heap considering some applicants are paying over €1000 in creche fees* and still able to get mortgages.


    * In the before times.


  • Options
    #365
    ELM327
    Registered Users Posts: 21,373 ✭✭✭✭ELM327


    frw5 wrote: »
    Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
    2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.
    When I got my last mortgage a few years ago (2017) my total loans were ~800 per month.


    Am given (full underwritten AIP) again now with outstanding loan of >1k per month.


    It's the repayment capacity they need to see, not the loan total.


  • Options
    #366
    Interested Observer
    Registered Users Posts: 13,004 ✭✭✭✭Interested Observer


    frw5 wrote: »
    Does anyone know what are the odds of applying for a mortgage 3 months after taking out a car loan? Car loan was 280 per month.
    2 applicants, no other payment or expenses. Both full time workers >2 years same company and all the rest.

    I don't think the timing makes any difference, all they are interested in is affordability.


  • Advertisement
  • Options
    #367
    frw5
    Closed Accounts Posts: 61 ✭✭frw5


    Yeah I used the online calculator, everything up to 1000 no issues.


  • Options
    #368
    errlloyd
    Registered Users Posts: 12,600 ✭✭✭✭errlloyd


    Kav_Piero wrote: »
    Would anyone be able to offer some advice please in relation to what is technically classed as "savings" by banks when applying for a mortgage?

    According to my broker pretty much any month to month surplus across your accounts would be counted, plus rent. They like it to be regular, but effectively if your current account is going up, you're in business.

    The one exception is that banks don't count reduction in credit card debt as saving.


  • Options
    #369
    frw5
    Closed Accounts Posts: 61 ✭✭frw5


    How is rent calculated there, in what regards?


  • Options
    #370
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    With regard to evidence of savings, does anyone know if Irish banks would take UK bank statements as evidence of continuous regular saving or would we need to build from ground up since moving back?


  • Options
    #371
    awec
    Administrators Posts: 53,365 Admin ✭✭✭✭✭awec


    Kalico92 wrote: »
    With regard to evidence of savings, does anyone know if Irish banks would take UK bank statements as evidence of continuous regular saving or would we need to build from ground up since moving back?

    They'll take UK statements no problem but will also likely ask for a credit check to be done in the UK (experian or whatever) if you have a financial history there.


  • Advertisement
  • Options
    #372
    errlloyd
    Registered Users Posts: 12,600 ✭✭✭✭errlloyd


    frw5 wrote: »
    How is rent calculated there, in what regards?

    It's just the repayability test.

    Say you've gone for a 270k mortgage over 35 years. Repayments are gonna be 1,100 a month give or take.

    They want to know you can afford that.

    If you're saving 600pm and paying 700pm in rent then you've got 1,300pm so you can afford repayments.


  • Options
    #373
    WeeCuppaCha
    Registered Users Posts: 96 ✭✭WeeCuppaCha


    I’m hoping some of you would give me a ‘what would you do if you were me’ opinion. I’m really not sure how to proceed.

    Second time buyer, currently renting
    Age: 45
    Single applicant, 1 dependant.
    Full time public servant
    Basic salary €32000
    Guaranteed allowances €3300
    Overtime/unsocial hours €8000

    Savings €60000

    Current rent €550
    Monthly savings €1500
    No loans/credit card

    I am awaiting an increase in basic salary, now due to me but the HSE is working at a snails pace so could be another 6 months before I see it. Basic salary would then be €36000, allowance the same but guaranteed overtime would increase accordingly. I am aware that some allowances/overtime will not be accepted in an application.

    I want to buy a house. The market in my area is pretty stagnant since Covid, but I would expect to see an increase in stock in coming weeks/months.

    Assuming the bank allow 3.5 of current salary and guaranteed allowances only, I would be eligible for a mortgage of €123,540.

    If I wait for my increase to kick in, I would be allowed €137,550.

    However, if I wait until this new base salary kicks in, I’m potentially decreasing the term of the mortgage, making it unaffordable in the banks’ eyes.

    So, what would you do? Continue saving for another year, increasing savings by €18,000 and reducing term by another year? Also running the risk of these savings being swallowed up by rising house prices... Or, just go ahead now on lesser salary and budget?


  • Options
    #374
    frw5
    Closed Accounts Posts: 61 ✭✭frw5


    errlloyd wrote: »
    It's just the repayability test.

    Say you've gone for a 270k mortgage over 35 years. Repayments are gonna be 1,100 a month give or take.

    They want to know you can afford that.

    If you're saving 600pm and paying 700pm in rent then you've got 1,300pm so you can afford repayments.

