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

myshirt · 08-06-2019 8:24pm

Plasandrunt wrote: »

Hey just looking for some advice from someone in a similar position or someone in the know.

I'm 32, single and no dependants. Earn 35k per year. I bought an appartment 3 years ago with cash from money recieved from the death of a relative. Appartment is worth around 225k. I'd like to start saving for a mortgage so I can buy my own house and bookmarked from next month to start saving 1k a month (looking for mortgage of 120k)

I went through a sticky period financially for a few months around 4 years ago and defaulted on an AIB loan, once I got back on my feet I restructured the loan and paid it off in 2018, 2 years before schedule. However the ICB report states that it stays on my record until 2023 despite me defaulting 2015/2016.

With the sale of my property I'd hold a greater equity so then the value of the mortgage so would the banks take that into consideration? I haven't gone to a broker yet because I haven't started saving yet. Is there any point in going to one or will i wait until I've a few quid put away?

You will never, and I mean never, get a mortgage off AIB given you defaulted on a loan. It's just not surmountable. In the UK it is, but you'll feel a bit of sting. In Ireland it isn't possible to get a mortgage with a bank you previously stung, even if it was for 500 quid. Banks are insanely sensitive about credit risk given their experience in the past.

I would say to you do not apply for any credit with a bank you may want a mortgage from until the loan is gone off your record, as they will run a credit report and then have it on file for 7 years. Again, if any bank knows you defaulted then same story. They couldn't give a flying f*ck how much it was for and how long ago it was, it will never make it past underwriting. You could be looking for 50% LTV on a 3 bed semi in a great part of Dublin (i.e strong security for the bank), have great savings records and excellent credit behavior since the default, it doesn't matter.

Now, banks may ask on an application form anyway "did you ever default" and you have to answer honestly. It's a conundrum as if you answer honestly as you will not get the loan.

Let it be a lesson for anyone, don't ever default on a loan. Make some level of payment as you will eventually recover your creditworthiness, but if you are marked as having defaulted then it's curtains I'm afraid.

Plasandrunt · 09-06-2019 9:21am

Thanks for your reply even if it's a right kick In the balls.

Is there even any point in me gearing towards saving for a mortgage so?

deisedude · 09-06-2019 10:06am

Plasandrunt wrote: »

Thanks for your reply even if it's a right kick In the balls.

Is there even any point in me gearing towards saving for a mortgage so?

Maybe meet with a mortgage broker and tell them the state of play and see what your options are from there

dudara · 09-06-2019 10:09am

Plasandrunt wrote: »

Thanks for your reply even if it's a right kick In the balls.

Is there even any point in me gearing towards saving for a mortgage so?

Definitely meet with a mortgage broker, as this is the kind of situation they should be able to help with. Ask your friends &colleagues for recommendations.

pnecilcaser · 09-06-2019 1:41pm

Has anyone had any experience with the following situation:

- You buy a house as a first time buyer and live in it while you pay off you mortgage.

- You finish paying off you mortgage and want to buy another house.

- You convert the house you already have to an "investment property" by moving out and putting it up for rent with PRTB registration

... can you then apply for a residential rate mortgage on the new house you will buy to live in?

Musefan · 09-06-2019 9:01pm

Creamy Goodness wrote: »

It’s difficult to get approval on probation doesn’t matter the bank.

The bank will not care that your salary will improve over time they do the check based on your current salary and previous account activity.

Hey, thanks for your reply! Interestingly, the advisor in ulster bank emailed me to clarify that it won't count against me at all as the role is similar, and that probation won't matter because it's more of a lateral move e.g. moving from X to X in another organisation as opposed to X to Y.

myshirt · 09-06-2019 9:21pm

Plasandrunt wrote: »

Thanks for your reply even if it's a right kick In the balls.

Is there even any point in me gearing towards saving for a mortgage so?

Hey, listen, don't fret. You can work your way through it but it's going to take some planning. Go meet with a financial planner or a mortgage broker and tell them the story. You can put in place a 2 to 3 year plan specific to your scenario. Not many people realise how bad it is to default on a loan when it comes to getting a mortgage. You are certainly a write off with AIB, but don't mess it up by applying for a mortgage with anyone else until you speak to someone who can help you. Say for example you waited until 1 month before it was due to come off, you'll basically reset the clock 7 years with that bank all for the sake of 1 month. Wait until it's gone off your report.

drunkmonkey · 09-06-2019 9:43pm

pnecilcaser wrote: »

... can you then apply for a residential rate mortgage on the new house you will buy to live in?

