What are your options if you want to buy and don't have the deposit?

minimanminifan

Hi All,
I am just wondering if anyone can comment on what the options are for someone in my situation. I earn just slightly over the threshold to qualify as a single applicant for the affordable housing scheme and as such that option is out. I am wondering if there are any other options for someone that can get a mortgage, in full time employment but does not have a deposit?

Is rent to buy the only option?

D3PO

Dont buy. If you cant afford to or arent financially responsible enough to save a deposit then your not the correct candidate to service a mortgage.

harsh ? perhaps but realistic most definatly.

minimanminifan

Thanks for the views.. i spent 6 years contributing to someone elses mortgage and when we split i had nothing to show for it, i would not say that i am not financially responsible either as i do have two savings plans in place but wont have a decent deposit for another 3 years... Thanks for the advise

Save.

Gaz

minimanminifan wrote: »

i do have two savings plans in place but wont have a decent deposit for another 3 years...

So wait 3 years, no ? Im saving for a deposit at the moment, I reckon ive another 2 years to go.

D3PO

minimanminifan wrote: »

Thanks for the views.. i spent 6 years contributing to someone elses mortgage and when we split i had nothing to show for it, i would not say that i am not financially responsible either as i do have two savings plans in place but wont have a decent deposit for another 3 years... Thanks for the advise

Like I said not trying to be harsh but realistic.

Honestly though if you cant save enough for a deposit for 3 years then you genuinely cannot afford a mortgage.

Interest rates are only going 1 way. You were only paying half a mortgage before and you have no savings to show for the 6 years ?

Even if you could scrape by on the monthly repayments after rate rises what about rainy day money ? what about the stamp duty your on the hook for as your not an FTB ? waht about your solicitors fees, whoat about furnishing the new accomadation.

No responsible underwriter in their right mind should even consider your mortgage application. Again im not attackign you Im jsut trying to open your eyes to reality.

bobbysands81

Many people in the past have taken a loan from the Credit Union (not affiliated to the Irish Credit Bureau) to cover the cost of the deposit.

seamus

bobbysands81 wrote: »

Many people in the past have taken a loan from the Credit Union (not affiliated to the Irish Credit Bureau) to cover the cost of the deposit.

This is fairly dishonest and I imagine the bank will look as hard as they can at people's deposits now with the tightened lending rules. Even in the good times, we got a cash gift from each of our parents and many of the lenders wanted letters from our parents saying that this was a gift with no strings attached and they had no interest in the property.

A lender will look at all your savings and bank statements and ask you - "where is this deposit coming from if you don't have it in any account?"

If you can afford to take a credit union loan and pay it back with interest over five years, then you can afford to save the same amount in 2 or 3 years. Property's not going anywhere in that time period.

bobbysands81

seamus wrote: »

This is fairly dishonest and I imagine the bank will look as hard as they can at people's deposits now with the tightened lending rules.

If you can afford to take a credit union loan and pay it back with interest over five years, then you can afford to save the same amount in 2 or 3 years. Property's not going anywhere in that time period.

Agreed.

Not advocating it mate - just saying that it did happen... and probably still does.

D3PO

bobbysands81 wrote: »

Many people in the past have taken a loan from the Credit Union (not affiliated to the Irish Credit Bureau) to cover the cost of the deposit.

Yeah and many of these people are the same people that are now or have in the recent past defaulted. When will the bubble mentality actually stop ?

if you can afford the repayments on a CU loan then you can afford to save the deposit.

D3PO

bobbysands81 wrote: »

Not advocating it mate - [\QUOTE]

I disagree. If your not advocating it why would you mention it ? Besides which the statement isnt 100% correct as some CU's do provide data to the Irish Credit Bureau

connundrum

D3PO wrote: »

some CU's do provide data to the Irish Credit Bureau

He mentioned this already, stating that people go for a loan with CU's not affiliated with the ICB.

bobbysands81

D3PO wrote: »

I disagree. If your not advocating it why would you mention it ? Besides which the statement isnt 100% correct as some CU's do provide data to the Irish Credit Bureau

I suggest you're not reading my post correctly then as I clearly state that not all CUs are not accredited to the ICB.

The question from the original poster was - "I am just wondering if anyone can comment on what the options are for someone in my situation..." I factually stated what folks in the past have done and then I clearly state that I am not advocating it.

D3PO

connundrum wrote: »

He mentioned this already, stating that people go for a loan with CU's not affiliated with the ICB.

depends how you read the comment. I read it as hes saying creidit unions in general are not affiliated. It doesnt state go to a specific CU with no affiliation.

