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Saving/Applying for a mortgage 2020-22 Edition

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Comments

  • Registered Users, Registered Users 2 Posts: 965 ✭✭✭Pete123456


    it is of course possible, probably not advised by most but if you’re confident you’ll get the loan then go ahead - but make sure there is a “subject to loan” clause included just in case for whatever reason you didn’t get the loan offer or it had crazy conditions etc



  • Registered Users Posts: 15 Blaa.boy


    Thanks very much for reply. Yes Bank are confident just a matter of time was problem on their end. Hopefully it will be in by then.



  • Registered Users, Registered Users 2 Posts: 2,642 ✭✭✭sillysocks


    Our contracts were issued with subject to loan offer as a clause so I’d say once that’s included you’d be fine.



  • Registered Users, Registered Users 2 Posts: 77 ✭✭CalisGirl


    Just to note if it's a Nama/Receiver type sale, they won't agree to a subject to loan clause as a rule but other sellers should be fine.



  • Registered Users, Registered Users 2 Posts: 18,287 ✭✭✭✭rob316


    After applying to individual banks myself and not getting what I needed, I went to a broker last week and he got me exactly what I needed today. I'm wondering now why the **** I didn't go to him 12 months ago. He got wife's carers income, my secondary income, bonus, domicillary care, every penny that comes in he got it accounted for.

    Anyone with complex circumstances, get in touch with one.



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  • Registered Users, Registered Users 2 Posts: 432 ✭✭iHungry


    Hi, could anybody tell me how much I need to start saving every month to be eligible for a mortgage. €800 or €1000 each month? I'd like save the minimum that is acceptable. Thanks



  • Registered Users, Registered Users 2 Posts: 614 ✭✭✭random_banter


    This really depends on how much you are planning to spend on a property and borrow from the bank. If you were only borrowing a small amount, then the savings could be smaller, if you were buying a more expensive house and you need a bigger mortgage, the savings would need to be bigger. It's all about what you will be expected to pay back to the bank every month.

    For example, if you took out a mortgage which had repayments of 1000 euro a month, you would need to prove that you have the repayment capacity of 1000 euro per month + some wiggle room, generally the guideline is about 30%. So if your planned mortgage was to be 1000 a month, try to demonstrate that you have a repayment capacity of 1300 euro a month. Generally they will look to see you demonstrate this over a long period of time, and a minumum of 6 months. The best way to do this is to send those savings to a different account dedicated to saving every month, and try not to touch the account at all - they won't like it if you keep dipping in to it.

    Of course, you will also need to be able to show that you have your deposit - if a FTB, that would be 10% of the purchase price. Some people use their repayment capacity proof to also save towards that deposit, so you just let that build up in a bank account.

    The bank will sometimes take the rent you pay into account for your repayment capacity. In my case they have taken my rent, plus the amount that I am saving per month to prove my capacity to make those repayments. The mortgage advisor in the bank will help you with questions like this too.



  • Registered Users, Registered Users 2 Posts: 432 ✭✭iHungry


    Hi thanks for your great reply. So I should save 30% of my take home pay not my gross? Reason I'm asking is I like to invest my money so thats why I asked the minimum to save because I invest some of my disposable income every month. Would the bank take that into account on top of my monthly 30% of savings? Thanks



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    A monthly amount into an investment account is also fine (once it not something link Bitcoin etc) but money into a managed fund or something is absolutely fine. The like of degiro etc can be ok, but it's very difficult to work out exactly how much you are putting in with the statements they produce, so try and avoid it if you can.

    And it's not any set percentage of your income. The bank need to see that you can afford the mortgage at a stressed rate (+2% (so they know you can still afford it if interest rates rise)).

    Google an online mortgage calculator, stick in what you want to borrow and over what term and stick in 5% (3+2) and whatever that equals is what you should be showing you can afford each month.

    This amount can be made up of rent you are currently paying, savings, money to investments, ESPP scheme in work. You can even use an AVC if you're desperate, but I personally wouldn't be a huge fan of using that, as it's bad financial advice to stop contributing extra to your pension.

    Basically, it doesn't all have to be into a savings account. It's anything you will no longer have to pay or can stop paying if you need to, once you have drawn down the mortgage.



  • Registered Users Posts: 22 COLMCS


    First time single buyer here 43 (I know age is not on my side), managed to save a deposit all the while renting, have no loans, no credit card debt, have an 18 year old, but I guess on paper he would not be considered a dependent. Would i be best to go to a broker or directly to a bank itself? If I go the mortgage broker route based in Louth can I get any recommendations'? I earn 42K, at 3.5 i wont have much choice, how ease is it to get an exception to 4.5 and would i need to wait till next Jan for that?