Yes

Mrnew · 12-06-2019 3:29pm

I have recently applied for a mortgage but the bank is questioning a loan and what it was used for even tho it was over 9 months ago I thought they only check 6 months bank statements. Loan has since been cleared so is no relevance to application. Any ideas ?

awec · 12-06-2019 3:31pm

Mrnew wrote: »

I have recently applied for a mortgage but the bank is questioning a loan and what it was used for even tho it was over 9 months ago I thought they only check 6 months bank statements. Loan has since been cleared so is no relevance to application. Any ideas ?

They can go back as far as they want.

You are free to refuse to tell them what it was for, and then they are free to refuse you a mortgage.

FitzElla · 12-06-2019 3:33pm

Mrnew wrote: »

I have recently applied for a mortgage but the bank is questioning a loan and what it was used for even tho it was over 9 months ago I thought they only check 6 months bank statements. Loan has since been cleared so is no relevance to application. Any ideas ?

Was there any missed or late payments for the loan? They would still show up on a credit report even if the loan is now cleared.

TheShow · 12-06-2019 3:35pm

pnecilcaser wrote: »

Has anyone had any experience with the following situation:

- You buy a house as a first time buyer and live in it while you pay off you mortgage.

- You finish paying off you mortgage and want to buy another house.

- You convert the house you already have to an "investment property" by moving out and putting it up for rent with PRTB registration

... can you then apply for a residential rate mortgage on the new house you will buy to live in?

Yes.

TheShow · 12-06-2019 3:39pm

Mrnew wrote: »

I have recently applied for a mortgage but the bank is questioning a loan and what it was used for even tho it was over 9 months ago I thought they only check 6 months bank statements. Loan has since been cleared so is no relevance to application. Any ideas ?

Standard question when assessing a mortgage application.
You took out a loan 9 months ago and since cleared it, a little unusual behaviour to be honest.

Mrnew · 12-06-2019 3:48pm

TheShow wrote: »

Standard question when assessing a mortgage application.
You took out a loan 9 months ago and since cleared it, a little unusual behaviour to be honest.

it was only a small loan and I just cleared it now as I wanted no loan applying for a mortgage,

Mrnew · 12-06-2019 3:50pm

Thanks guys there was no missed payments just got me worried when they were questioning it.

awec · 12-06-2019 3:51pm

Mrnew wrote: »

Thanks guys there was no missed payments just got me worried when they were questioning it.

They just want to make sure the loan wasn't to pay off your debt to big Paddy the loan shark from down the street.

TheShow · 12-06-2019 4:02pm

Mrnew wrote: »

it was only a small loan and I just cleared it now as I wanted no loan applying for a mortgage,

just tell them the truth so.

skippy123! · 12-06-2019 10:18pm

Hey guys,

I'm in the situation where an EA for a new build is asking that contracts are signed within 21 days after paying the initial deposit. Is this a normal practice? I am 100% sure I want to buy the place but still waiting for divorce papers which are preventing me of actually signing the contracts.

el Fenomeno · 13-06-2019 8:13am

skippy123! wrote: »

Hey guys,

I'm in the situation where an EA for a new build is asking that contracts are signed within 21 days after paying the initial deposit. Is this a normal practice? I am 100% sure I want to buy the place but still waiting for divorce papers which are preventing me of actually signing the contracts.

Standard practice, but any decent solicitor will get you an extra 2/3 weeks.

We needed some time, and our solicitor just told the vendor's solicitor that she was on holiday for 2 weeks.

Phileas Frog · 13-06-2019 8:23am

Yes, that's normal

Mrnew · 13-06-2019 12:58pm

All is well after a few more queries we got approved today delighted. We have already viewed the house we wanted twice so have put an offer in.

Misssally · 16-06-2019 9:58pm

We've got underwritten AIP and just sale agreed our place. our solicitor has just told us we have upfront costs for the MUD act replies and land registry compliant map, will this affect our mortgage application if I pay for them from my savings as it will reduce the average saved over the past 6 months?

TheShow · 17-06-2019 10:48am

Have you not already factored these costs in your solicitors fees?
it shouldn't affect your mortgage application as its related to the property sale/purchase, and thats what the savings are for...

Misssally · 17-06-2019 10:56am

TheShow wrote: »

Have you not already factored these costs in your solicitors fees?
it shouldn't affect your mortgage application as its related to the property sale/purchase, and thats what the savings are for...