    Ah yeah makes sense. Considering the situation they should simply take that as a plus without even checking because there is no chance rent is going to be lower than mortgage payment, so basically if you have a pulse that should cover it


  • Options
    #375
    Creamy Goodness
    Registered Users Posts: 26,556 ✭✭✭✭Creamy Goodness


    frw5 wrote: »
    How is rent calculated there, in what regards?
    If you're paying €1000 rent right now and up until your going to drawdown, they will take that into account into your repayment capability i.e. that €1000 can go towards paying part of/all of the mortgage amount.
    errlloyd wrote: »
    According to my broker pretty much any month to month surplus across your accounts would be counted, plus rent. They like it to be regular, but effectively if your current account is going up, you're in business.

    The one exception is that banks don't count reduction in credit card debt as saving.

    For AIB, savings were classed as any payment I could show going into a savings account/credit union at regular intervals and for the same monetary amount for at least 6 months.

    I don't understand why credit card debt would be considered anything but debt? Certainly isn't any form of savings :confused:


  • Options
    #376
    awec
    Administrators Posts: 53,365 Admin ✭✭✭✭✭awec


    frw5 wrote: »
    Ah yeah makes sense. Considering the situation they should simply take that as a plus without even checking because there is no chance rent is going to be lower than mortgage payment, so basically if you have a pulse that should cover it

    Rent will be lower than the mortgage in a lot of cases, particularly if you're moving from a 1 or 2 bed apartment to a 3 or 4 bed house.


  • Options
    #377
    BrokenArrows
    Registered Users Posts: 7,500 ✭✭✭BrokenArrows


    WeeCuppaCha wrote: »
    I’m hoping some of you would give me a ‘what would you do if you were me’ opinion. I’m really not sure how to proceed.

    Second time buyer, currently renting
    Age: 45
    Single applicant, 1 dependant.
    Full time public servant
    Basic salary €32000
    Guaranteed allowances €3300
    Overtime/unsocial hours €8000

    Savings €60000

    Current rent €550
    Monthly savings €1500
    No loans/credit card

    I am awaiting an increase in basic salary, now due to me but the HSE is working at a snails pace so could be another 6 months before I see it. Basic salary would then be €36000, allowance the same but guaranteed overtime would increase accordingly. I am aware that some allowances/overtime will not be accepted in an application.

    I want to buy a house. The market in my area is pretty stagnant since Covid, but I would expect to see an increase in stock in coming weeks/months.

    Assuming the bank allow 3.5 of current salary and guaranteed allowances only, I would be eligible for a mortgage of €123,540.

    If I wait for my increase to kick in, I would be allowed €137,550.

    However, if I wait until this new base salary kicks in, I’m potentially decreasing the term of the mortgage, making it unaffordable in the banks’ eyes.

    So, what would you do? Continue saving for another year, increasing savings by €18,000 and reducing term by another year? Also running the risk of these savings being swallowed up by rising house prices... Or, just go ahead now on lesser salary and budget?

    Go ahead now, and if you find a property you like then it doesn't really matter.
    If you are still looking by the time you get your salary increase then you can increase your budget.


  • Options
    #378
    errlloyd
    Registered Users Posts: 12,600 ✭✭✭✭errlloyd


    Creamy Goodness wrote: »
    I don't understand why credit card debt would be considered anything but debt? Certainly isn't any form of savings :confused:

    My scenario was that I had CC debt of 3k and a direct debit of 600pm from my current account paying it off. My broker told me to cancel the direct debit, and just pay the minimum because they'd count that 600 towards repayability if it was sitting in my current account, but they wouldn't count it if it was paying off my CC.


  • Options
    #379
    Duke of Url
    Closed Accounts Posts: 1,662 ✭✭✭Duke of Url


    Creamy Goodness wrote: »
    If you're paying €1000 rent right now and up until your going to drawdown, they will take that into account into your repayment capability i.e. that €1000 can go towards paying part of/all of the mortgage amount.



    For AIB, savings were classed as any payment I could show going into a savings account/credit union at regular intervals and for the same monetary amount for at least 6 months.

    I don't understand why credit card debt would be considered anything but debt? Certainly isn't any form of savings :confused:

    Agreed. If you owe anything on a CC it is classified as borrowings.

    CC borrowings = Debt if you have an outstanding CC Balance

    They ask for CC Limit and CC Balance.

    This is listed under Financial Commitments with BOI.


  • Options
    #380
    Markitron
    Registered Users Posts: 3,157 ✭✭✭Markitron


    This might sound like a stupid question but when they say that they need to see six months of solid savings, does that have to be the 6 months before you apply or drawdown? I am not planning to apply for anything until January, but I will have 6 months of solid savings in October. Would they care if I only saved half of the normal amount at Christmas for example?


