Saving/Applying for a mortgage 2015/16/17/18/19

limnam · 22-02-2020 5:45pm

Abbey127 wrote: »

Hi has anyone in here built there own house, myself and my partner are hoping to build on land my parents own ,

Also do you just need to be in employment for 6 months with 6 months bank statements from your job . I have 10k saved up and my partner has 20k

Thanks in advance

In general yes, best thing to is sit down with your bank or mortgage adviser and they'll let you know what's required in your circumstances.

bulmersgal · 25-02-2020 11:29am

Hey

I'm just at the start of saving for a mortgage, I have one credit union loan for 9k that I need to reduce. I'm a single mother with one child and earn 55k from speaking to a mortgage broker he said that I could keep the loan and still get approved. I would like to try get an exemption to x4 so that I can buy something close to 250k, as I want to buy in north kildare. My thinking at the moment is to save as much as possible and have my deposit for the summer and then if bank request it clear the loan before I draw down. What is peoples experiences of doing this?

tobsey · 25-02-2020 11:46am

bulmersgal wrote: »

Hey

I'm just at the start of saving for a mortgage, I have one credit union loan for 9k that I need to reduce. I'm a single mother with one child and earn 55k from speaking to a mortgage broker he said that I could keep the loan and still get approved. I would like to try get an exemption to x4 so that I can buy something close to 250k, as I want to buy in north kildare. My thinking at the moment is to save as much as possible and have my deposit for the summer and then if bank request it clear the loan before I draw down. What is peoples experiences of doing this?

You'll find it very difficult to get an exemption when you have other outstanding loans. The banks are much stricter on their affordability checks for exemptions. You'll need to have at a guess 2.5k - 3k per month after the mortgage stress tested at 5-6% and all other commitments. A mortgage of 200k at that rate could be over 1k per month depending on term so you'd have to have net income of 3.5k - 4k per month. To be honest I think you'll struggle if you don't remove all borrowings and show good savings history. It's still worth talking to the brokers and see what they can get for you.

Woshy · 25-02-2020 11:55am

I was going to say the same thing. Having a loan reduces what the bank thinks you can comfortable afford monthly and will therefore reduce the amount they are willing to lend you. I think you will struggle getting an exemption with an outstanding loan.

bulmersgal · 25-02-2020 12:01pm

tobsey wrote: »

You'll find it very difficult to get an exemption when you have other outstanding loans. The banks are much stricter on their affordability checks for exemptions. You'll need to have at a guess 2.5k - 3k per month after the mortgage stress tested at 5-6% and all other commitments. A mortgage of 200k at that rate could be over 1k per month depending on term so you'd have to have net income of 3.5k - 4k per month. To be honest I think you'll struggle if you don't remove all borrowings and show good savings history. It's still worth talking to the brokers and see what they can get for you.

Woshy wrote: »

I was going to say the same thing. Having a loan reduces what the bank thinks you can comfortable afford monthly and will therefore reduce the amount they are willing to lend you. I think you will struggle getting an exemption with an outstanding loan.

Thank you both for the advice, I think I will just try clear it before I go for the mortgage. I'm able to save 2.1k at the moment, so it would just set me back a few months which isn't the worst thing in the world. My net income is 3.4k excluding children allowance, I don't have any childcare expenses. So I should just about pass the stress test.

Another question I've signed up for a work pension so it will be getting reduced should I postpone this pension till I get the mortgage or what way does it work.

Woshy · 25-02-2020 12:15pm

bulmersgal wrote: »

Thank you both for the advice, I think I will just try clear it before I go for the mortgage. I'm able to save 2.1k at the moment, so it would just set me back a few months which isn't the worst thing in the world. My net income is 3.4k excluding children allowance, I don't have any childcare expenses. So I should just about pass the stress test.

Another question I've signed up for a work pension so it will be getting reduced should I postpone this pension till I get the mortgage or what way does it work.

When we got our mortgage the first time and things were a lot tighter the banks wanted a letter from my husband's job to say he could opt out of his pension. He couldn't, so that reduced the amount that the bank were willing to lend us. In your position, given our experience I would postpone it would not sure that's the best financial advice long-term! It's just what I'd do

Techn0 · 26-02-2020 11:22am

bulmersgal wrote: »

Thank you both for the advice, I think I will just try clear it before I go for the mortgage. I'm able to save 2.1k at the moment, so it would just set me back a few months which isn't the worst thing in the world. My net income is 3.4k excluding children allowance, I don't have any childcare expenses. So I should just about pass the stress test.