Not the architect fees for the map, I didn't know that was a thing but I did allow for extras within the fees so the money is there but its more the upfront costs of both in a month. I couldn't pay both of them and still save the same amount I have been saving. Good to know it should be ok. thanks

deisedude · 17-06-2019 12:18pm

Getting really frustrated with the bank. Everything is taking ages. Waiting on the formal loan offer and there is nothing on our side thats holding it up. Being put under pressure by the developers to sign the contracts now. Anything we can do to speed them up or just have to wait and be patient?

The Satanist · 17-06-2019 6:32pm

Quick question; if a couple currently living in commuter-land with 2 cars which are needed for work, are planning to move to close to Dublin city centre which will allow them to get rid of one car... would a bank take this into account when calculating monthly outgoings.

What I mean is: can you say to them that the car costs €X per month, this will now be reduced to zero - similar to how current rent paid can be taken into account?

niamhzie · 17-06-2019 6:36pm

deisedude wrote: »

Getting really frustrated with the bank. Everything is taking ages. Waiting on the formal loan offer and there is nothing on our side thats holding it up. Being put under pressure by the developers to sign the contracts now. Anything we can do to speed them up or just have to wait and be patient?

Could be a natural backlog with the underwriting team, summer is when most people are househunting, combined with staff who could be on annual leave. No harm phoning your mortgage broker or adviser and asking for an update? See if they can advise how what the wait time is, ask again if there's any outstanding paperwork your end, just in case.

awec · 17-06-2019 6:50pm

The Satanist wrote: »

Quick question; if a couple currently living in commuter-land with 2 cars which are needed for work, are planning to move to close to Dublin city centre which will allow them to get rid of one car... would a bank take this into account when calculating monthly outgoings.

What I mean is: can you say to them that the car costs €X per month, this will now be reduced to zero - similar to how current rent paid can be taken into account?

Bank will take your circumstances as they are right now, they don't work against speculation in the future.

alwald · 17-06-2019 8:48pm

The Satanist wrote: »

Quick question; if a couple currently living in commuter-land with 2 cars which are needed for work, are planning to move to close to Dublin city centre which will allow them to get rid of one car... would a bank take this into account when calculating monthly outgoings.

What I mean is: can you say to them that the car costs €X per month, this will now be reduced to zero - similar to how current rent paid can be taken into account?

I agree with the above comment, and I will add that you shouldn't trust the mortgage advisor in the bank. They will tell you a lot of bull**** about how much you can borrow, and so on, but the decision making sits with the underwriting team.

z0oT · 18-06-2019 9:32am

deisedude wrote: »

Getting really frustrated with the bank. Everything is taking ages. Waiting on the formal loan offer and there is nothing on our side thats holding it up. Being put under pressure by the developers to sign the contracts now. Anything we can do to speed them up or just have to wait and be patient?

Is there a reason you need to wait until you've a formal loan offer from the bank to sign the contracts?

Unless your solicitor is asleep at the wheel, he/she should have gotten a "Subject to Loan Offer" clause inserted into the contract.

As long as the "Subject to Loan Offer" clause is in the contracts, I wouldn't have thought you'd have to wait if it's taking a long time. You should be able to just go ahead, sign contracts, and then sort out the loan offer at a later date. If it's a new build, you'll probably have a long wait anyway.

deisedude · 18-06-2019 9:42am

z0oT wrote: »

Is there a reason you need to wait until you've a formal loan offer from the bank to sign the contracts?

Unless your solicitor is asleep at the wheel, he/she should have gotten a "Subject to Loan Offer" clause inserted into the contract.

As long as the "Subject to Loan Offer" clause is in the contracts, I wouldn't have thought you'd have to wait if it's taking a long time. You should be able to just go ahead, sign contracts, and then sort out the loan offer at a later date. If it's a new build, you'll probably have a long wait anyway.

If anything went wrong we would lose the deposit on the house once we sign the contract. I mean nothing should but don't want to take a chance either.

Will give the bank a ring today and see whats up

el Fenomeno · 18-06-2019 9:44am

deisedude wrote: »

If anything went wrong we would lose the deposit on the house once we sign the contract. I mean nothing should but don't want to take a chance either.

Will give the bank a ring today and see whats up

Have you asked your solicitor to get a Subject to Loan clause inserted?

The vendor won't put it in without being pressed, and usually they don't put up much resistance.

If our experience is anything to go by, it's a fairly quick and easy thing for them to update.

elizunia87 · 18-06-2019 10:46am

Hi Guys.

We will be mortgage approval in two weeks i believe but the money we will be able to withdraw in September when finished probatuon.

What if we like the house. Is it possible to sale agreed with mortgage approval but money Will be taken in september? I know this things take Time and i dont think we will agree on the house So Quick and we still want to apply for rebuilding ireland. Just in a case if we dont want to wait any longer.

