Help! I want to get a mortgage!

D3PO

shoegirl wrote: »

By the way 30 is still fairly young to buy a home today, a lot of people esp singles and single income couples in their late 40s are completely priced out of the market.

Especially with pensionable age being pushed up form 65 to 68. It may take some time but eventually this will be reflected in regards to lending criteria and terms avaiable to people of certian ages.

shoegirl

Thats a good point D3PO. A lot of single childless people in that age group might be quite happy to buy up cheap 1 or 2 bed apartments in a year or two if and when they reach price levels suited to somebody on a single average income.

Another option I didn't think of is county council loans and Homechoice loans. They work similarly to mortgages, but you have to have been rejected by the banks in order to be accepted. I would presume they are stringent are probably a good option for somebody with good credit, a steady income, and a 15% deposit, who might have qualified easily before the credit crunch, but cannot get anything now, despite on paper seeming to meet criteria. Where you get the mortgage from doesn't matter, its if you find a place you like, that you'd like to live in long term and in a suitable location for work and at an affordable mortgage.

You have to remember too that rents in many cases still exceed what the mortgage would be for the same place, you cannot expect people to pay more for a place that is still very often poorly maintained (if not substandard) and be happy about it - which is a lot of the reason why renting is regarded as the poor relation.

I do think by the way there is a huge need for hybrid rental/buying models that would help people on lower incomes rent at a fair price (perhaps with longer leases) as from what I can see most people who rent do so mainly because they cannot afford to buy (or could only afford if they purchased 60 miles away in a dark country lane!) The rent-to-buy model is not a bad idea - its long term and benefits both parties. Also maybe medium term leasing? There are lots of people falling in between the cracks who need more help than they are getting right now.

The_Conductor

shoegirl wrote: »

Thats a good point D3PO. A lot of single childless people in that age group might be quite happy to buy up cheap 1 or 2 bed apartments in a year or two if and when they reach price levels suited to somebody on a single average income.

The only reason a lot of childless couples are happy to buy cheap 1 or 2 bed apartments- is an assumption that they can trade up to a more suitable alternate, if/when their circumstances change. Its rapidly becoming the case that the vast bulk of the demand in the market- is not for apartments- full stop. Its for freehold property- notably homes with gardens.

There are a lot of folk out there who bought over the past few years- who are now living in wholly unsuitable property- often in massive negative equity- and have no possibility of moving, regardless of how their circumstances change.........

shoegirl wrote: »

Another option I didn't think of is county council loans and Homechoice loans. They work similarly to mortgages, but you have to have been rejected by the banks in order to be accepted. I would presume they are stringent are probably a good option for somebody with good credit, a steady income, and a 15% deposit, who might have qualified easily before the credit crunch, but cannot get anything now, despite on paper seeming to meet criteria. Where you get the mortgage from doesn't matter, its if you find a place you like, that you'd like to live in long term and in a suitable location for work and at an affordable mortgage.

You are assuming that the ideal situation is to buy. If you find a nice place that you'd like to live in longterm, and in a suitable situation for work- the better course of action might be to rent for all manner of reasons.

Very few people have any reasonable expectation of working longterm in any location any more- the previous model of spending 35-40 years going in and out of the same office, is as dead as the dodos. The stated aim of the Irish government is to encourage a 'knowledge economy' with greater mobility for skilled workers. Tying yourself down to a particular location- might be a very bad idea (ask any civil servant!!!)

shoegirl wrote: »

You have to remember too that rents in many cases still exceed what the mortgage would be for the same place, you cannot expect people to pay more for a place that is still very often poorly maintained (if not substandard) and be happy about it - which is a lot of the reason why renting is regarded as the poor relation.

Rents may exceed mortgages- however, a mortgage is only one cost related to property ownership, and indeed, rent normally isolates you from many of the costs associated with property. To simply look at the headline mortgage rate, and compare it to the prevailing rent level- is dangerous, and misleading. Aside from anything else- interest rates are at historically low levels- rates between 6 and 7% would be 'normal'- were you to compare a mortgage at these levels, to rent levels (allowing for inflation- or deflation)- the story would almost certainly be entirely different.

shoegirl wrote: »

I do think by the way there is a huge need for hybrid rental/buying models that would help people on lower incomes rent at a fair price (perhaps with longer leases) as from what I can see most people who rent do so mainly because they cannot afford to buy (or could only afford if they purchased 60 miles away in a dark country lane!) The rent-to-buy model is not a bad idea - its long term and benefits both parties. Also maybe medium term leasing? There are lots of people falling in between the cracks who need more help than they are getting right now.

