How much are banks giving out these days?

unattendedbag

Just a speculative question for now. I'm currently window shopping for houses with the intention of buying in a year or two.

Is there a rough rule or formula banks use for calculating how much an applicant is approved for when applying for a mortgage. My father seems to think it's 3 or 4 times your annual income but as usual he has nothing to base this on.

For example, if a male in mid to late 20's applies for a mortgage, earning just over €30,000 per annum, no other debts or loans, and in a permanent and relatively safe job. Also would aim to save 10% deposit. If above person applied now, what amount could he expect to be approved for. Ballpark figure of course.

Zamboni

unattendedbag wrote: »

For example, if a male in mid to late 20's applies for a mortgage, earning just over €30,000 per annum, no other debts or loans, and in a permanent and relatively safe job. Also would aim to save 10% deposit. If above person applied now, what amount could he expect to be approved for. Ballpark figure of course.

Unfortunately, I'd imagine that example would be declined any mortgage unless you have contacts/relatives in a bank and/or a secure public service job (not currently in teaching though).
The only person I know that in the last four years that got a mortgage (alone) was a central bank employee.

unattendedbag

In the above situation, if the above applicant was married to a person in the same situation, I take it that would dramaticall increase their chances?

Ive never applied for a mortgafe before so don't know how it works. If a person applied for a mortgage and got declined, does that damage their credit rating and affect another application in the future?

Zamboni

unattendedbag wrote: »

In the above situation, if the above applicant was married to a person in the same situation, I take it that would dramaticall increase their chances?

I would say so.

unattendedbag wrote: »

Ive never applied for a mortgafe before so don't know how it works. If a person applied for a mortgage and got declined, does that damage their credit rating and affect another application in the future?

No it does not.
But assuming that the mortgage provider does a credit check at the time of application it would be recorded as an enquiry on your ICB report.

http://www.icb.ie/credit_rating.php#q01

who_ru

Zamboni wrote: »

Unfortunately, I'd imagine that example would be declined any mortgage unless you have contacts/relatives in a bank and/or a secure public service job (not currently in teaching though).
The only person I know that in the last four years that got a mortgage (alone) was a central bank employee.

you're suggesting that only those people who are connected to the right people can get mortgages, in nearly all cases except for BOI, all irish owned institutions are nationalised or part nationalised and bailed out with our money, and they are now only giving out lines of credit to the friends and relatives ?

how f**ked up is this country really?

Zamboni

who_ru wrote: »

you're suggesting that only those people who are connected to the right people can get mortgages, in nearly all cases except for BOI, all irish owned institutions are nationalised or part nationalised and bailed out with our money, and they are now only giving out lines of credit to the friends and relatives ?

how f**ked up is this country really?

I know...

The last three mortages that I know of actually drawn down.

Couple - Father of the female is a bank branch manager
Couple - Female is a branch manager
Guy - Central bank employee

who_ru

Zamboni wrote: »

I know...

The last three mortages that I know of actually drawn down.

Couple - Father of the female is a bank branch manager
Couple - Female is a branch manager
Guy - Central bank employee

that's just completely sickening and totally wrong on so many levels, this should be national news, everyone should know about this.

Glenbhoy

who_ru wrote: »

you're suggesting that only those people who are connected to the right people can get mortgages, in nearly all cases except for BOI, all irish owned institutions are nationalised or part nationalised and bailed out with our money, and they are now only giving out lines of credit to the friends and relatives ?

how f**ked up is this country really?

It's only a suggestion, no need to take everything you read on an internet forum as hard facts.

To the OP, best talk to a mortgage broker who will give you the ball park figure you require, in your situation it is likely that you will need a mortgage broker to guide you through the process. Would your father be happy/be in a position to be guarantor/joint applicant? I think your income level may be too low for a single application and your partner's income would probably improve the application.

What you should do is clean up you and your partners bank accounts and work on that for the next 6 months to a year. You must start regular savings at about the level of mortgage repayments you envisage having, that is a necessity (nb, if you pay rent, rent plus savings should equal the prospective mortgage repayments).

Do not go into overdraft if possible, do not use use your account for online gambling, ensure there are no returned dd's etc, the better looking your bank statements are, the less chances the bank has to turn you down (and they are looking for excuses). You can still have a life, just do it with cash!!

Zamboni

who_ru wrote: »

that's just completely sickening and totally wrong on so many levels, this should be national news, everyone should know about this.

The other side is probably worse where bank managers are writing off mates/relatives business and mortgage debt as 'bad loans' and pursuing everybody else. Noonan is helpless but I digress...

