Will I get a mortgage? Advice please

skmck

Just to outline my situation - I have just found the perfect house costing €160,000 - its basically only a shell, most work still need to be done to it & a contractor has given me a quote of €100,000 to complete to turn key stage. Therefore I would be looking for a mortgage in the region of €260,000.
I am a trainee accountant - qualify in Nov 2011. Im currently on €11.35 gross an hour - recently got a pay rise from €9 from Dec 2010. I will be getting another payrise come Nov 2011 but have not discussed figures with my boss yet.
My boyfriend has been working for the last 6yrs and gets paid €500 net a week.
We are both in our mid 20's & have approx. €50,000 in savings between us which should furnish the house.
Do you think we will be given a mortgage? Any help would be greatly appreciated.

Goldenlady

I hope ye do.
It really depends on debts too.
My partner and I have 50k in savings, he earns €100k a year, I earn €45k and the most the bank would give us is €143k taking in to account our debt ( 1 loan each) and the changes in the budget, before Christmas we were offered 300k!
This is with the bank so maybe try somewhere else - we are now!!
Good luck

skmck

Goldenlady wrote: »

I hope ye do.
It really depends on debts too.
My partner and I have 50k in savings, he earns €100k a year, I earn €45k and the most the bank would give us is €143k taking in to account our debt ( 1 loan each) and the changes in the budget, before Christmas we were offered 300k!
This is with the bank so maybe try somewhere else - we are now!!
Good luck

Oh god you've scared me now!! Thats an almighty drop from what you were previously being offered. Neither of us have any debts so hopefully that will stand in our favour!
Good luck with yours too

Dr. Dodger

Goldenlady wrote: »

I hope ye do.
It really depends on debts too.
My partner and I have 50k in savings, he earns €100k a year, I earn €45k and the most the bank would give us is €143k taking in to account our debt ( 1 loan each) and the changes in the budget, before Christmas we were offered 300k!
This is with the bank so maybe try somewhere else - we are now!!
Good luck

€50k in savings and €150k in earnings per annum and you're offered €143k. Do you already have a mortgage or are you still paying back the loan on the matching Ferrari's?

I'm not sure this is a fair example for the op?..

Goldenlady

Dr. Dodger, the point I was trying to make is that we have a good combined income and they were unwilling to give us more that this - when we initially met with the bank they offered us 5 times our combined income, how things have changed!
No Ferrari's Im afraid - My car loan has 2 years left on it and my partner has a personal loan with approx 2 years left also......
Its a mystery to us why they wont give us a mortage for more - we have no previous mortgages, I am a first time buyer and my partner is divorced but their mortgage has been cleared with the sale of their house a couple of years back. The point Im trying to make, is that the banks are not handing out money as freely as they were - regardless of income.
But, this is just our case, Im hoping it may not be the same for the OP

Dr. Dodger

Goldenlady wrote: »

Dr. Dodger, the point I was trying to make is that we have a good combined income and they were unwilling to give us more that this - when we initially met with the bank they offered us 5 times our combined income, how things have changed!
No Ferrari's Im afraid - My car loan has 2 years left on it and my partner has a personal loan with approx 2 years left also......
Its a mystery to us why they wont give us a mortage for more - we have no previous mortgages, I am a first time buyer and my partner is divorced but their mortgage has been cleared with the sale of their house a couple of years back. The point Im trying to make, is that the banks are not handing out money as freely as they were - regardless of income.
But, this is just our case, Im hoping it may not be the same for the OP

Unfortunately I think you're underestimating the impact debt has on mortgage applications. I think for every €1k owed, that's €10k off the amount offered. The €50 you have in savings right now is useless if you owe €55. You'd be much better off paying off the loans, saving you money on interest & saving for 6 months to build up a deposit. You'd probably be offerered €350+ if you did that in 6 months. With your combined earnings, you really shouldn't have a problem. Just my opinion.

The OP has no debt & they're both earning with a great chunk of savings. I doubt they're gonna have any problem getting the amount they're asking for as long as their credit history is good & they're both in permanent reliable employment.

Dr. Dodger

Although in saying that, I'm afraid OP I don't think it's a good sign when people starting quoting how much they get an hour when talking about mortgage applications unless you're talking big numbers and even then it doesn't sound like guaranteed income to a lender.

variety

skmck wrote: »

its basically only a shell, most work still need to be done to it & a contractor has given me a quote of €100,000 to complete to turn key stage

OP, the issue you might encounter is that the original engineer will have to confirm that they will be working on the project, because no engineer will ever stand over the work of another.