I really don't understand the Irish pre-occupation with property ownership. You are making an automatic assumption that the main reason people rent is because they can't afford to buy. Medium term leasing- is already catered for- and with far greater tenants rights than on the continent after last years 2009 Housing Act. You most certainly do not have landlords out mowing lawns in Germany or Holland when people take out a longterm lease on a property........

When you say there are lots of people falling through the cracks right now- what do you mean? People who are renting- who want to buy- or people sleeping in doorways who are homeless?

Also- why should there be a scheme to give a house to every couple in the country? We have this fascination with owning property that got us all into this mess in the first place........

There is so much here that doesn't make sense!

shoegirl

So what happens then when you retire, on perhaps 1/3 of your then salary, and suddenly find that your rent exceeds your entire income, never mind an unsustainable proportion?

The current rents for small units even outside of Dublin are about the same as the entire old age pension. Somebody single of pension age retiring without a very generous private pension in addition to the state pension will be in an immediate housing crisis in the current situation.

Which is why I think most people tend towards home ownership. How many 50 or 60-something tenants do you see aside from those who may have decided to cash in on high prices a few years ago? Not many. The current rented market in no way caters for pensioners even on the full rate. 230 euros a week will not pay for much in Dublin.

There is a massive housing time bomb that accompanies the pension time bomb that the current housing regime doesn't account for. We haven't seen the kind of poverty that will ensue when the current property-less adults hit pension age because right now pensioners tend to either own their own homes or are social housing tenants. There are very few adults hitting pensionable age who are hitting this situation at present, but if the current levels of ownership fall as they have done, and if rents don't drop relative to incomes, we could have a severe housing problem for older people in as little as 20 years time.

For that reason I don't entirely dismiss the desire to own property - it is seen as part of the same system of long term security which is I think why far more people buy a home than take out a pension. You at least have the option of a modest state pension. There is no automatic housing for over 65s who retire without a private pension.

twowheelsonly

Can any of the banking people on here tell me if your rent is taken into account when applying for a mortgage?

I'm in the same boat as a lot of others. I have a substantial portion of a deposit saved, over 12 months or so, on a decent enough Public Service wage with a decent pension to look forward to (At the moment!!!) and less than 5k in loans/debt outstanding with a decent enough credit rating. Married with kids BTW.

I recently had a chat in the bank about getting a mortgage and the girl told me that they don't take into account the fact that I woon't be paying rent. I currently pay €210 per week rent, which works out at €910 per month which IMO is a long way towards paying for a mortgage - but they don't see that!!

I haven't actually applied yet, I still want to save a few more quid and I also believe that prices will drop another significant amount. At the moment I'm basing my 'dreams/plans' on a place that I've seen for €280k and budgeting accordingly. However the fact that she has told me this has me wondering. Can anybody clear it up for me??

The_Conductor

shoegirl wrote: »

So what happens then when you retire, on perhaps 1/3 of your then salary, and suddenly find that your rent exceeds your entire income, never mind an unsustainable proportion?

Two options- plan for your retirement in an appropriate manner (the current proposals are that employers and the government will match your contributions to certain max levels, and your contributions are tax free @ 30%)

If you haven't planned- and your income is below a certain level- then you qualify for various supports- such as rent allowance. Its not ideal- but there are lots of people of working age in this boat- so why should you suddenly wave a magic wand at age 68?

shoegirl wrote: »

The current rents for small units even outside of Dublin are about the same as the entire old age pension. Somebody single of pension age retiring without a very generous private pension in addition to the state pension will be in an immediate housing crisis in the current situation.

Not if you factor other entitlements into the equation. In any case- the current proposals are to freeze the state pension at current levels indefinetly- and make everyone purchase either a pension, or annuities, as appropriate.

shoegirl wrote: »

Which is why I think most people tend towards home ownership. How many 50 or 60-something tenants do you see aside from those who may have decided to cash in on high prices a few years ago? Not many. The current rented market in no way caters for pensioners even on the full rate. 230 euros a week will not pay for much in Dublin.