Ray Palmer

who_ru wrote: »

that's just completely sickening and totally wrong on so many levels, this should be national news, everyone should know about this.

Not really anything new nor uniqely Irish. Most employees get treated better when using the companies services. Lots of insurance companies do a friends and family discount for employees, meaning just knowing means you get a discount.

You might be shocked to hear Diageo sell beer cheper to their employees:eek:

Bank employees also get a better rate. I worked in one issurance company and their direct competator gave free insurance to employees while the company I worked for didn't even give a decent discount. I felt that was wrong.

Glenbhoy

Ray Palmer wrote: »

Bank employees also get a better rate.

In many cases it doesn't make sense to take the better rate offered by the bank that an employee works for as there is tax payable on the saving made.

If bank employees etc are getting loans at present it is because they are better prospects, it is my understanding that local managers etc do not have that much clout with regards to the awarding of loans etc. Virtually all significant loan decisions are taken at corporate HQ level, whilst a manager might be able to put in a good word here and there, the final decision rests with the corporate team and they will only grant a loan if the numbers stack up. Banks will be shedding a lot of jobs over the next few years and employees do not want to make any decisions that will count against them.

awec

Glenbhoy wrote: »

In many cases it doesn't make sense to take the better rate offered by the bank that an employee works for as there is tax payable on the saving made.

If bank employees etc are getting loans at present it is because they are better prospects, it is my understanding that local managers etc do not have that much clout with regards to the awarding of loans etc. Virtually all significant loan decisions are taken at corporate HQ level, whilst a manager might be able to put in a good word here and there, the final decision rests with the corporate team and they will only grant a loan if the numbers stack up. Banks will be shedding a lot of jobs over the next few years and employees do not want to make any decisions that will count against them.

You are correct as far as I know, the information is passed upward and the decision is made and passed back down to the branch.

I don't think bank employees can "put in a good word" for mates etc as as far as I know they don't actually know who will review the application.

Bobeagleburger

Maybe concentrate on saving a bigger deposit if possible.

That perhaps will mean you'll have to wait 4-5 years instead of 1-2, but more than likely you'll save yourself quite a bit in the process from the house being devalued :cool:

Marco85

in the same boat meself. missus works in the civil service and im a taxi driver. currently have 20 grand saved between us and looken to get a house within the next 2 years. is it such a big advantage to have someone working in public service?

The_Honeybadger

Not sure about some of the comments here, I know of two people who recently drew down mortgages successfully:

1. PS employee on 30k, mortgage was 90k with a 10% deposit
2. Couple both in service industry private sector jobs, but one had inherited a house in the past which is now rented, not sure what the mortgage was

Both had an awful time trying to actually draw down the money, and were made jump through hoops for ages with little feedback on whether they would be finally approved, but in the end they got the money. If the bank believes you are low risk and you can repay the money then there is a chance you will be approved. The problem with most people nowadays is that they don't have the job security to apply, companies with long histories are closing down every day (at a slower rate than the past few years but it's still happening), very few peoples jobs in the private sector are truly safe at the moment. Prices are still falling, so many who are refused mortgages will probably be thankful for it at some stage in the future if / when things stabilise and prices return to sanity. It amazes me the amount of my friends (early thirties) who are still obsessed with owning a home, and would be into the bank in the morning if they thought they could get a mortgage. Obviously the banks have their own problems and don't have the funds to approve mortgages for all applicants but the truth is that most people being refused mortgages are not safe bets for the bank and that is why they are being refused.

robd

Was able to get approval for around 4.5 times a HSE wage as a couple. Only used the HSE wage and didn't bother with mine as I contract. Have a very significant cash sum from sale of a previous house before crash. Haven't tried to draw it down yet.

The way EA's are pricing houses in some of the better parts of Dublin you'd swear the banks were giving out 10 times income.

Snakeblood

robd wrote: »

Was able to get approval for around 4.5 times a HSE wage as a couple. Only used the HSE wage and didn't bother with mine as I contract. Have a very significant cash sum from sale of a previous house before crash. Haven't tried to draw it down yet.

The way EA's are pricing houses in some of the better parts of Dublin you'd swear the banks were giving out 10 times income.

I think it's mostly the house owners, not the EAs that are pricing high. It's people who bought the house at an exorbitant rate and can't pay the mortgage, need to sell but need to sell at a price that will pay back their debts, or people who can't get used to the fact that their house isn't worth what it was six years ago. I don't have any great love for estate agents, but if they could price something to sell, to bring in money, they would.