Another question I've signed up for a work pension so it will be getting reduced should I postpone this pension till I get the mortgage or what way does it work.

Hi bulmersgal,

Just on the pension piece - I literally went through this myself very recently when speaking to a broker. Was looking for an exemption also and on my first round was denied. Broker said pension (was paying 7% of my gross) was going against my affordability. He recommended that I either:

1) Get a letter from my employer stating that the pension is voluntary (i.e. I'm paying at my discretion) and I can opt out at any time or;
2) Reduce my pension payments for the time being to help with affordability

I ended up going with 2) even though it is the more costly option. I think the banks prefer to just see the extra income on the payslip rather than back and forth with letters etc.

Hope this helps.

bulmersgal · 26-02-2020 11:38am

Techn0 wrote: »

Hi bulmersgal,

Just on the pension piece - I literally went through this myself very recently when speaking to a broker. Was looking for an exemption also and on my first round was denied. Broker said pension (was paying 7% of my gross) was going against my affordability. He recommended that I either:

1) Get a letter from my employer stating that the pension is voluntary (i.e. I'm paying at my discretion) and I can opt out at any time or;
2) Reduce my pension payments for the time being to help with affordability

I ended up going with 2) even though it is the more costly option. I think the banks prefer to just see the extra income on the payslip rather than back and forth with letters etc.

Hope this helps.

Thanks so much. Did you just cancel it before you went for the mortgage. My employer matches my contribution so I would like to keep it as long as I can and then just stop until mortgage is drawn down.

Techn0 · 26-02-2020 1:51pm

bulmersgal wrote: »

Thanks so much. Did you just cancel it before you went for the mortgage. My employer matches my contribution so I would like to keep it as long as I can and then just stop until mortgage is drawn down.

I'm currently going through the mortgage process myself so opted out this month (with a view to drawing down in the summer). I'm essentially foregoing around 5 months of pension payments. I'm in the same boat, I'm losing out on my matched ER contributions and tax savings of my EE contributions. But it's a short term pain for a long term gain.

Shelga · 26-02-2020 7:57pm

I have about €33k in a combination of savings and gift from parents, which I’m lucky to have. I’m on just under €60k in a very stable company, which I would have thought gave me a decent shot at an exemption.

However, spoke to 2 banks/brokers in the last week and the chances seem minimal. I don’t really understand how they calculate whether you should get one or not, and I’m a bit disappointed as my friend was easily granted one two years ago, on about €5k less than me at the time.

This gives me a mortgage of €202k, meaning my total budget is about €235k.

Ideally I want a 2 bed apartment, in cycling distance of work (<10km). There’s barely anything out there at the moment in this bracket on the northside.

Just feels like you’re totally screwed if you’re single, as if it’s not ****ty enough already.

Anyone else fed up of having their lives on hold in their 30s, saving for a shoebox?

smndly · 26-02-2020 8:25pm

Hi, does anyone know if banks take into account additional contract work? I have a salaried job but I often take up the option to do extra evening and weekend shifts as an independent contractor which is well paid. Will the bank look at 3.5 times my salary or 3.5 times my salary plus contracting income?

TIA

lir6777 · 26-02-2020 8:25pm

Shelga wrote: »

I have about €33k in a combination of savings and gift from parents, which I’m lucky to have. I’m on just under €60k in a very stable company, which I would have thought gave me a decent shot at an exemption.

However, spoke to 2 banks/brokers in the last week and the chances seem minimal. I don’t really understand how they calculate whether you should get one or not, and I’m a bit disappointed as my friend was easily granted one two years ago, on about €5k less than me at the time.

This gives me a mortgage of €202k, meaning my total budget is about €235k.

Ideally I want a 2 bed apartment, in cycling distance of work (<10km). There’s barely anything out there at the moment in this bracket on the northside.

Just feels like you’re totally screwed if you’re single, as if it’s not ****ty enough already.

Anyone else fed up of having their lives on hold in their 30s, saving for a shoebox?

I hear you Shelga! It's really difficult as a single applicant, the house prices are way out of reach on your own if you want to be anywhere near one of the major cities.

aqn29swlgbmiu4 · 26-02-2020 9:03pm

Hey Shelga, I'm in a similiar boat.
It's so frustrating being penalised for being single.