Thanks

GingerLily · 18-06-2019 10:55am

el Fenomeno wrote: »

deisedude wrote: »

If anything went wrong we would lose the deposit on the house once we sign the contract. I mean nothing should but don't want to take a chance either.

Will give the bank a ring today and see whats up

Have you asked your solicitor to get a Subject to Loan clause inserted?

The vendor won't put it in without being pressed, and usually they don't put up much resistance.

If our experience is anything to go by, it's a fairly quick and easy thing for them to update.

This is not the case for a lot of developers recently. A lot of people in this forum were not able to get this clause added in when buying NEW developments.

DemocAnarchis · 18-06-2019 12:18pm

Quick question - at what point in the process do I need to actually contact/organise a solicitor? Looking to put an offer in any day now, but have never had any dealings with a solicitor. Do I need them lined up before I put an offer in?

z0oT · 18-06-2019 12:24pm

deisedude wrote: »

If anything went wrong we would lose the deposit on the house once we sign the contract. I mean nothing should but don't want to take a chance either.

Will give the bank a ring today and see whats up

That's the whole point of the "Subject to Loan Offer" clause. If anything goes wrong with the mortgage like you can't get a loan offer, the bank goes bust, your circumstances change and you can't do the final draw down etc. You will get your deposit back.

That's why if you have a "Subject to Loan Offer" clause in the contracts you should be 100% covered to proceed and sign anyway even though you don't have the formal Loan Offer yet.

Check with your solicitor to see if they're happy for you to sign rather than the bank.

In our case I had the Auctioneer pressing us to sign contracts telling us we were the last in the row to sign them, the loan offer wasn't the cause of the delay for us since our solicitor held firm as there was still stuff he wanted to clarify in the contracts.

We signed maybe a month after they wanted us to sign. No issues in the end.

el Fenomeno wrote: »

The vendor won't put it in without being pressed, and usually they don't put up much resistance.

If our experience is anything to go by, it's a fairly quick and easy thing for them to update.

GingerLily wrote: »

This is not the case for a lot of developers recently. A lot of people in this forum were not able to get this clause added in when buying NEW developments.

We had no issue getting the Subject to Loan Offer clause inserted either. It should be a pretty routine thing. Any solicitor worth their salt should be insisting on it being inserted.

voluntary · 18-06-2019 12:25pm

DemocAnarchis wrote: »

Quick question - at what point in the process do I need to actually contact/organise a solicitor? Looking to put an offer in any day now, but have never had any dealings with a solicitor. Do I need them lined up before I put an offer in?

No, you'll need one short after your offer is accepted.

GingerLily · 18-06-2019 12:39pm

z0oT wrote: »

We had no issue getting the Subject to Loan Offer clause inserted either. It should be a pretty routine thing. Any solicitor worth their salt should be insisting on it being inserted.

Thats a bit of an ignorant comment to be fair. Our solicitor tried, the developers didn't care and were able to deny it as there was a queue of waiting buyers.
We were strongly warned that it was risky, but if the seller doesn't want it, they don't have to include it.

niamhzie · 18-06-2019 12:43pm

z0oT wrote: »

That's the whole point of the "Subject to Loan Offer" clause. If anything goes wrong with the mortgage like you can't get a loan offer, the bank goes bust, your circumstances change and you can't do the final draw down etc. You will get your deposit back.

That's why if you have a "Subject to Loan Offer" clause in the contracts you should be 100% covered to proceed and sign anyway even though you don't have the formal Loan Offer yet..

Ours was a funny one, new build, and the gist of the clause was that we would make all reasonable attempts to get a loan offer if the original fell through. Our solicitor was OK with it, because our loan offer was fairly secure, and that we would probably be able to secure an alternative offer if anything happened, and worse case scenario she would argue that 'reasonable' was a bit open to interpretation

z0oT · 18-06-2019 12:56pm

GingerLily wrote: »

Thats a bit of an ignorant comment to be fair. Our solicitor tried, the developers didn't care and were able to deny it as there was a queue of waiting buyers.
We were strongly warned that it was risky, but if the seller doesn't want it, they don't have to include it.

Yes it's truly the seller's choice as it should be. Your experience isn't surprising in a seller's market.

However, my point is that any solicitor that isn't asleep at the wheel should definitely be requesting the clause be inserted if their client is dependent upon a mortgage from a bank to buy. Ignorance not intended.

