Banks not lending!!!!

petite

Tried to get a loan the other day and was refused - only a few years ago they were offering me a €10k loan and now i'm looking for half that they don't want to know.
I work fulltime - granted I have a mortgage and bills but i'm not too bad off IMO.

Are they just not lending at the moment or whats going on?

homer911

petite wrote: »

Tried to get a loan the other day and was refused - only a few years ago they were offering me a €10k loan and now i'm looking for half that they don't want to know.
I work fulltime - granted I have a mortgage and bills but i'm not too bad off IMO.

Are they just not lending at the moment or whats going on?

Was it your existing bank?
Are you in negative equity?
Are you in secure employment?
Have you ever been turned down by anyone else?
What % of your net pay is used to service your debt?
What sort of term were you looking for?

Any or all of these factors (and many others) would influence a bank

tHE vAGGABOND

Lending criteria are waaaaaay stricter than they were last year [and rightly so!]

So if you have a mortgage and other stuff as you say, they may be thinking that you simply cannot afford the loan.

Andymfinancial

dont feel too bad! banks are not lending. I recently had a case refused, he was earning 150k as an oil rig worker, wanted 320k but the banks would not lend because they said oil exploration is not sustainable for 35yrs in the north sea. Are they having a laugh! Banks say they are open for business but they are not. Most cases do not even make it past approval in principle and even out of the cases that get approved, some are withdrawn prior to loan offer! EBS seem to lending moreso than any bank in my experience

Toots

Andymfinancial wrote: »

dont feel too bad! banks are not lending. I recently had a case refused, he was earning 150k as an oil rig worker, wanted 320k but the banks would not lend because they said oil exploration is not sustainable for 35yrs in the north sea. Are they having a laugh! Banks say they are open for business but they are not. Most cases do not even make it past approval in principle and even out of the cases that get approved, some are withdrawn prior to loan offer! EBS seem to lending moreso than any bank in my experience

I'd completely disagree, I work for BOI and they are most definitely lending. Granted the criteria are much stricter, but definitely the loans are being given. Our own branch averages about 3 a week, and we're a pretty small branch. Of the 3 per week approved, there would also be roughly 2 or 3 declines. Now in the boom times, we could have been doing up to 10 loans a week, with about maybe the same number of declines. I think a lot of people seem to think that the banks aren't lending and just don't bother applying.

Funnily enough, we checked through the declines a while back, just out of interest, to see if there was a main reason people were unsuccessful in applying. The reason most loans were declined was because the applicant had undisclosed borrowings elsewhere, we reckoned that those clients may have been trying to amalgamate other loans or credit cards and didn't put it on the application so the bank wouldn't know it would be taking on another institutions debt. The second most popular reason was 'already sufficiently committed' meaning that the customer has enough outgoings already and the underwriters feel they would be stretched too thin with loan repayments.

Now I know that some banks are just not lending, period. My sister in law walked into a bank (not one of the big two) a few weeks ago looking for a small loan and the loans officer actually said to her that there was no point applying, they weren't lending. The only loans they are doing is restructures on their existing loans.

stepbar

Andymfinancial wrote: »

dont feel too bad! banks are not lending. I recently had a case refused, he was earning 150k as an oil rig worker, wanted 320k but the banks would not lend because they said oil exploration is not sustainable for 35yrs in the north sea. Are they having a laugh! Banks say they are open for business but they are not. Most cases do not even make it past approval in principle and even out of the cases that get approved, some are withdrawn prior to loan offer! EBS seem to lending moreso than any bank in my experience

I'm more shocked at the fact you submitted a 35yr mortgage application for someone who earns 150k p.a. That to me is taking the p1ss.

Toots

stepbar wrote: »

I'm more shocked at the fact you submitted a 35yr mortgage application for someone who earns 150k p.a. That to me is taking the p1ss.

That's a bit harsh!! We don't know the details behind that particular application.

stepbar

Toots* wrote: »

That's a bit harsh!! We don't know the details behind that particular application.

Not really Toots. That person (earning 150k p.a) shouldn't really need to take out a 35 yr mortgage for the size of loan being looked for. In all fairness it's taking the p1ss and truth be told I'd say that was the unoffical answer......

Son Of A Vidic

Just reading these posts here, correct me if I'm wrong but did we not just recently bail these guys out?

stepbar

medicman2009 wrote: »

Just reading these posts here, correct me if I'm wrong but did we not just recently bail these guys out?

Troll much?

Toots

medicman2009 if you can't post helpfully or constructively, don't bother posting in this forum.

Andymfinancial

stepbar wrote: »

I'm more shocked at the fact you submitted a 35yr mortgage application for someone who earns 150k p.a. That to me is taking the p1ss.

when you dont know the particular details of a client how can you assume that a 35yr mortgage was not good advice. As soon as he had approval he was buying a commercial property for 645k so he wanted his outgoings to be minimal!!! Think before you speak

Andymfinancial

Toots* wrote: »

I'd completely disagree, I work for BOI and they are most definitely lending. Granted the criteria are much stricter, but definitely the loans are being given. Our own branch averages about 3 a week, and we're a pretty small branch. Of the 3 per week approved, there would also be roughly 2 or 3 declines. Now in the boom times, we could have been doing up to 10 loans a week, with about maybe the same number of declines. I think a lot of people seem to think that the banks aren't lending and just don't bother applying.