I would suggest you need a good broker, too - one that can package the application properly. If you approach the bank directly as a trainee, they will likely dismiss it out of hand. But Brokers have relationships with the lenders and can often get better results than you would on your own. Find one, of course, that doesn't charge you (ie that still only received their income from the lenders).

It's also particularly difficult in this environment to get money for works, but your savings profile is excellent, so you might be able to find a way through this. One bank in particular will lend (to the right candidate): 92% of purchase price, plus 100% of works.

skmck wrote: »

Im currently on €11.35 gross an hour
My boyfriend has been working for the last 6yrs and gets paid €500 net a week.

The most you could reasonably expect is 4.5 to 5 times income. Assuming you work a 40 hour week, your income is approx €23,500 gross p/a. Add your boyfriend's income of €33,000 (approximate), you total income might get you a mortage of €250,000 or thereabouts. But a lender could just as well refuse to take your income into consideration until you are qualified and in employment for a minimum of 2 years.

Goldenlady wrote: »

my partner is divorced but their mortgage has been cleared with the sale of their house a couple of years back.

Goldenlady, I'm surprised you're getting that response, given the level of income and savings. The only thing I can think of is that Lenders these days want accumulated savings. If your 50k is the proceeds of the sale of the your partner's property, and you do not save on a regular basis, then a bank will never look favourably upon this situation.
If I'm wrong, I would suggest you also go to a broker who comes recommended by others you know and doesn't charge a fee.

DoesNotCompute

Myself and my wife secured a mortgage of 152k in October last year with Coonan's Mortgage Group in Maynooth. Neither of us are resident in Ireland, my wife is unemployed, and I'm in the Civil Service (posted abroad), earning roughly 30k per annum after taxes. I had 40k saved when we applied for our mortgage, and the bank gave us 85% of the purchase price.

I was really impressed with the work of Coonans, as we were finding it impossible to get a mortgage from AIB and BOI. I think the broker's relationship with the lenders is what secured the loan for us.

Pkiernan

skmck wrote: »

Just to outline my situation - I have just found the perfect house costing €160,000 - its basically only a shell, most work still need to be done to it & a contractor has given me a quote of €100,000 to complete to turn key stage. Therefore I would be looking for a mortgage in the region of €260,000.
I am a trainee accountant - qualify in Nov 2011. Im currently on €11.35 gross an hour - recently got a pay rise from €9 from Dec 2010. I will be getting another payrise come Nov 2011 but have not discussed figures with my boss yet.
My boyfriend has been working for the last 6yrs and gets paid €500 net a week.
We are both in our mid 20's & have approx. €50,000 in savings between us which should furnish the house.
Do you think we will be given a mortgage? Any help would be greatly appreciated.

I think it will be exceedingly difficult for you, not so much because of the earnings, but rather because you are asking the bank to loan you far more than the property is currently worth.

Banks no longer care what the house could be worth if more money is invested in them.

Additionally the house is non-habitable in its current state, meaning that (a) you might be forced to get a commercial loan; and (b) the bank have NO chance of recuperating their money in the event of a default.

You will also have to check that you still have full planning permission to finish the house - it may have expired.

You will need structural reports verifying that the house (so far) was built as planned.

Speaking as one who is experienced in this area, I would strongly advise that you look for a house that is completed. The €100,000 quote from the contractor could go up. Renovating or finishing off a house can be a nightmare, both financially and emotionally.

Goldenlady

Thanks Variety, we might look at a broker option instead. We need to get it fast though as we have put an offer in on a house and it has been accepted!!! Half of our savings is the sale of the house, the other half we saved.

skmck - if you are sucessfull (Which I truely hope ye are) you might let me know which institute ye went with, might give us some hope. Good luck x

Bigcheeze

Not sure if I should start a new thread but does anyone know how banks have changed their lending criteria for mortgages ?

I hear lots of "the banks aren't lending" but very little specifics apart from there are no more 100% mortgages or trackers.

A couple of years ago it was not unusual to get loans of 4-5 times salary. Is this multiple still used or is it now more based around available cashflow ?

Dempo1

DoesNotCompute wrote: »

Myself and my wife secured a mortgage of 152k in October last year with Coonan's Mortgage Group in Maynooth. Neither of us are resident in Ireland, my wife is unemployed, and I'm in the Civil Service (posted abroad), earning roughly 30k per annum after taxes. I had 40k saved when we applied for our mortgage, and the bank gave us 85% of the purchase price.