I've been renting since I was 16 and have paid over 100 grand in rent to date, it's so frustrating that this isn't taken into account when trying to get a mortgage now.

lir6777 · 26-02-2020 9:09pm

Lila Tinkling Fishnet wrote: »

Hey Shelga, I'm in a similiar boat.
It's so frustrating being penalised for being single.

I've been renting since I was 16 and have paid over 100 grand in rent to date, it's so frustrating that this isn't taken into account when trying to get a mortgage now.

Oh that's a grim calculation

and rents only getting higher

iba · 26-02-2020 10:10pm

Hi,
I'm looking for a mortgage that I can pay lump sums off when I want (in addition to paying monthly repayments).
I looked on bonkers.ie at all the different mortgage types available, but couldn't spot one that fits what I want.
I would be grateful if anyone could point me in the right direction please.
Thanks.

AlmightyCushion · 26-02-2020 10:15pm

iba wrote: »

Hi,
I'm looking for a mortgage that I can pay lump sums off when I want (in addition to paying monthly repayments).
I looked on bonkers.ie at all the different mortgage types available, but couldn't spot one that fits what I want.
I would be grateful if anyone could point me in the right direction please.
Thanks.

A variable rate means you can pay off as much as you want whenever you want with no penalties. Some fixed rate mortgages (Ulster Bank and KBC are 2 I know of) allow you to pay off a certain amount with no breakage fees, others don't.

Fireball81 · 26-02-2020 10:19pm

iba wrote: »

Hi,
I'm looking for a mortgage that I can pay lump sums off when I want (in addition to paying monthly repayments).
I looked on bonkers.ie at all the different mortgage types available, but couldn't spot one that fits what I want.
I would be grateful if anyone could point me in the right direction please.
Thanks.

You need a variable rate mortage - most if not all lenders offer them.

Im most cases, a fixed rate mortgage doesn't allow additional repayments.

OEP · 26-02-2020 10:21pm

If you book an appointment with a mortgage adviser in one of the banks, what will they go through with me? Basically all I want to know is if they'll give me a mortgage at my current level of savings in a few months time - will they do this?

IvoryTower · 26-02-2020 11:26pm

OEP wrote: »

If you book an appointment with a mortgage adviser in one of the banks, what will they go through with me? Basically all I want to know is if they'll give me a mortgage at my current level of savings in a few months time - will they do this?

Yes, they can do it over the phone either. I rang them 5 months ago, they said you need to save x amount for 6 months and then you're good to go.

tomister · 27-02-2020 12:13am

iba wrote: »

Hi,
I'm looking for a mortgage that I can pay lump sums off when I want (in addition to paying monthly repayments).
I looked on bonkers.ie at all the different mortgage types available, but couldn't spot one that fits what I want.
I would be grateful if anyone could point me in the right direction please.
Thanks.

I know bank of Ireland give the option of splitting the mortgage into 2 whereby one part is a fixed rate and the other is variable. You can then over pay the variable portion as much as you want without penalty

Daveone · 27-02-2020 1:14pm

I am in the market for a mortgage this year to buy a home with my partner. Thankfully we are in a good financial place for this, with good salaries, savings and no dependents (yet). We are both in our early 30s

I had until recently been quite steadfast in the idea that I did not want to go for a very long term mortgage (30 years +) as I didn't want that on my plate in my 60s. But are we better off going for a long term mortgage like this, to allow for a lower initial repayment, and then after the initial fixed period accelerate payments to cut the life span?

If I pay off a 30 year mortgage in 15-20, do I only pay the interest I have accrued?

Many thanks

tolow · 27-02-2020 6:12pm

Hi,

looking for some opinions on income, I receive a yearly taxable allowance of 3000 euro which is taxable for health benefits. My company would not record this figure on my salary cert though as it is not guaranteed.

My question is would banks consider this as income? It can be seen on payslips for the last two years f employment. My broker said it needs to be on the cert but wondering if anyone has had similar and had income taken into account that wasn't on a salary cert?

awec · 27-02-2020 8:14pm

Daveone wrote: »

I am in the market for a mortgage this year to buy a home with my partner. Thankfully we are in a good financial place for this, with good salaries, savings and no dependents (yet). We are both in our early 30s

I had until recently been quite steadfast in the idea that I did not want to go for a very long term mortgage (30 years +) as I didn't want that on my plate in my 60s. But are we better off going for a long term mortgage like this, to allow for a lower initial repayment, and then after the initial fixed period accelerate payments to cut the life span?