Funnily enough, we checked through the declines a while back, just out of interest, to see if there was a main reason people were unsuccessful in applying. The reason most loans were declined was because the applicant had undisclosed borrowings elsewhere, we reckoned that those clients may have been trying to amalgamate other loans or credit cards and didn't put it on the application so the bank wouldn't know it would be taking on another institutions debt. The second most popular reason was 'already sufficiently committed' meaning that the customer has enough outgoings already and the underwriters feel they would be stretched too thin with loan repayments.

Now I know that some banks are just not lending, period. My sister in law walked into a bank (not one of the big two) a few weeks ago looking for a small loan and the loans officer actually said to her that there was no point applying, they weren't lending. The only loans they are doing is restructures on their existing loans.

You say that 3 are approved but 2-3 are declined. Personally i think that is still a poor strike rate. I havent had experience of BOI so i really cant comment on their lending criteria but from my experience of dealing with 8 lenders the banks really do not want to approve mortgages or loans. A local car dealer told me only last week that out of the last 20 applications for car credit, 17 were turned down!

Only last week i had a mortgage rejected. She was a midwife with earnings of 54k pa. A midwife receives overtime for delivering babies after hours, ALL the banks refused to take the overtime into account, now come on babies are born after 530pm!!!!!

Antoennis

I actually think the banks are lending all be it on a very strict basis. I haven't had very many turned down that I thought I would get. I have had plenty people want a mortgage that have no chance yet any way. Some people are still living in dream land. I had a client recently earning €25k looking for €180k but said €160k would do. I told him that i might just might be able to get €150k but that was subject to underwriting. No deal he said I'll go else where. Fair enough I said let me know if you let the €180k. Haven't heard from him since.

stepbar

Andymfinancial wrote: »

when you dont know the particular details of a client how can you assume that a 35yr mortgage was not good advice. As soon as he had approval he was buying a commercial property for 645k so he wanted his outgoings to be minimal!!! Think before you speak

O holy god :rolleyes: I rest my case.

3DataModem

Andymfinancial wrote: »

when you dont know the particular details of a client how can you assume that a 35yr mortgage was not good advice. As soon as he had approval he was buying a commercial property for 645k so he wanted his outgoings to be minimal!!! Think before you speak

Cripes... really?

He's getting a 35 year mortgage in order to demonstrate low outgoings to ensure approval of a 645k commercial loan?

That's some prudent financial advice he is being given.

( ^^^ Extreme sarcasm )

stepbar

It sure is. Bit like the time equity releases were like the best thing since sliced bread.

Pablo Sanchez

I know its not concrete evidence that banks ARE lending but i rang BOI to ask what their car loan rates are, i have since had three calls from them to see if i was interested in making an application.

ShadowHearth

speaking about this here... i dont whant to start a new thread, but i think you lads will give me a rought idea.

Me and mine misses whant to try to apply for mortgage. we bouth earn 17k per year ( in to bank account ). And we were looking for 160k to borrow.

I got a loan for 5k which i iwll finish to pay out in 2 months. visa is only 100eu in credit, i use it for some online shoping sometimes...

One problem that is ( i think ), is that we use mine account mainly to pay rent (600eu), insurance, loan. so i am prety much eaven on mine account. We put away allmoust all money that she earns as savings...

So is there a chance for us to get mortgage, or we are way off the charts to get it?

thanks!

stepbar

ShadowHearth wrote: »

speaking about this here... i dont whant to start a new thread, but i think you lads will give me a rought idea.

Me and mine misses whant to try to apply for mortgage. we bouth earn 17k per year ( in to bank account ). And we were looking for 160k to borrow.

I got a loan for 5k which i iwll finish to pay out in 2 months. visa is only 100eu in credit, i use it for some online shoping sometimes...

One problem that is ( i think ), is that we use mine account mainly to pay rent (600eu), insurance, loan. so i am prety much eaven on mine account. We put away allmoust all money that she earns as savings...

So is there a chance for us to get mortgage, or we are way off the charts to get it?

thanks!

Usually a multiple of 4.5 is applied to a joint mortgage application (i.e 17k * 2 * 4.5% = 153k). You could purchase a house up to c167k (8% deposit). However, different banks have different criteria and it depends on your other comittments. Sometimes a minimum NDI is applied (net disposable income), which may reduce the amount you could borrow.

enviro

ShadowHearth wrote: »

speaking about this here... i dont whant to start a new thread, but i think you lads will give me a rought idea.

Me and mine misses whant to try to apply for mortgage. we bouth earn 17k per year ( in to bank account ). And we were looking for 160k to borrow.