D3PO

bobbysands81 wrote: »

I suggest you're not reading my post correctly then as I clearly state that not all CUs are not accredited to the ICB.

The question from the original poster was - "I am just wondering if anyone can comment on what the options are for someone in my situation..." I factually stated what folks in the past have done and then I clearly state that I am not advocating it.

Well I could have told him to go rob a bank and then said Im not advocating it. Point being why suggest something that you dont advocate ? Doesnt make sense to me.

bobbysands81

D3PO wrote: »

Well I could have told him to go rob a bank and then said Im not advocating it. Point being why suggest something that you dont advocate ? Doesnt make sense to me.

Because I was giving a factual answer to a question, that still doesn't mean that I'm advocating it!

But you obviously know better what I'm thinking than I do.

When a wrestler says "Don't try this at home" do you think that they are really advocating that kids DO "this at home"?

D3PO

bobbysands81 wrote: »

Because I was giving a factual answer to a question, that still doesn't mean that I'm advocating it!

But you obviously know better what I'm thinking than I do.

When a wrestler says "Don't try this at home" do you think that they are really advocating that kids DO "this at home"?

well lets just agree to disagree here. Either way I think we both agree that doign this would be irresponsible and that the OP should actually do what millions of people in thois country have done in the past and actually saved a deposit

Treehouse72

minimanminifan wrote: »

Hi All,
I am just wondering if anyone can comment on what the options are for someone in my situation. I earn just slightly over the threshold to qualify as a single applicant for the affordable housing scheme and as such that option is out. I am wondering if there are any other options for someone that can get a mortgage, in full time employment but does not have a deposit?

Is rent to buy the only option?

So you earn about €60,000? Meaning you earn about twice an average Irish wage and about 50% more than an average Dublin earner.

So let me ask you a genuine question: if you cannot afford a property (or indeed even a deposit for a property for Chrissakes!!) then who can?

amiable

D3PO wrote: »

Dont buy. If you cant afford to or arent financially responsible enough to save a deposit then your not the correct candidate to service a mortgage.

harsh ? perhaps but realistic most definatly.

Surely some people paying very high rent would find it hard to save for a mortgage?
I have a mate who pays 1200 per month in rent and is struggling to get a deposit for a house. Same bloke would love to buy a house.
Surely if you never miss a rent payment in over 4years of renting you are proving you can afford a mortgage repayment?

ntlbell

amiable wrote: »

Surely some people paying very high rent would find it hard to save for a mortgage?
I have a mate who pays 1200 per month in rent and is struggling to get a deposit for a house. Same bloke would love to buy a house.
Surely if you never miss a rent payment in over 4years of renting you are proving you can afford a mortgage repayment?

Why doesn't he move into cheaper accommodation?

It's not like it's hard to find.

amiable

ntlbell wrote: »

Why doesn't he move into cheaper accommodation?

It's not like it's hard to find.

Because anything much cheaper in the area isn't as nice and he and his wife have 3kids.
If only things were that easy

quozl

Treehouse72 wrote: »

So you earn about €60,000? Meaning you earn about twice an average Irish wage and about 50% more than an average Dublin earner.

I noticed this myself straight away.

This is a ridiculous thread.

To the OP, save a deposit. It may take a couple of years, but you have an excellent salary. You're in a falling market. At least having to spend some time saving the deposit may save you from yourself.

And rentToBuy is a great big scam for suckers. That was theoretical, but obvious, when it first came out, but there's a years worth of price-falls, and suckers paying over the market rate rents to prove it now.

D3PO

amiable wrote: »

Surely some people paying very high rent would find it hard to save for a mortgage?
I have a mate who pays 1200 per month in rent and is struggling to get a deposit for a house. Same bloke would love to buy a house.
Surely if you never miss a rent payment in over 4years of renting you are proving you can afford a mortgage repayment?

no not really.

firstly take normal interest rate levels and not the current levels. if your mate cannot afford to save hes going to struggle to have a mortgage of a grand a month (taking into account the extra costs of home ownership like repairs, house insurance, life assurance etc)

what in the world can he expect to own with that kind of mortgage when you apply a normal 6 - 7% interest rate ? Not a whole lot to be fair.

and thats without even considering the need to have some money put away for a rainy day.

secondly if he really wants to be a home owner he could either house share or find smaller less expensive accomadation so he could save.

Home ownership isnt a right its a privledge. If your not prepared to make the sacrafices associated with home ownership then you shoudlnt expect to be able to own a house. simple as.