If I pay off a 30 year mortgage in 15-20, do I only pay the interest I have accrued?

Many thanks

Yes. Mortgage interest accrues daily, so if you pay a 30 year mortgage off in 15 years you have only paid 15 years worth of interest.

The advantage to taking a longer term mortgage and overpaying is that you have a safety net to fall back on if you ever need to reduce your payments for whatever reason, and you don't need the approval of the bank to do this.

The disadvantage is that if you want to overpay you may be limited by the interest rate options available to you. Generally, fixed terms either don't allow overpayments, or only allow overpaying by a certain percent. If you want to overpay by a lot (and paying a mortgage off in half the agreed time is overpaying by a lot) then you may have to stick to variable rates, which are not bad at all right now, but you're more immediately susceptible to rate changes.

Creamy Goodness · 28-02-2020 8:12am

tolow wrote: »

Hi,

looking for some opinions on income, I receive a yearly taxable allowance of 3000 euro which is taxable for health benefits. My company would not record this figure on my salary cert though as it is not guaranteed.

My question is would banks consider this as income? It can be seen on payslips for the last two years f employment. My broker said it needs to be on the cert but wondering if anyone has had similar and had income taken into account that wasn't on a salary cert?

No income has to be guaranteed for it to be counted. However AIB were willing to take 50% of my non-guaranteed income into account because I got it 3 years in a row.

Interested Observer · 28-02-2020 8:19am

awec wrote: »

Yes. Mortgage interest accrues daily, so if you pay a 30 year mortgage off in 15 years you have only paid 15 years worth of interest.

The advantage to taking a longer term mortgage and overpaying is that you have a safety net to fall back on if you ever need to reduce your payments for whatever reason, and you don't need the approval of the bank to do this.

The disadvantage is that if you want to overpay you may be limited by the interest rate options available to you. Generally, fixed terms either don't allow overpayments, or only allow overpaying by a certain percent. If you want to overpay by a lot (and paying a mortgage off in half the agreed time is overpaying by a lot) then you may have to stick to variable rates, which are not bad at all right now, but you're more immediately susceptible to rate changes.

I know some banks allow you to put part of the mortgage on a fixed rate and part of it on variable, KBC offered this to us definitely and I think BOI might allow it too. So you can pay off whatever you like of the variable portion.

ebayissues · 28-02-2020 5:22pm

Has anyone gotten an exception from kbc/ recently renewed their exception or just drawdown on a mortgage?

tolow · 28-02-2020 5:26pm

ebayissues wrote: »

Has anyone gotten an exception from kbc/ recently renewed their exception or just drawdown on a mortgage?

I haven't done either but wondering how long your exception lasts with KBC.

I've applied through a broker, not for an exception but wondering if we have approval in principle for no exception and then later ask for an exception is it like a new application?

ebayissues · 28-02-2020 5:33pm

tolow wrote: »

I haven't done either but wondering how long your exception lasts with KBC.

I've applied through a broker, not for an exception but wondering if we have approval in principle for no exception and then later ask for an exception is it like a new application?

I got an AIP which was an exception till the end of this month. Was going to renew it but wondering if anyone has done so.

Boozybooze · 28-02-2020 5:39pm

Any advice for a single applicant. Ill be applying in three months time. No loans, moved back in with parents 12 months ago and been keeping my account squeaky clean for the last six months.

House Price: 195000
Salary: 50K
Savings when applying: 40K

Thanks

lfen · 28-02-2020 5:44pm

Boozybooze wrote: »

Any advice for a single applicant. Ill be applying in three months time. No loans, moved back in with parents 12 months ago and been keeping my account squeaky clean for the last six months.

House Price: 195000
Salary: 50K
Savings when applying: 40K

Thanks

Best advice we got was to prove we could afford the monthly repayment through savings. Like you, we had a lump sum so planned to save €1000 monthly. I called a broker to just run it by them and he said that our repayment would be €1400 based on how much we wanted to borrow, so to actually save €1700 to show we can more than afford it. Great advice I thought.

Saving/Applying for a mortgage 2015/16/17/18/19

Comments