You're talking about Dublin. Look at Berlin/Paris/Brussels/Madrid/Rome etc- only a very small minority of pensioners own their own apartment/house. And they almost universally avail of schemes not dissimilar to the Rent Allowance Scheme (along with a raft of other schemes). Retirement brings with it- entitlement to a raft of allowances- including housing.

shoegirl wrote: »

There is a massive housing time bomb that accompanies the pension time bomb that the current housing regime doesn't account for. We haven't seen the kind of poverty that will ensue when the current property-less adults hit pension age because right now pensioners tend to either own their own homes or are social housing tenants. There are very few adults hitting pensionable age who are hitting this situation at present, but if the current levels of ownership fall as they have done, and if rents don't drop relative to incomes, we could have a severe housing problem for older people in as little as 20 years time.

Why? Its not an issue in other European countries- its simply incorporated into a scheme of allowances. We have the structure in place to deal with it. For those who do own property- we now propose to make their estate pay for any nursing home charges- its a simple leap to add other benefits to the equation. Its how its functioned elsewhere for hundreds of years (notably France)- we seem to be going down that road come what may.

shoegirl wrote: »

For that reason I don't entirely dismiss the desire to own property - it is seen as part of the same system of long term security which is I think why far more people buy a home than take out a pension. You at least have the option of a modest state pension. There is no automatic housing for over 65s who retire without a private pension.

The Irish desire to own property- is almost unique- there is no comparison elsewhere in the world. A certain degree of this desire can be reconciled with how we were historically dispossed by the Brits- however we really take this to the limits.......

The modest state pension is to be raised to 68- and eligibility criterion tightened significantly- with the onus on people to provide for their own retirements.

There may not be automatic housing schemes for those who retire at 65 (or later) without a private pension- we certainly do have schemes in place for those who request them though (such as sheltered housing schemes with oncall assistance as required etc). It may not be a 5 star hotel- but it caters to what people actually need- and is ringfenced for pensioners. They also have the meanstested option of applying for Rent Allowance and other benefits- akin to any other citizen........

Most people who have purchased property since 1995 are going to find their investment costs significantly more than they pay for it, its not tax deductable- and hinders mobility. Traditionally the Irish have been mobile- youngsters didn't buy property- they inheritted it from their parents. We are already eating into this model with major revisions of inheritance rights, and charging for nursing home care by way of putting a charge on a person's estate. You could argue that this means a person's house is paying for their care- and so it is, but this is not about security- nor is it about provision of accommodation- its an illiquid asset with a charge against it.

We also have a hand-out culture here in Ireland. Once the ownership of a PPR is added into the means test for a pension (its excluded at present- but other assets are included)- ownership of a property may in fact be viewed more as a bother, than anything else.........

del046

Hello Miss Luce,
Where do you want to live ..... present location or other?
Suggest you look at inslovencyjournal.ie and find out what properties are being sold for their true market value e.g. 4 bed detached near rooskey co. roscommon sold by liquidator for E100k. Might be worth keeping tabs on while clearing debts and saving deposit.

miss luce

hi del046,
we want to buy in cork, in fermoy area. were renting for now, and love the area we're in, but prices are too dear for us. but our main problem is our debt, not huge, but holding us back!!!!

WaltKowalski

Price of house I love has fallen from 550k to 150k (Builders finish).
Great house in great location.
I've debt of €26k, savings of €15k.
I work in the public sector.
I really can't see the price falling any lower.
I really feel like I'll miss out on the opportunity of a lifetime if I can't buy this house.
Am I wasting my time approaching a bank looking for a mortgage??

Also my fella is unemployed - can't imagine that he'd help my application - though he hopefully won't always be unemployed.

D3PO

26k in debt then forget about it your wasting your time

WaltKowalski

D3PO wrote: »

26k in debt then forget about it your wasting your time

Thanks for the reality check. I can't help but feel disappointed though.