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  • Registered Users, Registered Users 2 Posts: 18,287 ✭✭✭✭rob316


    You need to show payment capacity. So if your living at home and plan on repaying €1000 a month on a mortgage you'd need to show you can save that monthly. If your paying €600 rent, they'd like you to save additional 500/600 a month.



  • Registered Users, Registered Users 2 Posts: 18,287 ✭✭✭✭rob316


    Exceptions are not easy to get and are generally for higher earners (north of 50k) and lower LTV. Rebuilding home ireland is your best bet, you'll get 5 times and they have revised the APR and included MPI in it now so its much better value.



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    Being honest, a sole applicant at your salary level is going to struggle to get approval for an LTI exception I'm afraid.



  • Registered Users Posts: 559 ✭✭✭theboringfox


    Might be wrong forum so apologies if case. Just wondering if anyone applied for mortgage with likes of avant or finance ireland where you need mortgage to buy and will be looking to borrow again to do up and extend house? I will go through broker but interested if anyone did it. Just worried they might have no interest in top up mortgages for extensions.



  • Posts: 0 ✭✭✭✭ Miller Ambitious Crucifix


    Question for anyone who has switched and broken a fixed rate - we will owe the bank the breakage fee, which is fine but just wondering is that paid through our solicitor or do I have to pay the bank directly?


    Basically, do I need to contact the bank about this or will they tell the solicitor and we transfer it via them?



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    If you're breaking out prior to redemption, then you can pay yourself.

    If you're doing it as part of the redemption of the loan, then it will be part of the redemption figure and can pay through the Sole.



  • Registered Users Posts: 170 ✭✭bleaks


    Hey folks. My salary increment is due at the end of next month. It'll make a significant enough difference to the amount we can borrow.

    Would a bank / broker take this into consideration if I put that (next month's) salary down on my forms, even though my current payslips state my current salary?

    Could be difference of losing a house we really like the look of - though not going to get our hopes up too high - so very keen to get it sorted and have a bit extra for the bidding wars.



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    Once you explain what's happening, it should be fine.

    Ask your employer to fill in a salary cert with your new salary details.

    They will require you to provide updated payslips confirming the new salary, that will be a condition of your approval.



  • Posts: 0 ✭✭✭✭ Miller Ambitious Crucifix


    If it's on your salary cert. You could possibly get conditional approval.



  • Registered Users Posts: 501 ✭✭✭DubLad69


    Hi guys,

    We had a very stressful time applying for our mortgage. It is nearly 6 months now since we got our letter of offer and our house still isn't ready. We are going to have to reapply. Has anyone had to do this? Is it as difficult as the original application?


    We are earning about €10k more now than when we initially applied. Can they take that into account now for a bigger mortgage as we are currently giving a 25% deposit.



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  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    Depending on your bank you may be able to extend the loan offer by a couple of months with less documentation (payslips and a bank statement usually).

    If you need it longer than that, it's a full reapplication. I don't know what issues you had the first time, but presumably if you have gotten the LO already, it will be straight forward.

    And yes, the additional salary can be taken into account. That doesn't nessescarily mean they will increase your loan amount, but it it had been capped at 3.5x your old salary, then there's a good chance they will increase your loan amount.



  • Registered Users Posts: 501 ✭✭✭DubLad69


    Thank you. House won't be ready for a whole longer so it looks like I will have to do a full reapplication.

    I am a bit worried now. When we originally got the letter of offer I withdrew €5k from my mortgage savings to start purchasing furniture and sort out a few things that I've been meaning to get around to. Even if we deduct that from our repayment capacity we still average out at way more than the mortgage will be.

    Is this Likley to be an issue?



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    Once it was used for once off expenditure and not for day to day expenses, you'll be fine - just call it out, and point out the transactions on your statements.



  • Registered Users Posts: 146 ✭✭kneejerk


    I'm always just left my savings in my current account. Stupid (I know).

    Where is the best place to put savings for a deposit. Have 20k now and will be adding to it every month



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    Once you have the discipline not to touch it, and it's buidling monthly, it's fine. They will just take the balance now and take away the balalge 6 months ago.

    If you want to set up a separate account, then any deposit account offered by your bank or credit union. The interest rates on all of them are minimal and not worth thinking about.

    If you are planning on getting a mortgage with Bank of Ireland they have a mortgage saver product which pays a bonus 2k interest (subject to DIRT) if you draw down a mortgage with them, so that may be an option for you.