I was really impressed with the work of Coonans, as we were finding it impossible to get a mortgage from AIB and BOI. I think the broker's relationship with the lenders is what secured the loan for us.

I have to comment on the above, i am not entirely sure if this is a promotional post for said brokers in Maynooth but based on the info you supplied in your post i am amazed you got a mortgage. Not withstanding a single income the fact your both none resident (albeit a civil service positing abroad) its quite extraordinary a mortgage was granted in these circumstances.

It is the relationship brokers had with banks that created a substantial part of the mess were in. You don't state what bank offered the mortgage, can we assume it was one of the infamous sub prime lenders permanently in residence at the high court?

who_ru

OP you are in your twenties - why the hell do you want to get up to your you know whats its in debt, especially now in this country. interest rates are going up very soon, cost of living is going up even though the Govt says it's going down.

why not wait 12-18 months, keep saving, houses will be cheaper in 12-18 months also, although interest rates will be higher.

i really cannot understand why anyone would want to buy now.

DoesNotCompute

Dempo1 wrote: »

I have to comment on the above, i am not entirely sure if this is a promotional post for said brokers in Maynooth but based on the info you supplied in your post i am amazed you got a mortgage. Not withstanding a single income the fact your both none resident (albeit a civil service positing abroad) its quite extraordinary a mortgage was granted in these circumstances.

It's not a promotional post. We will be resident as and from July this year, although this is hardly relevant. The missus is a qualified accountant in her native country, but cannot work in this part of the world until she completes her studies, so she will be employable in her field as and from next year.

Regardless of what you or anyone else may think, we are 100% confident that we are capable of repaying the mortgage. Obviously the bank agrees, otherwise they wouldn't have extended us the money.

Dempo1 wrote: »

It is the relationship brokers had with banks that created a substantial part of the mess were in. You don't state what bank offered the mortgage, can we assume it was one of the infamous sub prime lenders permanently in residence at the high court?

Haven Mortgages, actually.

Bigcheeze

Dempo1 wrote: »

I have to comment on the above, i am not entirely sure if this is a promotional post for said brokers in Maynooth but based on the info you supplied in your post i am amazed you got a mortgage. Not withstanding a single income the fact your both none resident (albeit a civil service positing abroad) its quite extraordinary a mortgage was granted in these circumstances.

It is the relationship brokers had with banks that created a substantial part of the mess were in. You don't state what bank offered the mortgage, can we assume it was one of the infamous sub prime lenders permanently in residence at the high court?

Being a civil servant posted abroad is not the same as emigrating. People working in Irish embassies and consulates typically go abroad for a few years, come back for a few years and repeat over their career. It sounds low risk to me.

Dempo1

skmck wrote: »

Just to outline my situation - I have just found the perfect house costing €160,000 - its basically only a shell, most work still need to be done to it & a contractor has given me a quote of €100,000 to complete to turn key stage. Therefore I would be looking for a mortgage in the region of €260,000.
I am a trainee accountant - qualify in Nov 2011. Im currently on €11.35 gross an hour - recently got a pay rise from €9 from Dec 2010. I will be getting another payrise come Nov 2011 but have not discussed figures with my boss yet.
My boyfriend has been working for the last 6yrs and gets paid €500 net a week.
We are both in our mid 20's & have approx. €50,000 in savings between us which should furnish the house.
Do you think we will be given a mortgage? Any help would be greatly appreciated.

Being completely objective i have to say it will be enormously difficult to get a mortgage based on the details provided.

Firstly as a trainee on a low wage and your partner earning €500 net poor week, you can easily surmise that the ratio of per annum earnings required (3xMain earner & 1x second earner) the amounts the banks will lend fall short of whats required.

Secondly and probably most pertinent, Banks are very very reluctant to lend on Properties requiring substantial renovation (i know as i have been there), even in the best of times it is difficult. With property valuations at an all time low, the valuation on your dream property will perhaps all way short of the mortgage required.

Thirdly its near impossible to get above 85% of the value of the property these days and again i know from experience, a renovation project will insure the banks will reduce the percentage they will offer, if at all.

I do wish you luck but my best advice is to avoid such an undertaking, go or a new build or completed property with a realistic valuation, there are loads of bargains out there, believe me, Add your €50k Savings to the construction costs!