D3PO

WaltKowalski wrote: »

Thanks for the reality check. I can't help but feel disappointed though.

yep that sounds like some bargain. who knows it may keep on the market

what i would say to you however is get that debt paid off asap. I would assume your paying at least 7% on the loan and i doubt your getting that from the savings you have.

you need to put those savings off the debt now its a far more efficent way and makes much more financial sense than having savings with this debt hanging over you

WaltKowalski

D3PO wrote: »

you need to put those savings off the debt now its a far more efficent way and makes much more financial sense than having savings with this debt hanging over you

But then I'll have nothing.

If I had no debt, I'd probably get a mortgage for the amount I need now plus the amount of my debt.

It's very frustrating. All my own fault - I know! I enjoyed myself for far too long - and I'm paying the price now.

D3PO

WaltKowalski wrote: »

But then I'll have nothing.

.

on paper you have nothing. (dont mena to be harsh here) you can build savings up again when your debt is paid off. I understand you might want some rainy day money but until you clear that debt house ownership is out the window so why not pay it off as quick as you can and also in the most effiecent way

if your getting 2% interest and paying 7% on your loan your losing out on 5% of your savings annually (a little more if you take dirt into account) thats not efficent money management and will slow down your progress in terms of eventually becoming a home owner

Moonbeam

Personally I don't understand why people with huge debts are wanting mortgages and don't understand why they are not getting them.
I don't think the banks wanting you to have 1500k left in the bank after your mortgage every months is a crazy amount to ask.
Interest rates are at their lowest ever if they go up 3-4% you still need to make the repayments and be able to live with out getting in to debt.
Work out how much you need ot live every month with food,heating,phone,electricity,social life,kids etc and then taken in to account if mortgage rates did go up.
I think it is just sensible.

Treehouse72

Yes, people should understand that the bank requiring a certain amount left over after mortgage payments is a de facto stress test for higher interest rates. In fact, I think that is probably the entirety of the reason for it.

Shayman

OP, you have a credit history with the Credit Union. Have you not discussed the mortgage with them?

cynder

did you try the council. the afffordable housing scheme, or shared ownership?

the affordable housing only requires a 5% deposit.


http://www.affordablehome.ie/My-Local-Authority/Cork-County-Council.aspx

Affordable homes are provided by Cork County Council to help people who want to buy a home in Cork but cannot afford to buy on the open market. There are three divisions in Cork, which manage applications for affordable homes in Cork County:

North Cork - Office in Annabella, Mallow
South Cork - Office in Cork County Hall, Cork City
West Cork - Office in Clonakilty
If you want to apply, check that you meet the criteria below, download the application form available on this page and return it to the relevant council division. The contact numbers are on the top right hand corner of this page.


To qualify for an affordable home
You should

be a first time buyer (certain exceptions apply)
be in full time employment for at least 12 months or self employed for at least 1 year
As a guide, earn between €25,000 and €58,000 if you are applying on your own and up to €75,000 between both of you if you are applying with someone else. These are the approximate limits only – lower and higher income limits may apply depending on the type of scheme.






this? AREA 2 - GLANMIRE South Cork

From €150,000 to €200,000
How can I buy this? AREA 3 - BALLINCOLLIG South Cork

From €150,000 to €200,000
How can I buy this? AREA 4 - CARRIGALINE South Cork

From €150,000 to €200,000
How can I buy this? AREA 5 - MACROOM WEST South Cork

From €150,000 to €200,000
How can I buy this? AREA 6- MACROOM EAST South Cork

From €150,000 to €200,000
How can I buy this? AREA 7 - OVENS South Cork

From €150,000 to €240,000
How can I buy this? AREA 8 - BANDON South Cork
Bandon
From €150,000 to €200,000
How can I buy this? AREA 9 - KINSALE South Cork

From €150,000 to €200,000
How can I buy this? AREA 10 - MIDLETON South Cork

From €125,000 to €200,000
How can I buy this? AREA 11 - YOUGHAL South Cork

From €150,000 to €200,000
How can I buy this?

West Cork Affordable Homes
Tir na Greine
Enniskeane
From €150,000
How can I buy this? Cluain Carrigeach
Eyeries
From €150,000
How can I buy this? Ard na Greine, Sheskin,
Bantry
From €150,000
How can I buy this? Cluin Court
Allihies, Beara
From €150,000
How can I buy this? The Courtyard
Castletownbere
From €150,000
How can I buy this?