  • Registered Users Posts: 170 ✭✭bleaks


    Is there anyone who has applied for an ICS mortgage recently able to tell me what the rough turnaround for approval is like?



  • Registered Users Posts: 12 coolbeans21


    Hi guys we have a loan offer from PTSB, however last month in the final week before payday my account went into 10 euro unauthorised overdraft. It was due to a bill that I wasn’t expecting and I didn’t notice for a few days. We are going to have to request to extend our offer because our new build won’t be ready within the 6 months just wondering if this is going to effect the extension? Thanks for your help,



  • Registered Users Posts: 170 ✭✭bleaks


    Anyone much experience of hopping between mortgage providers every few years? Had a chat with a broker and he was selling going for the cashback offers (we're FTB) even though the interest rates are high, and then re-mortgaging in 3 or so years once we're LTV 80% and getting a better offer...

    Just seems a bit risky to me as the way inflation is looking it doesn't seem like interest rates are coming down. Any thoughts? We're technically eligible for a Rebuilding Ireland loan which would be a fixed interest rate for 25/30 years so we're torn on what to choose.



  • Registered Users, Registered Users 2 Posts: 77 ✭✭CalisGirl


    Anyone know how long it takes Haven to release funds from time of drawdown request?



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  • Registered Users, Registered Users 2 Posts: 965 ✭✭✭Pete123456


    No but I’m very interested in any response also…



  • Registered Users, Registered Users 2 Posts: 1,275 ✭✭✭tobsey


    I wouldn’t worry about it. The banks can be difficult but they’re not Scrooge level difficult. They know these things happen. Did you save much in the same month? If so then I doubt they’ll have an issue



  • Registered Users, Registered Users 2 Posts: 6,907 ✭✭✭DopeTech


    Anybody receive their Letter of offer from aib recently? If so, how long did it take from the time you notified them you went sale agreed? AIP has been in place last few months.

    https://www.buymeacoffee.com/dopetech.ie



  • Registered Users, Registered Users 2 Posts: 2,656 ✭✭✭C14N


    I did my mortgage with AIB. When we went sale agreed it was about 3 weeks later before the letter of offer was received.



  • Registered Users, Registered Users 2 Posts: 696 ✭✭✭houseyhouse


    Got a mortgage from ICS last year. Took about a week or 10 days from first contact to approval. Maybe even less. They try to be very quick but obviously you need all your documents ready to go or you’ll have delays.



  • Registered Users, Registered Users 2 Posts: 2,656 ✭✭✭C14N


    Just to advise everyone applying for a mortgage or planning to soon: get your mortgage protection insurance sorted very early in the process. It's tempting to just put it off and wait until you have a house sorted, but it can be a very slow procedure and not something you want to be rushing to do at the last minute if there's anything wrong with you at all; and if you can't get it, you'd want to start working on a possible waiver ASAP. Even if you're still probably months away from finding anything or closing, you can always take out a policy that won't start until you actually draw down, or cancel it if the whole thing goes belly up. It's just not worth the stress of trying to get it done at the last minute, especially if you only then find out you can't get it.



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  • Registered Users, Registered Users 2 Posts: 614 ✭✭✭random_banter


    I've seen your posts on other threads - this is good advice - as it takes awhile even for a normal mortgage protection process. For us it took a few weeks to get the policy approved even though there were zero questions re: health status.

    I'm really sorry to read about the problems you're having but we're all rooting for that waiver for you. Best of luck.



  • Registered Users, Registered Users 2 Posts: 2,656 ✭✭✭C14N


    Thanks! Just wanted to share so others can learn from our mistakes😅 And to maybe give a bit more clarity on the waiver process too, because it's very opaque. I had been sifting through many old posts about it, but none of them followed through with their successes or failures. I still don't really know much about it or how likely they are to give them out, but just wanted to at least give some example of things working out for others to see.



  • Registered Users, Registered Users 2 Posts: 1,484 ✭✭✭DelBoy Trotter


    Does anybody know the max age PTSB will lend to? Is it 65?



  • Registered Users Posts: 806 ✭✭✭bored_newbie


    Can I ask a basic mortgage question in relation to paying off early?

    For simplicity sake, say I borrow €100,000 over ten years. A fixed-rate loan and the interest works out at €20,000. So €120,000 in total to pay off over 10 years.

    After five years, I manage to save enough to pay it off.

    Q1. Assuming the bank doesn't want to charge me a fee, how much would it take to pay off the loan half-way through?

    Q2. Are the banks enforcing penalties these days for this sort of thing? BoI in particular.