Dempo1

Bigcheeze wrote: »

Being a civil servant posted abroad is not the same as emigrating. People working in Irish embassies and consulates typically go abroad for a few years, come back for a few years and repeat over their career. It sounds low risk to me.

On €30k per annum and a partner not working, i somehow doubt it. Secondly one would assume being resident in the state would be a minium requirement when applying for a mortgage. One wonders why someone would take out a mortage if they anticipated being out of the country for 6 years and one also wonders why such praise for what appears to be a broker awaiting sainthood?

skmck

Goldenlady wrote: »

skmck - if you are sucessfull (Which I truely hope ye are) you might let me know which institute ye went with, might give us some hope. Good luck x

I do have a meeting with a broker on thurs so fingers crossed it will all work out! Ill keep you posted!

Bigcheeze

Dempo1 wrote: »

On €30k per annum and a partner not working, i somehow doubt it. Secondly one would assume being resident in the state would be a minium requirement when applying for a mortgage. One wonders why someone would take out a mortage if they anticipated being out of the country for 6 years and one also wonders why such praise for what appears to be a broker awaiting sainthood?

30k net which is more like 40-50 gross.

Like I said, people posted abroad are still Irish civil servants. Coming and going is part of the job. They haven't emigrated.

I'm not bothered about the broker. People recommend businesses based on good experience all the time on boards. If the poster had a record of promoting the same business regulkarly then that's different.

D3PO

OP whilst off topic I think this needs to be said.

100K to finish out an empty shell is extortion. Forget weather you can get the money or not. Why woudl you pay that rediculous amount.

Rip off central. I cant believe nobody else has commented on this.

Cathmandooo

D3PO wrote: »

OP whilst off topic I think this needs to be said.

100K to finish out an empty shell is extortion. Forget weather you can get the money or not. Why woudl you pay that rediculous amount.

Rip off central. I cant believe nobody else has commented on this.

I guess it depends on the size and what work needs doing? Would wiring, plumbing, possible window replacement, insulation, plaster boarding, plastering, painting, decorating, flooring, lighting, kitchen & bathroom fit-outs not come to that sort of price?

Pkiernan

D3PO wrote: »

OP whilst off topic I think this needs to be said.

100K to finish out an empty shell is extortion. Forget weather you can get the money or not. Why woudl you pay that rediculous amount.

Rip off central. I cant believe nobody else has commented on this.

You have absolutely no idea as to how much work has to be done to the property.

Therefore it is your comment that is out of place.

:rolleyes:

D3PO

Pkiernan wrote: »

You have absolutely no idea as to how much work has to be done to the property.

Therefore it is your comment that is out of place.

:rolleyes:

No its not actually. Its easy to work out the size of the house based on construction costs per sq meter. Therefore its easy to work out what a fit out should cost.

its fair to assume your looking at a 4 bed, 2 bath detached shell circa 1300 sq ft assuming the builder isnt ripping them off on the shell / site cost aswell in which case its smaller.

Im not going into a breakdown of costs because its not for me to do. But it is way over the top to fit out a house of this configuration.

way to make yourself look silly though :rolleyes::rolleyes:

Pkiernan

D3PO wrote: »

No its not actually. Its easy to work out the size of the house based on consturction costs per sq meter. Therefore its easy to work out what a fit out shoudl cost.

Im not going into a breakdown of costs because its not for me to do. But it is way over the top.

way to make yourself look silly though :rolleyes::rolleyes:

From the original post:

1. You have no idea of the size of the house in question.

2. You have no idea as to what services are required e.g. water, sewer, power.

3. You have no idea if the roof is on.

4. You have no idea as to what external finished are required.

5. You have no idea if windows are in.

Therefore you have no idea as to the costs involved?

How on earth could you???

Are you telling me that you can quote to finish a house without knowing anything about what needs to be done?????? If so, I'd love you to sign a construction contract with me!

Please leave the personal insults out of it. I have not insulted you.

D3PO

Pkiernan wrote: »

From the original post:

1. You have no idea of the size of the house in question.

2. You have no idea as to what services are required e.g. water, sewer, power.

3. You have no idea if the roof is on.

4. You have no idea as to what external finished are required.

5. You have no idea if windows are in.

Therefore you have no idea as to the costs involved?

How on earth could you???

Are you telling me that you can quote to finish a house without knowing anything about what needs to be done?????? If so, I'd love you to sign a construction contract with me!

Please leave the personal insults out of it. I have not insulted you.