I got a loan for 5k which i iwll finish to pay out in 2 months. visa is only 100eu in credit, i use it for some online shoping sometimes...

One problem that is ( i think ), is that we use mine account mainly to pay rent (600eu), insurance, loan. so i am prety much eaven on mine account. We put away allmoust all money that she earns as savings...

So is there a chance for us to get mortgage, or we are way off the charts to get it?

thanks!

Best thing to do is contact your bank and ask. There is lots of factors to be considered and only the bank can answer your question properly.

ShadowHearth

enviro wrote: »

Best thing to do is contact your bank and ask. There is lots of factors to be considered and only the bank can answer your question properly.

thx, thought wount that put them off? As i pay rent and bill of mine account, so i dont have savings on it? Pay 600 rent or pay 600eu for mine own house....

stepbar

ShadowHearth wrote: »

thx, thought wount that put them off? As i pay rent and bill of mine account, so i dont have savings on it? Pay 600 rent or pay 600eu for mine own house....

You won't get rent allowance if you take up a mortgage. What ever you do please do a bit of research yourself and don't go in knowing nothing.

Andymfinancial

3DataModem wrote: »

Cripes... really?

He's getting a 35 year mortgage in order to demonstrate low outgoings to ensure approval of a 645k commercial loan?

That's some prudent financial advice he is being given.

( ^^^ Extreme sarcasm )

It is impossible for you to comment without knowing the client. Is his father giving him 1.5million next year from the sale of land. Is his mother seriously ill and he will inherit 10.2 million. Is he taking out 35 years because he is only 19 years old and is it will keep outgoings down until he receives 1.4 million from a car accident in december. How can you comment on financial advice on someone you have never met. And finally how do you know he was even given financial advice from anyone, was it execution only advice. As stated before think before commenting on something that you have very little knowledge on........:D

raido9

Banks are definitely lending. But it is alot stricter and more prudent that it was a couple of years ago.

I wouldn't blame the banks too much, chances are if you've been turned down for a loan, they're saving you from yourself.

jimoc

stepbar wrote: »

Usually a multiple of 4.5 is applied to a joint mortgage application (i.e 17k * 2 * 4.5% = 153k). You could purchase a house up to c167k (8% deposit). However, different banks have different criteria and it depends on your other comittments. Sometimes a minimum NDI is applied (net disposable income), which may reduce the amount you could borrow.

Whenever I've asked I've been told that minimum NDI is 65%
Which would put your repayments of all loan outgoings at 991 euro.

stepbar

Andymfinancial wrote: »

It is impossible for you to comment without knowing the client. Is his father giving him 1.5million next year from the sale of land. Is his mother seriously ill and he will inherit 10.2 million. Is he taking out 35 years because he is only 19 years old and is it will keep outgoings down until he receives 1.4 million from a car accident in december. How can you comment on financial advice on someone you have never met. And finally how do you know he was even given financial advice from anyone, was it execution only advice. As stated before think before commenting on something that you have very little knowledge on........:D

Stop making a fool of yourself andy. Advising on a mortgage is hardly execution only advice now is it? None of the scenarios above should be of your concern unless you have a way of authenticating the information 100%. The fact that you feel the need to come back here to justify yourself speaks parables in itself.

Toots

stepbar wrote: »

Stop making a fool of yourself andy. Advising on a mortgage is hardly execution only advice now is it? None of the scenarios above should be of your concern unless you have a way of authenticating the information 100%. The fact that you feel the need to come back here to justify yourself speaks parables in itself.

Ok, it's obvious you two disagree, however please don't get personal. Comments like the above are not acceptable on this forum.

Andymfinancial

stepbar wrote: »

Stop making a fool of yourself andy. Advising on a mortgage is hardly execution only advice now is it? None of the scenarios above should be of your concern unless you have a way of authenticating the information 100%. The fact that you feel the need to come back here to justify yourself speaks parables in itself.

Stepbar, its not about me or you its about helping people on here. Cut the childish comments. Keep your views constructive or keep them to yourself.

RoadKillTs

Me and mine misses whant to try to apply for mortgage. we bouth earn 17k per year ( in to bank account ). And we were looking for 160k to borrow.

So is there a chance for us to get mortgage, or we are way off the charts to get it?

As you are on near enough minimum wage the bank would see you as an even higher risk. All you can do is ask but I seriously doubt you would get 160k.
Bear in mind you would need a deposit of around 10%.

inspired38

The whole lending scene is so far removed from 2007 that its difficult for people to grasp. With the new tighter rules by banks, house prices will have to continue to fall before people can afford them. Thats difficult to accept for people who may have paid more in the previous years.

That said, some of the bank criteria is a bit draconian. My brother was recently turned down for 120k to install a system which would save him more money than the monthly payments he is currently making on an energy project. He has never missed a payment and has positive cashflow. The relationship manager at the bank would not even submit the application and would not give reasons.

I guess it depends on who you meet.