Credit union & deposits

sambuka41

Hey looking for a bit of advice! I heard that back in tha day ppl used to borrow the deposit for their mortgage from the credit union. Is this still possible as a friend was saying that they wont give u a mortgage if they think you have done this. Even if u can prove u can afford the mortgage.

My prob is that i earn good money and pay a high enough rent and loan,totals about 1200 a month. The mortgage i would be looking for is about 1000 a month. So i can afford it i just have no savings. Not long out of college and would take me years to get 8 % up.

Any help would be appreciated!

Victor

Do you want a sub-prime mortgage?

Sarn

This is the new reality. You have to save before you can buy (in almost all cases). With prices expected to fall further over the next year I would say wait and start building that deposit. Work on clearing your outstanding loan as that will affect how much you can borrow.

100% mortgages and, anecdotally, credit union loans to pay for the deposit played a part in fueling the bubble. I would be concerned if a mortgage was received based on an undisclosed credit union loan that paid for the deposit. That could cause issues down the road. Lying on a mortgage application is not a good idea.

The_Conductor

Most (but not all) of the credit unions have subscribed to the Irish Credit Bureau in recent years- so while it was the case that you could borrow your deposit from the credit union safe in the knowledge that your mortgage providor would never find out about it- you can't make this assumption any longer.

pathway33

Nowadays the only way a bank will accept you with no savings of your own is if your parents gift you the money. They will look for a letter then confirming that you do not have to pay this back to your parents. What sort of a place you looking for? What price?

Firetrap

The ICB has a list of organisations which are affiliated to it. There are quite a few Credit Unions signed up to it now I see [Link]. Be aware too that with things the way they are, chances are that the banks will be looking more closely at your finances and might ask questions about where your deposit came from.

sambuka41

Cheers for all the replies! Figured it was a long shot!! Just gets to me (as many others im sure!!) that im paying same amount as a mortgage at the mo but until i get 15,000 up i cant get one. Sucks.

Been looking at 1 bed in the city centre. Few places under the 200,000 mark. Not expensive its just the deposit thats the problem. From the looks of it i earn 1000 over the cut off for the shared ownership deal. And ive been reading loads of bad stuff about the affordable housing. So guess its down to putting money aside.

Cheers.

pathway33

get the seller of apartment to give you the 15,000. if he'sselling for 200,000 it's the same to him as selling at 185,000.

Firetrap

I can understand why you want to get onto the property ladder but are you sure that you want to buy a one-bedroomed apartment? Don't let your desperation to buy something cloud your judgement. I know some people who rent or have rented one-bedroom apartments. While they were grand because of their location and for being a roof over their heads, they found them cramped and they ran into problems with storage space.

Hold your horses for a while and clear your debts. Also, with the property market going the way it is, you might be able to negotiate cheaper rent for yourself or move somewhere cheaper.

The_Conductor

sambuka41 wrote: »

Cheers for all the replies! Figured it was a long shot!! Just gets to me (as many others im sure!!) that im paying same amount as a mortgage at the mo but until i get 15,000 up i cant get one. Sucks.

Been looking at 1 bed in the city centre. Few places under the 200,000 mark. Not expensive its just the deposit thats the problem. From the looks of it i earn 1000 over the cut off for the shared ownership deal. And ive been reading loads of bad stuff about the affordable housing. So guess its down to putting money aside.

Cheers.

Look on the bright side- you're not tied into an asset thats loosing between 1 and 1.5% of its monetary value on a monthly basis- while you're accepting a paycut and direct taxation is increasing.

If you want to purchase somewhere that just might have a resale market in the future- keep well away from 1 bed apartments.........

confuzed

:eek: few things never change. Cann't believe still people out there who want to buy with 100% mortgage without any deposit.They are sad coz the only thing they don't have is a 15000 deposit but keen to get loan of 200,000 for whole of thier life. Gimme a break.

Victor

pathway33 wrote: »

get the seller of apartment to give you the 15,000. if he'sselling for 200,000 it's the same to him as selling at 185,000.

That doesn't work. The bank's valuer will see that its worth less than 200,000.

uncle betty

sambuka41 wrote: »

Hey looking for a bit of advice! I heard that back in tha day ppl used to borrow the deposit for their mortgage from the credit union. Is this still possible as a friend was saying that they wont give u a mortgage if they think you have done this. Even if u can prove u can afford the mortgage.

My prob is that i earn good money and pay a high enough rent and loan,totals about 1200 a month. The mortgage i would be looking for is about 1000 a month. So i can afford it i just have no savings. Not long out of college and would take me years to get 8 % up.

Any help would be appreciated!

You have no idea how lucky you are. You are being saved from yourself, and the credit unions have a lot to answer for.

The loan you can't odds. On the other hand, how much is your rent ?

If you're truly serious about getting a place, you'll make sacrifices.

Move into a shared house (I know, I know - but do you want this house or not ?), immediately bank the difference between your current rent, and what you will pay to house-share.

Your bills automatically ought to come down. Bank the savings.

If you smoke, drink, etc, cut down or cut out. Can you cycle to work instead of bus or car, or whatever ? Bank the savings.

Do you want this property or not ? This is the new/old mindset that's required now, and no harm.

Pay off your debts early if you can, and pay everything before you think about saving for a deposit. As a general rule, most people would say there's no point to having savings while you have debt that's costing more to service than the savings are earning you.

When you're ready to save, do you know where the best savings rates are on offer ? For this there's a sticky page on Ask About Money.

Inform yourself - read the propertypin.ie, finfacts and so on. Plenty info out there.

Rent is not dead money, and renting is freedom if you're unfortunate enough to lose your job, etc.

Whatever you're seeing now, you'll probably get for maybe 10% less in a year from now. So you need 8% of a smaller number, and so on and so on.

Delayed gratification is real luxury

Very best of luck !