Its quite easy to estimate the max size the shell is and thats going on build costs from a year ago which given the continued downturn in the construction industry and likely to have come down and certainly havent gone up. My assumptions are based on this :rolleyes: and build costs per sq meter assume windows, roof, plastering, standard electrics and heating installed. and thats assuming the hosue isnt on a plot of any decent size.


And Im teling you its a rip off to pay 100k OR the alternative is the shell itself was a RIP OFF, one of the other, but it is one of these. Now it would be great for the OP to let us know what work is to be done for that 100k as thats likely the only way you will accept your wrong.

as for insulting you dont post sarcastic smilies if your not prepared to have your comment responded to. If your offended by being called silly god help you. I know its blue monday but thats a little extreme even for today.

by the way have a read of www.scs.ie you might learn a thing or two.

skmck

The house itself is 2700sq mtrs & it has a garage of approx 1200sq mtrs.

The roof is on the house & the windows are in & the first phase of the electrics is also complete.

No floors are in & walls need to be hardwalled & plasters - the upstairs floor is sound proof - in that concrete was laid instead of wood therefore adding to the expense. no plumbing is done & the quote includes underfloor heating, electrics need to be finished, stairs need to go in & architrave & doors still need to go in!

The quote also includes completing the garage - which includes a utility room, games room & shower room - all above work needs to be done to the garage too - all it consists of at the moment is bricks & a roof!

I have a meeting with the mortgage broker this evening so fingers crossed!!

Dempo1

DoesNotCompute wrote: »

It's not a promotional post. We will be resident as and from July this year, although this is hardly relevant. The missus is a qualified accountant in her native country, but cannot work in this part of the world until she completes her studies, so she will be employable in her field as and from next year.

Regardless of what you or anyone else may think, we are 100% confident that we are capable of repaying the mortgage. Obviously the bank agrees, otherwise they wouldn't have extended us the money.



Haven Mortgages, actually.

Hmmm, so why the need to use a Broker to get a mortgage approval. Haven, now let me think, o yes! Sub rime.

Whilst not wishing to be negative are you suggesting your wifes qualifications and circumstances dictate she will never be able to work in this country? fair play if a single income can cover the mortgage!

Dempo1

skmck wrote: »

The house itself is 2700sq mtrs & it has a garage of approx 1200sq mtrs.

The roof is on the house & the windows are in & the first phase of the electrics is also complete.

No floors are in & walls need to be hardwalled & plasters - the upstairs floor is sound proof - in that concrete was laid instead of wood therefore adding to the expense. no plumbing is done & the quote includes underfloor heating, electrics need to be finished, stairs need to go in & architrave & doors still need to go in!

The quote also includes completing the garage - which includes a utility room, games room & shower room - all above work needs to be done to the garage too - all it consists of at the moment is bricks & a roof!

I have a meeting with the mortgage broker this evening so fingers crossed!!

fingers crossed indeed, how do you propose a bank are going to value an unfinished building site for the purposes of a mortgage?

D3PO

skmck wrote: »

The house itself is 2700sq mtrs & it has a garage of approx 1200sq mtrs.

The roof is on the house & the windows are in & the first phase of the electrics is also complete.

No floors are in & walls need to be hardwalled & plasters - the upstairs floor is sound proof - in that concrete was laid instead of wood therefore adding to the expense. no plumbing is done & the quote includes underfloor heating, electrics need to be finished, stairs need to go in & architrave & doors still need to go in!

The quote also includes completing the garage - which includes a utility room, games room & shower room - all above work needs to be done to the garage too - all it consists of at the moment is bricks & a roof!

I have a meeting with the mortgage broker this evening so fingers crossed!!

In which case I stand corrected and appologise. The builder must have had serious cash flow issues to sell to you so cheaply.

That is a bargain and a half you have got.

Cathmandooo

skmck wrote: »

The house itself is 2700sq mtrs & it has a garage of approx 1200sq mtrs.

The roof is on the house & the windows are in & the first phase of the electrics is also complete.

No floors are in & walls need to be hardwalled & plasters - the upstairs floor is sound proof - in that concrete was laid instead of wood therefore adding to the expense. no plumbing is done & the quote includes underfloor heating, electrics need to be finished, stairs need to go in & architrave & doors still need to go in!

The quote also includes completing the garage - which includes a utility room, games room & shower room - all above work needs to be done to the garage too - all it consists of at the moment is bricks & a roof!

I have a meeting with the mortgage broker this evening so fingers crossed!!

Best of luck, let us know how you get on