D3PO

amiable wrote: »

Because anything much cheaper in the area isn't as nice and he and his wife have 3kids.
If only things were that easy

so then he moves somewhere smaller and not as nice.

People expect things to be handed to them on a plate. You make sacrafices to save your deposit if you have to. To some people that means not going out every weekend but ever second or third weekend, maybe it means no summer holiday for 2-3 years, to others it means taking the bus and selling your car, to others like your friend it means moving somewhere more affordable to be able to save

nobody is forcing anybody to make these sacrafices, its a personal choice. Do you want to own or not ?

amiable

D3PO wrote: »

so then he moves somewhere smaller and not as nice.

People expect things to be handed to them on a plate. You make sacrafices to save your deposit if you have to. To some people that means not going out every weekend but ever second or third weekend, maybe it means no summer holiday for 2-3 years, to others it means taking the bus and selling your car, to others like your friend it means moving somewhere more affordable to be able to save

nobody is forcing anybody to make these sacrafices, its a personal choice. Do you want to own or not ?

If only it was as black and white as that.
Oh sure he lives the high life all the time.
Makes no sacrifices.
Anyway no point in talking to people who know everything and have their mind made up.
Take care

Treehouse72

amiable wrote: »

I have a mate who pays 1200 per month in rent and is struggling to get a deposit for a house.

Tell your friend two things:

1. House prices are falling and so the size of deposit required is falling too. Eventually, it will reach a level that is saveable. In addition, rents might still be falling too, so the gap he needs to make up might close that way too.

2. Property prices dropped 10% in Q1 2010 (according to PTSB/ESRI). That's c.€3,000 per month per €100,000 on the value of a property. So, if your mate is renting a property for €1200pm, a yield calc suggests this property should cost c. €250,000. So he is saving about €7,000k per month by not buying the property he is now renting. In effect, he is "saving" €7k pm even if it doesn't feel that way.

amiable

Treehouse72 wrote: »

Tell your friend two things:

1. House prices are falling and so the size of deposit required is falling too. Eventually, it will reach a level that is saveable. In addition, rents might still be falling too, so the gap he needs to make up might close that way too.

2. Property prices dropped 10% in Q1 2010 (according to PTSB/ESRI). That's c.€3,000 per month per €100,000 on the value of a property. So, if your mate is renting a property for €1200pm, a yield calc suggests this property should cost c. €250,000. So he is saving about €7,000k per month by not buying the property he is now renting. In effect, he is "saving" €7k pm even if it doesn't feel that way.

He is saving and getting there.
He'll get there eventually and i'm sure he'll appreciate it when he gets there.
One thing i'm sure of is that he's probably glad he actually didn't have the money to buy 2 or 3 years ago.

Thanks

galah

seamus wrote: »

This is fairly dishonest and I imagine the bank will look as hard as they can at people's deposits now with the tightened lending rules. Even in the good times, we got a cash gift from each of our parents and many of the lenders wanted letters from our parents saying that this was a gift with no strings attached and they had no interest in the property.

A lender will look at all your savings and bank statements and ask you - "where is this deposit coming from if you don't have it in any account?"

If you can afford to take a credit union loan and pay it back with interest over five years, then you can afford to save the same amount in 2 or 3 years. Property's not going anywhere in that time period.

Can't stress the above post enough - the banks ARE looking for all sorts of statements, especially from the CU and other bank accounts. (granted, if you don't tell them you have a CU account, it may be different - but they will still want to see proof of where the deposit is coming from - they asked A LOT of questions when we went for our mortgage.) Also, the CU will ask you if you are currently applying for a mortgage when you take out a loan - so they will probably do some digging of their own...

We just went through this - I have a sizeable standing order into my CU account - for savings. They picked up on that, and wanted proof that I wasnt paying off a loan with the CU (which I wasnt).

billybigunz

amiable wrote: »

If only it was as black and white as that.
Oh sure he lives the high life all the time.
Makes no sacrifices.
Anyway no point in talking to people who know everything and have their mind made up.
Take care

What do you expect? Your question was beyond stupid. Thank god you and your friend are a dying breed.

Mary Hairy

There is always the old traditional way of doing it. Might be hard to find solicitors willing to do it hese days!

D3PO

amiable wrote: »

If only it was as black and white as that.
Oh sure he lives the high life all the time.
Makes no sacrifices.
Anyway no point in talking to people who know everything and have their mind made up.
Take care

fact of the matter is it is that black and white. Your friend could live in cheaper accomadation if he wanted to FACT and if your telling me theres nothing else he could cut down on to save then your the one not being realistic not me.