Zamboni

Snakeblood wrote: »

I think it's mostly the house owners, not the EAs that are pricing high. It's people who bought the house at an exorbitant rate and can't pay the mortgage, need to sell but need to sell at a price that will pay back their debts, or people who can't get used to the fact that their house isn't worth what it was six years ago. I don't have any great love for estate agents, but if they could price something to sell, to bring in money, they would.

Chasing the market down, it's like watching a train crash in slow motion.
These people will ultimately screw themselves into a downward spiral and end up selling at the worst point i.e. the current market value when their debts peak.
It's a tragedy.

robd

Snakeblood wrote: »

I think it's mostly the house owners, not the EAs that are pricing high. It's people who bought the house at an exorbitant rate and can't pay the mortgage, need to sell but need to sell at a price that will pay back their debts, or people who can't get used to the fact that their house isn't worth what it was six years ago. I don't have any great love for estate agents, but if they could price something to sell, to bring in money, they would.

In the more mature/better markets most of what is for sale is Executor Sales. Very few are in decent condition where they would indicate they are trader uppers or emigrants or mortgage trouble individuals.

Inheritance tax payable within 6 months of death based on probate valuation and property taxes which aren't deferrable to sale of estate would do something to resolve this. There's no incentive for people not to sit on their hands on vacant property. NAMA's not helping by leaving whole blocks of apartments vacant. Not for rent or for sale.

I do understand that an EA can only sell a house if they get it on the books but it's very frustrating to see the waves which the market seems to follow. I see houses going up at the moment at circa 50% more than a realistic valuation viz-a-viz what has sold in recent months for an area. So 50% increase means a 30% haircut required to get it back to market clearing price.

To say most of the EA's I come across are desperate is a gross understatement. Very little cop on or basic communication skills even today; 4 years into the crash. It's like pulling teeth to get an update on where a house is at even after making a realistic non low ball offer.

Slow moving train crash is the word alright.

Spiritofthekop

robd wrote: »

In the more mature/better markets most of what is for sale is Executor Sales. Very few are in decent condition where they would indicate they are trader uppers or emigrants or mortgage trouble individuals.

Inheritance tax payable within 6 months of death based on probate valuation and property taxes which aren't deferrable to sale of estate would do something to resolve this. There's no incentive for people not to sit on their hands on vacant property. NAMA's not helping by leaving whole blocks of apartments vacant. Not for rent or for sale.

I do understand that an EA can only sell a house if they get it on the books but it's very frustrating to see the waves which the market seems to follow. I see houses going up at the moment at circa 50% more than a realistic valuation viz-a-viz what has sold in recent months for an area. So 50% increase means a 30% haircut required to get it back to market clearing price.

To say most of the EA's I come across are desperate is a gross understatement. Very little cop on or basic communication skills even today; 4 years into the crash. It's like pulling teeth to get an update on where a house is at even after making a realistic non low ball offer.

Slow moving train crash is the word alright.

Agree with all that.

The worst part is that many of these houses need massive money put in to fix them up. But the owners are still looking for 2006 prices even though the whole house needs a massive make over.

I dont care what anyone says about Dublin prices!...complete rubbish. Dublin is so way over priced & value for your buck is pitiful.

Anyone with half a brain would not pay anything close to what most of the asking prices are on Daft.ie

House prices will drop much further...very slowly but eventually something will give & you will see another massive drop over the next few years.

This country got so far ahead of itself it will take years & years of slow house property prices dropping.

Young people & over seas business don't want to be here anymore.

Tourists finally are realizing this country is a complete rip off for a holiday in a country with a cheap ass half done transport system & some of the most depressing weather around.

Until we all take a good honest look at ourselves in the mirror & start over again....there will be a dark cloud firmly sitting over this country.

big syke

I applied for a mortgage from AIB. Apparently no matter the size or type of the mortgage you have to have income of €2,000 net per couple per month plus the mortgage payment and €250 extra per child. In my case i would need to be netting €2250 plus repayments €600 so €2850 net income after tax...Needless to say as a one income family we got REJECTED!

Aye Bosun

I'm single, mid 30's, gross income less just less than €30,000 per annum. No previous loans, no credit card debit, deposit of €15,000. Got mortgage of €140,000 in Aug 2011 from BOI.


OP don't listen to the folk on here, you'll never really know what the banks will say until you approach them yourself.


And no I have no connection with anyone in any bank or financial institute.

jmayo

Zamboni wrote: »

Chasing the market down, it's like watching a train crash in slow motion.
These people will ultimately screw themselves into a downward spiral and end up selling at the worst point i.e. the current market value when their debts peak.
It's a tragedy.

