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Getting a mortgage with 2 dependants

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    #32
    zreba
    Registered Users Posts: 170 ✭✭zreba


    PCros wrote: »
    I still think its a bit flawed and it should be included into the overall amount of the loan to begin with for everyone.

    It would be an interesting statistic to know how many couples have children pre/post mortgage application.

    Couple A can make 2 more babies in the next 2 years while Couple B may have none.


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    #33
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    Gee_G wrote: »
    Thank you all for your replies.
    We are dealing with a broker at the moment after being told by a bank that they would only give us less than half the value of the house we want to buy. It just seems a bit bizarre to me, I understand dependants obviously do put a reasonable strain on finances but to make a €50k difference is a bit much considering it's only a small mortgage we're looking for (we live in the country).
    Anyway, I guess it's back to the drawing board for a while!

    I think the bank are saying your two dependents result in a 50 k reduction calculated as follows:

    50k divided by 2 is 25k

    25k divided by 3.5 (ie you can borrow 3.5 times your salary) is 7,142.86

    Thus each dependent is costing you 7,142.86 gross salary per year or about 3.4k to 6k net depending on your tax brackets.

    For the 3.4k thats about 65 euro (net) for a single dependent a week

    Dont know if thats fair or not as I dont currently have a dependent


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    #34
    lawred2
    Registered Users Posts: 24,288 ✭✭✭✭lawred2


    JJJackal wrote: »
    I think the bank are saying your two dependents result in a 50 k reduction calculated as follows:

    50k divided by 2 is 25k

    25k divided by 3.5 (ie you can borrow 3.5 times your salary) is 7,142.86

    Thus each dependent is costing you 7,142.86 gross salary per year or about 3.4k to 6k net depending on your tax brackets.

    For the 3.4k thats about 65 euro (net) for a single dependent a week

    Dont know if thats fair or not as I dont currently have a dependent

    I'm not sure that makes sense... a mortgage wouldn't be over one year. That 50K (plus interest) could be over 30 years.


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    #35
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    maxsmum wrote: »
    Our creche fees and child benefit don't Appear anywhere on our bank account. It just occurred to me I doubt the bank would know. Although it would be dishonest not to declare a child I agree. Not sure it would be fraud? As in a criminal offence?

    http://www.irishstatutebook.ie/eli/2001/act/50/enacted/en/print

    Look at Sections 6, 10 & 11.
    Absolutely, the offences would be made out.
    Section 4 (6) (6) A person guilty of theft is liable on conviction on indictment to a fine or imprisonment for a term not exceeding 10 years or both.


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    #36
    detoxkid
    Registered Users Posts: 621 ✭✭✭detoxkid


    We got a mortgage recently with Ulster bank and we have two kids. We were offered 3.5 times our combined salary in principal which we didn't avail of because we didn't need that much. We had a 20% deposit which we had saved ourselves and really a really good savings record for 6 months when we went to apply. I did find them awkward to deal with towards the end but had nothing to do with the amount they were willing to lend us. I don't know if Ulster Bank go through brokers so it could be useful to approach them separately


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    #37
    jlm29
    Registered Users Posts: 3,818 ✭✭✭jlm29


    PCros wrote: »
    Can anyone comment on this as I've always wondered about it.

    Couple A has 2 kids and gets €50k less.
    Couple B has no kids, gets €50k more but will have 2 kids in 2 years.

    Wheres the common sense?

    Couple B have the option of changing their family plans if they think they might struggle to pay their mortgage. They may decide to only have one child, or maybe they had planned on 4 but know that’s not possible now. Couple A, however, are unlikely to be able to give back a child if they’re struggling.


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    #38
    The_Honeybadger
    Registered Users Posts: 4,155 ✭✭✭The_Honeybadger


    JJJackal wrote: »
    I think the bank are saying your two dependents result in a 50 k reduction calculated as follows:

    50k divided by 2 is 25k

    25k divided by 3.5 (ie you can borrow 3.5 times your salary) is 7,142.86

    Thus each dependent is costing you 7,142.86 gross salary per year or about 3.4k to 6k net depending on your tax brackets.

    For the 3.4k thats about 65 euro (net) for a single dependent a week

    Dont know if thats fair or not as I dont currently have a dependent

    In our case they took off €250 per month per child off our net income plus whatever childcare costs were. They then deducted a further €2k for living expenses.

    Whatever was left over from net income was deemed to be what we could afford as a mortgage repayment and the mortgage we were offered was calculated from that.

    I can see the logic in it in fairness. We had a very low ltv but they said there was no exceptions. We only found what we wanted within what we were offered because we are in a rural area with relatively cheap housing.


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    #39
    ted1
    Registered Users Posts: 23,297 ✭✭✭✭ted1


    irelandrover wrote: »
    One couple has 2 kids when applying and the other has none.
    The bank doesnt base its offer on what it guesses happens in the future

    They do stress test. Which looks at the future...


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    #40
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    lawred2 wrote: »
    I'm not sure that makes sense... a mortgage wouldn't be over one year. That 50K (plus interest) could be over 30 years.

    But the bank make the decision based on one year eg the total amount you can borrow is salary by 3.5 times your income in one year - obviously the amount is paid off over 30 years


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    #41
    fjon
    Registered Users Posts: 2,084 ✭✭✭fjon


    We found that KBC was the most favourable (2 kids). But yeah, made things a lot more difficult than applying without kids.
    Iirc, they took a flat 400e per child off our monthly salary.


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