EDIT: Didn't mean to quote you originally, apologies.

awec · 18-06-2019 12:57pm

z0oT wrote: »

We had no issue getting the Subject to Loan Offer clause inserted either. It should be a pretty routine thing. Any solicitor worth their salt should be insisting on it being inserted.

Any solicitor can insist all they want. The developers solicitor can deny it if they want.

hanaimai · 18-06-2019 1:25pm

GingerLily wrote: »

Thats a bit of an ignorant comment to be fair. Our solicitor tried, the developers didn't care and were able to deny it as there was a queue of waiting buyers.
We were strongly warned that it was risky, but if the seller doesn't want it, they don't have to include it.

Same experience here - solicitor tried but developer refused and plenty of people willing to take our spot if we pulled out.

TheShow · 18-06-2019 6:41pm

The Satanist wrote: »

Quick question; if a couple currently living in commuter-land with 2 cars which are needed for work, are planning to move to close to Dublin city centre which will allow them to get rid of one car... would a bank take this into account when calculating monthly outgoings.

What I mean is: can you say to them that the car costs €X per month, this will now be reduced to zero - similar to how current rent paid can be taken into account?

No. The only thing that would work in your favour is if there was a car loan which would be cleared from the sale of the car, thus one less formal outgoing which increases repayment capacity.

Blanco100 · 18-06-2019 10:22pm

Hi there

We are approved with AIB and they are awaiting our decision on whether we want fixed rate or variable.

5 year fixed rate is 2.85% does this sound like a good deal?

voluntary · 18-06-2019 10:37pm

If I was to speculate, I'd consider the below:

1) ECB just signaled it may be dropping the rates further.
2) Global economies aren't doing that great, brexit looming, trade war etc
3) Irish mortgage rates are still the highest in the Eurozone. Good rate in Europe would be 1.25% and not 2.6%
4) Irish banks may be inclined towards reducing the rates as the bad mortgages clear off

So again, if I was to speculate, I'd go variable or fix for a shortest time possible and watch how the events unveil.

19-06-2019 12:06am

Blanco100 wrote: »

Hi there

We are approved with AIB and they are awaiting our decision on whether we want fixed rate or variable.

5 year fixed rate is 2.85% does this sound like a good deal?

Yes it is a good deal. You're not going to get much of a lower rate and you have certainty over your payments for the next 5 years, there is a lot to be said for peace of mind. You should ignore advice such as

voluntary wrote: »

I'd consider the below:

3) Irish mortgage rates are still the highest in the Eurozone. Good rate in Europe would be 1.25% and not 2.6%

Because it's completely and utterly irrelevant, you can't get a rate of 1.25% in Ireland so you may as well spend your time yelling at clouds.

If something massively better comes along in the short term then you can break your fixed contract, it isn't that expensive anymore as the bank can't apply punitive fees anymore, only recoup potential losses on their own borrowings.

drunkmonkey · 19-06-2019 12:14am

Some of those cash back offers might be better. A 3% fixed rate for 5yrs with cashback would be better offer than a straight 2.85% rate if going fixed.

19-06-2019 12:27am

drunkmonkey wrote: »

Some of those cash back offers might be better. A 3% fixed rate for 5yrs with cashback would be better offer than a straight 2.85% rate if going fixed.

That's what I did, house needed a little bit of work and the cashback was worth far more to me up front than the savings over the course of the fixed term. So agree with this, do your sums.

el Fenomeno · 19-06-2019 8:15am

GingerLily wrote: »

This is not the case for a lot of developers recently. A lot of people in this forum were not able to get this clause added in when buying NEW developments.

Didn't realise people were being refused this. Our solicitor said it was a standard request that they've never seen refused.

Pretty crappy that people are being pressured to sign without that clause in place. But has anyone ever heard of a case where the sale fell through and the deposit not returned? I imagine we'd have heard of such a case in the news if a developer took a couple's 30/40k leaving them without anything to show for it.

GingerLily · 19-06-2019 9:19am

el Fenomeno wrote: »

GingerLily wrote: »

This is not the case for a lot of developers recently. A lot of people in this forum were not able to get this clause added in when buying NEW developments.

Didn't realise people were being refused this. Our solicitor said it was a standard request that they've never seen refused.

Pretty crappy that people are being pressured to sign without that clause in place. But has anyone ever heard of a case where the sale fell through and the deposit not returned? I imagine we'd have heard of such a case in the news if a developer took a couple's 30/40k leaving them without anything to show for it.

Right now there's a waiting list of buyers so you'd probably get your money back minus fees or something.

Your also contractually obliged to buy the property, its not only the deposit that's at stake.

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

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