  • Options
    #381
    wally79
    Registered Users Posts: 2,929 ✭✭✭wally79


    Markitron wrote: »
    This might sound like a stupid question but when they say that they need to see six months of solid savings, does that have to be the 6 months before you apply or drawdown? I am not planning to apply for anything until January, but I will have 6 months of solid savings in October. Would they care if I only saved half of the normal amount at Christmas for example?

    I can’t back this up but I would say yes. They are looking to see if you can pay your mortgage each month. If it looks like you can’t afford Christmas without hitting your savings then I think it would be a flag.

    I think it would be better to save a little less each month for mortgage and have a separate Christmas saving account which you add to each month


  • Advertisement
  • Options
    #382
    Jsmac67
    Closed Accounts Posts: 120 ✭✭Jsmac67


    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!


  • Options
    #383
    awec
    Administrators Posts: 53,365 Admin ✭✭✭✭✭awec


    Markitron wrote: »
    This might sound like a stupid question but when they say that they need to see six months of solid savings, does that have to be the 6 months before you apply or drawdown? I am not planning to apply for anything until January, but I will have 6 months of solid savings in October. Would they care if I only saved half of the normal amount at Christmas for example?

    There is no hard and fast rule. Banks know that you are a person and not a robot, the thing they want to see is financial prudence. If you are saving a relatively low amount of your income each month then they'll be concerned if you have to dip into savings to fund purchases.

    However, if you're saving a lot, and you save a bit less to spend a bit extra at christmas they won't care.

    You could go out and spend 40 grand on a brand new car the day before you submit your mortgage application and they will not care once you can afford it.


  • Options
    #384
    awec
    Administrators Posts: 53,365 Admin ✭✭✭✭✭awec


    Jsmac67 wrote: »
    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

    Straightforward application, unless something changes significantly you'll have no issue getting approved for 350k.


  • Options
    #385
    mimimcmc
    Registered Users Posts: 891 ✭✭✭mimimcmc


    Jsmac67 wrote: »
    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

    Sounds ideal tbh


  • Options
    #386
    Markitron
    Registered Users Posts: 3,157 ✭✭✭Markitron


    wally79 wrote: »
    I can’t back this up but I would say yes. They are looking to see if you can pay your mortgage each month. If it looks like you can’t afford Christmas without hitting your savings then I think it would be a flag.

    I think it would be better to save a little less each month for mortgage and have a separate Christmas saving account which you add to each month
    awec wrote: »
    There is no hard and fast rule. Banks know that you are a person and not a robot, the thing they want to see is financial prudence. If you are saving a relatively low amount of your income each month then they'll be concerned if you have to dip into savings to fund purchases.

    However, if you're saving a lot, and you save a bit less to spend a bit extra at christmas they won't care.

    You could go out and spend 40 grand on a brand new car the day before you submit your mortgage application and they will not care once you can afford it.

    Thanks, I am saving a fairly large amount each month, probably almost 2.5x what my mortgage would likely be and I have no outgoings so maybe I will be alright.


  • Options
    #387
    yourdeadwright
    Registered Users Posts: 20,523 ✭✭✭✭yourdeadwright


    Jsmac67 wrote: »
    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

    Banks dream right there,


  • Options
    #388
    errlloyd
    Registered Users Posts: 12,600 ✭✭✭✭errlloyd


    Jsmac67 wrote: »
    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

    If you can't get it none of us will....


  • Options
    #389
    JohnnyChimpo
    Registered Users Posts: 1,074 ✭✭✭JohnnyChimpo


    Jsmac67 wrote: »
    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

    Some people will tell you "oh banks like to see evidence of previous small loans to show repayment capacity" but tbh I think that's always way overstated. As others said, if you don't get AIP straight off the bat then the banks are really going into lockdown


  • Options
    #390
    KilOit
    Registered Users Posts: 2,983 ✭✭✭KilOit


    Jsmac67 wrote: »
    All,

    Does this application seem reasonable?

    Combined salary: 100k
    Occupation: Teacher and public servant
    Savings: 50k in credit union account. Saving roughly 3.5k per month combined
    Amount to borrow: 350kish
    Financial commitments: Nil, never had a loan or credit card either

    Does this bode well for getting approval in principle? Appreciate anyone's opinions or thoughts!

    Pretty much our application back in 2018, had a bit more of a deposit but bank had no issue allowing for 4.5 salary if we needed it


  • Advertisement
  • Options
    #391
    Duke of Url
    Closed Accounts Posts: 1,662 ✭✭✭Duke of Url


    Are banks doing the Stress tests before or After Mortgage Approval in Principle or Both


Advertisement