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    Q1 - that's very hard to answer, because interest is accrued/charged on the capital amount outstanding. It's not as simple as pay off half way through, pay half the interest. A lot more interest will have been charged in the early years. Google a loan amortisation calendar and you can see the capital/interest split of payments throughout the life of the loan.

    Q2 - if you're on a variable rate, no. On a tixed rate, they can charge a break funding fee in certain circumstances. Full forumla below coppied from one of the banks websites, but it usually amounts to little or nothing. In your scenario, fix for 5 years then when you go to redeem early you will have already rolled back to a variable rate, so it won't apply


    B = (W - M) x T / 365 x A, where:

    B = the break funding fee.

    W* = the Fixing Rate at the date you fixed your mortgage.

    M** = the Fixing Rate at the date you wish to break out/redeem.

    T = the period of time from which you wish to break out/redeem your mortgage to the end of the fixed rate period.

    A = the balance of your mortgage.

    * The Fixing Rate (W) means the market interest rate applicable at the start of the fixed interest rate term, for the duration of the fixed rate period.

    ** The Fixing Rate (M) means the market interest rate applicable at the time of the early repayment or conversion, for the unexpired fixed interest rate term. The rate applied is based on the remaining fixed rate term of the mortgage.



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  • Registered Users Posts: 806 ✭✭✭bored_newbie


    Thanks for the response G_R. Just one correction, in this scenario the loan is ten year fixed so I don't think it rolls back to a variable rate.

    I will check the loan amortisation calendar as you suggested.



  • Registered Users, Registered Users 2 Posts: 11,879 ✭✭✭✭klose


    We created a joined account before drawing down our mortgage, we were putting in 50 each a week to get the ball rolling but the house sale fell through sort of, fast forward to summer and we spent the money in the account for our staycation, we ended the direct debit to this account as we thought the house was dead and buried (kept up all our other savings etc that we had when we were initially buying the property)

    Turns out the house sale is back on after the owners sorted an alternative place to stay to go ahead with the sale, the account had its quarterly fees debited and went into an overdraft of about one euro (yes really). I wonder will this effect us? its not a current account or savings account for us so i'm hoping not too much of a big deal will be made of it? Everything else with us is perfect otherwise.



  • Registered Users Posts: 713 ✭✭✭LeeroyJ.


    Where did you set this up and do you have to be married? We're also in the final stage of sale agreed and are looking to set this up as well. Thanks!



  • Registered Users, Registered Users 2 Posts: 2,656 ✭✭✭C14N


    I'm assuming you're wondering if the bank/lender will care, and tbh, I doubt this would really matter that much. They might ask a question about it at most, but they aren't going to deny a mortgage to a good applicant because of a one-off tiny overdraft.

    You don't need to be married. If you're borrowing from an Irish bank, you should talk to them about it. For AIB at least, they will set up a current account and waive the fees as long as you use it to pay back the mortgage with them. My partner and I plan to do this if/when our house sale finally goes through. Not sure about other banks but they may have similar policies.



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    You can open it in any bank, and you don't need to be married. Technically there's nothing to stop you and I opening a joint account.



  • Moderators, Education Moderators Posts: 5,028 Mod ✭✭✭✭G_R


    You'll be liable for a break funding fee so - this amount can change daily depending on the prevailing cost of funds (and can be 0 if it's not costing the bank anything), so I can't give you an idea as to what it will cost, the the forumla above is what will be used to calculate it.



  • Registered Users Posts: 170 ✭✭bleaks


    Do all banks start giving out exemptions from early January?

    Anyone know if you're better off waiting until then to apply, or could you apply in December for one?

    Finally, do Haven and Avast also offer exemptions beyond 3.5?



  • Registered Users, Registered Users 2 Posts: 2,656 ✭✭✭C14N


    Different banks have different policies. KBC and Permenant TSB at least seem to use theirs up on a first-come first-serve basis. I remember there were articles a few months back saying they had run out of theirs for the rest of the year. AIB don't, they try to distribute them fairly evenly over the course of the year. They have different policies on giving them out too. KBC will give you approval quickly enough for 3.5x, but if you want to get your 4.5x exception, they will only give it for a specific property, which is quite unhelpful imo, and probably slows things down quite a bit when you do start bidding.



  • Registered Users Posts: 170 ✭✭bleaks


    Anyone know if Haven and Avant offer exemptions beyond 3.5x?



  • Registered Users, Registered Users 2 Posts: 2,656 ✭✭✭C14N


    Afaik, all of them do, but you'd get a more solid answer if you ask a broker who deals with them.



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