Homes Available in North Cork
Meadowside
Dromina
up to €157,500
How can I buy this? Baile Glais
Lombardstown
From €150,000 to €154,500
How can I buy this? Pairc na gCapaill
Kilworth
From €188,000 to €198,000
How can I buy this? Berry Hill
Castlelyons
From €150,000
How can I buy this? Allow Hill
Freemount
From €193,000
How can I buy this? Orchard Heights
Charleville
From €150,000
How can I buy this? Brindle Hill
Charleville
From €193,000
How can I buy this? Pairc na gCrann
Glanworth
From €150,000
How can I buy this? Dun an Oir
Kanturk
From €135,000
How can I buy this? The Beeches, Watergrasshill
Ard Cashel, Watergrasshill
From €170,000 to €180,000
How can I buy this? Town Heights,
Buttevant
From €135,000 to €144,000
How can I buy this? Hazelbrook, Spa Glen,
Mallow, North Cork
From €206,000
How can I buy this? Clonmore, Ballyviniter, North Cork

From €188,000 to €190,000
How can I buy this? Bearna Deara, Kildorrery, North Cork

From €149,000 to €162,000
How can I buy this? Droimneach, Bweeng, North Cork

From €177,000 to €198,000
How can I buy this? Tanyard Wood, Millstreet, North Cork

From €160,000
How can I buy this? Stag Park, Mitchelstown, North Cork

From €162,000 to €182,000
How can I buy this? Shanowen
Rathcormac
From €129,000 to €165,000
How can I buy this? Fairfield Rise
Minor Row, Millstreet
From €160,000 to €170,000
How can I buy this?

Treehouse72

Ah yes, Affordable Housing, Irish style:

You should

• be a first time buyer (certain exceptions apply)
• be in full time employment for at least 12 months or self employed for at least 1 year
• As a guide, earn between €25,000 and €58,000 if you are applying on your own and up to €75,000 between both of you if you are applying with someone else. These are the approximate limits only – lower and higher income limits may apply depending on the type of scheme.

http://www.affordablehome.ie/My-Local-Authority/Cork-County-Council.aspx


So there you have it folks. People earning FIFTY EIGHT THOUSAND EURO are in theory open to applying for AFFORDABLE HOUSING.

Anybody tempted to buy please just stop and think about that for a moment. €58,000 is almost twice the average industrial wage in Ireland. For Dublin, it is probably about 30% above the average wage.

"Affordable Housing" should be a state benefit in kind to help those who don't qualify for social housing but can't afford property on the open market. I guess in modern parlance these would be the "working poor". But in this Godforsaken, absurd country above-average earners can qualify. It is ten million miles beyond mind-boggling.

The market is still broken all to hell and will fall and fall until this absurdity and others like it disappear. Thinking anything else will happen is like thinking water will flow uphill.

Tail Wagger

miss luce wrote: »

hi. myself and my fiance have been renting for years. we've always said that we'd buy, but we never saved anything:mad: so here we are now, nearing 30 and still in same situation.
what we'd love to know is what we need to do. here is the situation............my partner is self employed, we have car loan, credit union loan, and small bit of credit card debt. i dont work, im a stay at home mom to our 2 yr old. we dont have any savings, but we've never been late with rent repayment once. we have life assurance policies alright. hope that might make us seem some bit sensible to bank!!!!
obviously we need to save for deposit for house, but just want to know, would a bank manager actually fall round the place laughing at us, if we went about getting a mortgage??
we dont have very much left after we pay our bills etc... to do lots and lots of savings, so we're thinking that its going to take us years to save for say a 10% of bout 25000, plus we'd need money for fees and furniture etc...
i prob sound stupid, but any advice would be much appreciated:o

You have all the ideas of a normal person who wants to have their own home and there is nothing wrong with that.
Unfortunately you have everything going against you with the cards you have put on the table.
To go to a Bank to day you need to be squeaky clean and owe nothing and certainly not be self employed.
The Banks unfortunately have the monopoly at the moment and thats where people like us loose out.
There has been some good advice in some of the posts above and if I were you take it and keep all your options open for the future.
One or two options might be open to you , put your name down for a local Council house(while your saving your deposit) if you are lucky enough to avail of a Council house, you would be entitled to buy after one year (I still think) and you might be able to move on from that.
Don't worry to much you have your hubby and family to think about, and you have time on your side for buying houses. If your patient it will come to you eventually.. be patient...and good luck.