You can see this on the likes of collapso.ie where for instance someone put a house up last year at an asking price that was already about 10-20% above average asking prices in the area which is also about 10% above the actual selling prices.
Then little by little over the the course of almost a year and a half the price has been dropped by 8-15% at a time.
Each time they are chasing the actual asking prices in the area.
Eventually they are down to a price that is maybe 40-50% of their original asking price and they still haven't sold.

big syke wrote: »

I applied for a mortgage from AIB. Apparently no matter the size or type of the mortgage you have to have income of €2,000 net per couple per month plus the mortgage payment and €250 extra per child. In my case i would need to be netting €2250 plus repayments €600 so €2850 net income after tax...Needless to say as a one income family we got REJECTED!

I have heard this as well.
IMHO having €2,000 net plus €250 per child over the mortgage repayment is now totally pulling the p**s.
Or are they expecting mortgage interest rates to go back to the old days of 15% plus ?

Aye Bosun wrote: »

I'm single, mid 30's, gross income less just less than €30,000 per annum. No previous loans, no credit card debit, deposit of €15,000. Got mortgage of €140,000 in Aug 2011 from BOI.


OP don't listen to the folk on here, you'll never really know what the banks will say until you approach them yourself.


And no I have no connection with anyone in any bank or financial institute.

Mind telling us where you work ?

Aye Bosun

I'm not putting my company name up here as it's not relevant and I prefer to keep myself anonymous but I work in admin and the business has nothing to do with the financial world. I wasn't sucked in by the credit craziness in this country over the last 10+ years. I have worked for everything I own and never taken a loan out before. If I wanted a new car I saved for it rather go the route of 'I see, I want now', that attitude has destroyed this country.
OP If you find the right property, at the right price and meet the credit criteria and jump through the hoops the bank ask when they ask, there is no reason why the banks won't lend.

jmayo

Aye Bosun wrote: »

I'm not putting my company name up here as it's not relevant and I prefer to keep myself anonymous but I work in admin and the business has nothing to do with the financial world. I wasn't sucked in by the credit craziness in this country over the last 10+ years. I have worked for everything I own and never taken a loan out before. If I wanted a new car I saved for it rather go the route of 'I see, I want now', that attitude has destroyed this country.
OP If you find the right property, at the right price and meet the credit criteria and jump through the hoops the bank ask when they ask, there is no reason why the banks won't lend.

Sorry by where I meant are you public sector employee or private sector company.
I didn't want to know company names or anything like that.
I probably should have said what you work at ?

Just trying to figure out who are best bets for getting mortgages.
O know some public sector jobs help as they have way more security of employment.

Join the club about buying what you can afford.
The last 4 cars I have bought were bought with cash.
Thus I have nevr owned new car nor BMW, etc.

Sadly one of them blew up and left me out of pocket to tune of 5 odd grand.
Now just wondering if I should start a campaign to get a bailout for that.

Aye Bosun

I'm private sector!

Supercell

Lot of silly scaremongering here.
We just signed contracts on a house this week, as a single income couple in the private sector, not related to the banks in any way.
I think the main problem here is that people haven't saved the deposit themselves, or are looking for boom time size bumper loans rather than realistic ones. We were approved for 4X times my gross wage over 25 years with no hassle at all, in fact it was approved within a week of applying (BOI).

foxy06

It seems the only people who think getting a mortgage now are the ones that just got one.

ShadowHearth

Me+misses got approved for 80k

Both of us combined is less then 40k per year.

We are prety much on low income, but for last 6 years it was stable and there was income each week.

Our rent was payed by online banking so they sow every single payment for rent. I was told its very important for them.

When we were applying we had 1 loan which had around 500 left to pay out. Visa was only -200 and now cleared.

They give mortgages, but they are being more realistic now.

Mister Dread

Aye Bosun wrote: »

I'm single, mid 30's, gross income less just less than €30,000 per annum. No previous loans, no credit card debit, deposit of €15,000. Got mortgage of €140,000 in Aug 2011 from BOI.


OP don't listen to the folk on here, you'll never really know what the banks will say until you approach them yourself.


And no I have no connection with anyone in any bank or financial institute.

That is crazy risk taking from the banks.

Aye Bosun

Why do you think that?
I am easily able to manage my mortgage installments, in fact I would be able to manage double the payment, if required and I put some aside in my saving account every month. Like another poster said I have been renting for 10 odd years and have a proven history of meeting my rental payments each month which where higher then the my mortgage repayments are now.