Are Banks lending?

brigadear

Just wondering, has anybody here recently gone for a morgage. I recently got approved but not what was looking for, I asked for 270k at the max, but the bank is only willging to lend 200k, have to say I am surprised that they only willinging to lend 200k, was expecting at least 220k. My job is fairly safe as in public service, and my other halfs job is going well in a resturant, so we have money come in regular basis and are good savers, with our rent of 900 per month, and we save an extra 1000 to 1200 a month as well.

spockety

What's your salary, and what's your partners salary?

I would imagine a lot of people would envy the fact that you got approved at all, and 220k at 90% getting you a 242K dwelling should give you pretty decent bang for your buck in 2010 or 2011.

brigadear

I am on 25k and she on 21k plus whatever o/t come her way. Not sure how far 200k will go at the moment, as am looking in Dublin 15.

herya

OT but may I just ask what bank it is?

galah

just got the letter of offer yesterday, 92 % mortgage, 225 k.

no problem getting it, either (not on massive salaries, both around the average industrial wage).

mrgaa1

are you in Dublin or outside of Dublin? And which bank was it?

Sarn

I'd have to say that that's a large amount based on your incomes. You're almost getting 5 times your combined income and with what you're saving and the public service job I'd say that was a big contributing factor. It's possible that they're also factoring in imminent pay cuts in the PS. I'm sure it won't come to it but with the number of restaurants closing at the moment I would be careful making any large decisions relying on that income.

spockety

Sarn wrote: »

I'd have to say that that's a large amount based on your incomes. You're almost getting 5 times your combined income and with what you're saving and the public service job I'd say that was a big contributing factor. It's possible that they're also factoring in imminent pay cuts in the PS. I'm sure it won't come to it but with the number of restaurants closing at the moment I would be careful making any large decisions relying on that income.

Pretty much agree with this. I'm not sure why you think your job is safe just because it's in the Public Service (I'm not having a go at you here), the borrowing that Ireland is doing in order to sustain the existing Public Service can't go on, and something has to give. Short of a divine intervention to boost the tax take, there will be cuts in the Public Service, no matter how many strikes happen as a result.

Your partner is also working in a notoriously volatile industry, the restaurant/hospitality area is cut throat and places are going bust left right and centre.

I have to say that I'm actually pretty amazed that you were even offered a mortgage at all, never mind 200k. I reckon the best thing you can do for yourself and your partner is to hold tight for the next year or too, keep saving that 1000 euro a month, and look at making multi hundred thousand euro decisions when things have settled a bit. It would be a shame beyond measure for you if you committed to such a large mortgage relative to your salary, only to be bitten by pay cuts, job losses, and/or rising interest rates over the coming years.

Cash is king, keep saving.

(imo)

Senna

I think banks no longer take past saving trends etc into consideration, they do want to see that you can save, but if you earn 50k per year and put 4k into the bank every month, it wont make any difference.
All they are interested in is ability to make future repayments, so your current wage is all that's taken into account. OP, i'd say your very lucky to be offered a mortgage of 200k. At normal interest rates (6%) that €1100 to €1300 per month, i would earn a small bit more but couldn't afford those repayments with all the other daily costs and a family.

gurramok

4.5 times combined income or thereabouts sounds right, you were not hard done by OP.

brigadear

Interesting advice by everyone, thanks for that. The bank in question was AIB. Just to reply to a previous comment regarding public service cuts and all that, it sounded like because I was said I worked in the public service that I am safe in my job, I do expect their to be job losses and pay cuts but because I am only there 18 months they are not likely to get rid of me, as I am a low paid earner, but who knows!!. And regards my wifes position, yes it is a cut throat industry, but they company has 4 restaurants, only 2 opened in last 6 months, if one closes she would be moved to the next, it is fairly secure compared to other restaurants, its more of a carvey, all the restaurants are based in business parks around Dublin. We cant wait another year to buy, I am 32 now, so really need to be on the property market, I guess either go with the 200k or wait a couple months.

ntlbell

brigadear wrote: »

I am on 25k and she on 21k plus whatever o/t come her way. Not sure how far 200k will go at the moment, as am looking in Dublin 15.