cr1983

hi, i have a quick question:
Myself and my bf are currently in the process of applying for a mortgage, we had previosuly gotten pre-approved last month. Today we went in to actually proceed with full application as we have found a house we like. I have a good job, permanent etc but my bf who is a trainee accountant has 2.5 years left on his training contract and then upon completing all exams will be employed as a fully qualified accountant. But the mortgage advisor informed us today that becuase the contract expires in 2012 we could have a problem? We tick all the boxes other than this. The application has been sent for processing anyway so we wont know for another week what the outcome will be?
Just wonderingg if anyone has any experience on this? Should we get approval?

miss luce

so, lets just say that we had no debt, and bit of saving done, would it still go against us that my partner is self employed? even if hes self employed for last 5 years?

Tail Wagger

cr1983 wrote: »

hi, i have a quick question:
Myself and my bf are currently in the process of applying for a mortgage, we had previosuly gotten pre-approved last month. Today we went in to actually proceed with full application as we have found a house we like. I have a good job, permanent etc but my bf who is a trainee accountant has 2.5 years left on his training contract and then upon completing all exams will be employed as a fully qualified accountant. But the mortgage advisor informed us today that becuase the contract expires in 2012 we could have a problem? We tick all the boxes other than this. The application has been sent for processing anyway so we wont know for another week what the outcome will be?
Just wonderingg if anyone has any experience on this? Should we get approval?

I suppose in one way the Banks again are covering there ass! .. It's only a precautionary measure from their point of view..But it goes to show how the Banks are reacting to peoples credentials in these desperate times.
The probable worry is the contract with your boyfriend ending his contract in 2012.... They like you to sweat a little, you'll get the loan from some Bank.

Shayman

If he has accounts and stuff above board it woild be a big help but, you know, they're clammed up on lending to anyone at the moment. As was stated above, have you spoke to your Credit Union? Some of them do home loans. I think there's also council mortgages/loans? Maybe worth a call to your local TD? Try all avenues. Don't build your hopes too high but do remain hopeful.... Does that make sense?

miss luce

it does . thanks shayman. credit union also another good idea. this has really helped open my eyes up, after getting so much info from all. its great:D
ya, he has accounts and he has dealt with the same account since the begining, who does everything above board.

Tail Wagger

miss luce wrote: »

so, lets just say that we had no debt, and bit of saving done, would it still go against us that my partner is self employed? even if hes self employed for last 5 years?

The longer you hubby is employed the better.
Has he got his financial status and taxes up to date, as
was said earlier you need 3 years trading accounts.
As long as he can prove he is still trading and making money.

Best advice go to local Charted Accountant or your own if you know one
they will give you best advice.

WaltKowalski

Went to 2 banks about the possibility of getting a mortgage this week.
Both turned me down because of my debt - fair enough.
However - one bank told me they'd give me a mortgage of €200k if I hadn't debt and the other €220k.
I'm after a mortgage of €165k. My debt is much less than the difference.
It's very frustrating.

JellybeanJen

Hi All,

Sorry just joined the conversation.
Me and my Fiance are in the process of applying for a mortgage to build.
Well I say we but its my fiance only as I'm a carer for my daughter and this is not seen as income so its a single application.

We are getting the run around from the banks. We were told by a friend today to try our local council for a mortgage and we tick all their boxes except our house is 5m sq over the criteria. No way will they budge. Has anyone ever come up against this?

Also, on another note, with the council, does anyone know if you hand back the keys to a council house you have rented for 7 years do you get any money back?

People have mentioned this to me but some people think its an old wives tale!

Cheers

Kimia

JellybeanJen wrote: »

Also, on another note, with the council, does anyone know if you hand back the keys to a council house you have rented for 7 years do you get any money back?

People have mentioned this to me but some people think its an old wives tale!

Cheers

Why would you get money back? This would be interesting if anyone knew?

D3PO

JellybeanJen wrote: »

Hiwe tick all their boxes except our house is 5m sq over the criteria.

perhaps reduce the planned build by 5m sq ? Im not a building expert but I would imagine a minor change like this wouldnt cause issues in reapplying for PP its not going to cost much to get the architect to do it either.