That's a crazy amount of money to borrow on those wages.

I wouls say 105-115k would be stretching it, never mind 250k

brigadear

I dont see how its crazy, as we have proved we can save, pay our rent, have no debts, and have a decent level of savings.

ntlbell

brigadear wrote: »

I dont see how its crazy, as we have proved we can save, pay our rent, have no debts, and have a decent level of savings.

I'm not referring to the bank being crazy as much as I am you asking for it.

if you're in a position now where you can save a lot of money a month and prices are still dropping then you're the perfect candidate not to take out a mortgage.

Your partners earning capabilities in the future is an unknown variable but you know _now_ how much you can save so you can be in a position when some sort of floor is reached to have a huge down payment on a property which will reduce the amount of interest you pay over the life time significtently and the lenght of the mortgage avoid potential instant negative equity.

interest rates are very low at the moment which means they can only go one way which is up so you mighht be able to afford the payments now but a few points in an increase it might become a burden.

no one can tell you what to do, i'd just advise you to take another look at it.

learn from the mistakes of others.

jeepers101

ntlbell wrote: »

That's a crazy amount of money to borrow on those wages.

I wouls say 105-115k would be stretching it, never mind 250k

Yeah and I'm sure they'll get a great place out in Dublin 15 for that kind of money. Try to be even a small bit realsitic ntlbell.

ntlbell

jeepers101 wrote: »

Yeah and I'm sure they'll get a great place out in Dublin 15 for that kind of money. Try to be even a small bit realsitic ntlbell.

I never said they would get anything for it.

I'm suggesting that maybe now is not the right time to buy, please read posts carefully.

also, wtf is wrong with d 15?

jeepers101

ntlbell wrote: »

I never said they would get anything for it.

I'm suggesting that maybe now is not the right time to buy, please read posts carefully.

also, wtf is wrong with d 15?

Maybe you should be reading the posts carefully, when did I ever say there was anything wrong with Dublin 15. I implied you wouldn't get a place in Dub 15 for little over 100k. Where's the insult?

And if everybody took your advice and waited around for the 'right time to buy' the country would never get back on its feet. OP wasn't asking whether or not its the right time to buy, he was asking if the banks are lending.

bangersandmash

jeepers101 wrote: »

And if everybody took your advice and waited around for the 'right time to buy' the country would never get back on its feet. .

Seriously? Buying a house for the sake of the country? Have you been reading from the Tom Parlon hymn book? :rolleyes:

I think Ntlbell was simply advocating caution when taking out a large loan. What the OP will actually be able to afford with a smaller loan is another matter.

OP some banks are still lending. As far as I'm aware two key factors are a) future repayment capacity, b) significant deposit. For (a) salary will obviously be the key point, though your rent + savings habits do at least show that you're currently in a position to pay the amount your require. But as Ntlbell says I would make sure not to overstretch yourself. Also I'd speculate that PS jobs will be treated differently by the banks after the budget.

neil_purdy

GF got a 250k approved and signed off on there last week.. Had a parent as guarantee.. Didnt think she would get one at all.. but happy days!!

ntlbell

jeepers101 wrote: »

Maybe you should be reading the posts carefully, when did I ever say there was anything wrong with Dublin 15. I implied you wouldn't get a place in Dub 15 for little over 100k. Where's the insult?

And if everybody took your advice and waited around for the 'right time to buy' the country would never get back on its feet. OP wasn't asking whether or not its the right time to buy, he was asking if the banks are lending.

Well I read back over your post and if not trying to be insulting, I don't really understand why you brought up D15 or am I missing something?

by the right time to buy, I mean the right time for "you" not when it's a 3 page spread in the indo.

buying a house to get the country back on it's feet? what the hell are you talking about? we should all get into a lifetime of debt to help the country? really? answer the call to patriotism by an over priced home and enter a lifetime of debt YOUR COUNTRY NEEDS YOU.

Crazy talk.

bruzz

neil_purdy wrote: »

GF got a 250k approved and signed off on there last week.. Had a parent as guarantee.. Didnt think she would get one at all.. but happy days!!

Hi Neil,
Congrats on your gf getting a mortgage. Who did she go with and why did she think she would not get one?

mrgaa1

neil_purdy wrote: »

GF got a 250k approved and signed off on there last week.. Had a parent as guarantee.. Didnt think she would get one at all.. but happy days!!

Congrats. Could you say are you in Dublin or out of Dublin, public or private employee and a rough idea of salary? It may help others who are in a similar boat and wondering if they could get a mortgage or not.

neil_purdy

She went through a Broker, Think EBS were the first one to approve..

She is Private Sector.. Dublin.. If im not mistaken 30kish a year??? Didnt think she would get it as she was going for it alone.. But hey.. Now i can bum in on the house!! woo!!!

martian1980

neil_purdy wrote: »

She went through a Broker, Think EBS were the first one to approve..

She is Private Sector.. Dublin.. If im not mistaken 30kish a year??? Didnt think she would get it as she was going for it alone.. But hey.. Now i can bum in on the house!! woo!!!

8 times annual salary? Wow. Had she a deposit?

Zamboni

ntlbell wrote: »

Well I read back over your post and if not trying to be insulting, I don't really understand why you brought up D15 or am I missing something?

D15 was where the OP was looking...

jobless

martian1980 wrote: »

8 times annual salary? Wow. Had she a deposit?

good to see the banks are back to lending crazy multiples again.... guess they never learn...

the fact that she needs a guarantor should tell her its a bad idea

ntlbell

Zamboni wrote: »

D15 was where the OP was looking...

I read back to the OP and couldn't see it.

my bad.

oflahero

The lesson I'm taking from this thread (and all similar stories you're hearing at the moment) is that the only house price valuation that matters is the bank's. When the banks had their spigots of pretty-much-free credit gushing away, that meant correspondingly huge house prices, because they were willing to lend it to anyone, and through a bank mortgage is the most common way of buying a house.

If, as in now, the banks are saying '150 is the max we can give you' then it makes a mockery of the 'average', say, house being priced at 250. No takers means no market at that price. No amount of NAMAs can beat the market. Without real-world people with real-world money, the 'value' of a house is the max that one person will give for it. The idea of house prices 'recovering' is absurd. And we know that the banks are failed entities. One way or another, those prices will dwindle down to the money on offer, even it takes years longer than it should thanks to a zombie NAMA's efforts to prop up a failed model.

It still amazes and maddens me to hear people actually *lamenting* that they can't owe 100 grand more to the bank than they are allowed to. What is with this addiction to debt? Shouldn't we be *happy* that prices are finally coming down to a level that makes sense in a productive economy?

gurramok

Pity the parent who is a guarantor. If anything happens in the purchasers lifetime, its the elderly parent who should be looking a stress free retirement but instead has to pick up the tab legally.
I wouldn't take the risk myself, I want my parents to have a good retirement as I want to be responsible for my own debts.

jobless

oflahero wrote: »

It still amazes and maddens me to hear people actually *lamenting* that they can't owe 100 grand more to the bank than they are allowed to. What is with this addiction to debt? Shouldn't we be *happy* that prices are finally coming down to a level that makes sense in a productive economy?

you would think that... i remember people talking about the exorbitant price of their house as if it was a badge of honour...

you still get people, even on here that think to get the economy going again we need to sell more houses... people have been brain washed that much by the media

jobless

gurramok wrote: »

Pity the parent who is a guarantor. If anything happens in the purchasers lifetime, its the elderly parent who should be looking a stress free retirement but instead has to pick up the tab legally.
I wouldn't take the risk myself, I want my parents to have a good retirement as I want to be responsible for my own debts.

my sentiments exactly... whatever about giving them the deposit but to expect your parents to bear the whole risk is awful....

does this guarantor option exist in other countries?... to me it just seems wrong...
then again i thought that about 100% mortgages and 40 year terms