What is stopping you from buying a home?

buzzerxx

the super rich keep getting paid by the dopey workers,aib keeps paying the bond holders,even though they invested in non secured bonds,which means they should NOT be paid the billions they wherewhen the banks sank
the stinkiun robbing politicians are in with tyhe bond holders and laughing at the workers,?????makes me want to see them greedy bastards die,vote vsinn fein because the rest of them greedy politicians have all got their stint and proved that they are all the **** talking same money grabbing lying,selfish ,inherited pond scum,

Zamboni

^^^^^^^^^^^^^^^^^^^
I love that this post was edited.

Max Power1

Howjoe1 wrote: »

most seem to be lending to public servants only.

spoke with an auctioneer recently who told me stories of customers being turned down despite having 70% cash deposit and her college being refused because her job as an estate agent as seen as too unsecure.

good luck to you if you got offered mortgage. are you in the public service?

No, employed in the private sector, with a large multinational online payment company. I was advised by the bank that they treat this particular company as having the same job stability risk as the semi-states.

Although, it wasnt strictly "offered" a mortgage, it was just verbal confirmation that, should we have the stated level of deposit, 8-12%, that they would give us a mortgage

Armin_Tamzarian

1. Prices will on average fall by another 10% in 2012 IMO.

2. The future of the Euro.
My savings are in foreign currency and and a Euro collapse / devaluation would probably be beneficial to me.

3. No need to rush, I really can't see a bounce back.
There may be a slight surge of cash sales when buyers believe the bottom has been reached but this would be short lived.


I think that in a lot of places house prices are close enough to what you might call value.
That isn't to say though that they won't sink below this point.

Dannyboy83

http://www.daft.ie/searchsale.daft?id=636742
70k for a 4 bed house in Millstreet -

Would it not cost more to build a new house than that?.

KIERAN1

Most of the people in Ireland who have mortgages can not afford houses their borrowing from banks.

A mortgage is a renting scheme, until you pay the last payment, only then is that house yours.The bank has all rights to the house until the day you pay the final payment, however long that is 35 years or 40 years.

FlashD

Raskolnikov wrote: »

For example, if you're in Dublin and earning €40k, you should be able to afford a bog-standard semi in Lucan at 3x your salary (€120k) with a 10% deposit.

That's a nice example, problem is that I know fewer people earning 40k these days, those that were are now unemployed and having to come back into the job market at a lower salary....if they can. Everyone is getting squeezed tighter. If salaries keep dropping then prices are going to keep dropping also, that includes house prices.

FlashD

Dannyboy83 wrote: »

http://www.daft.ie/searchsale.daft?id=636742
70k for a 4 bed house in Millstreet -

Would it not cost more to build a new house than that?.

I wouldn't even pay 70K for that.

Dirk Gently

It all very much depends on individual cases. Any herd mentality thinking is well, just herd mentality thinking.

I decided to buy over a year ago. Reasons being the house was half its former value at the height of the boom and affordable to me. I thought about it for a year or so before actually getting active in looking for a house. When I finally bought I could say the following with confidence.

1. mortgage repayments were manageable, even allowing for a future 50% cut in wages. (as it turns out I took a 40% cut in wages for a while so was lucky to have factored that in) Repayments are several 100 euro a month less than what it would cost me to rent a one bed apartment.

2. The house was cheap, still a good bit cheaper than current market prices.

3. The people selling wanted a quick sale, it was their parents home and they were splitting the money between the siblings so I was able to name my price without too much opposition. no one was buying and I had bank approval and was willing to buy at the right price. Amazing the stops that are pulled out for you when you have approval as opposed to someone applying for approval. estate agents know the approved person is the one to appease and recommend to their client. They wont budge if you are still only applying for the loan.

4. well located, easy to get to work, big garden, spare rooms if I need to get lodgers in to help pay bills. Didn't need any work done and got appliances etc included in the sale.

So, for me it made sense to buy. Everyones circumstanes are different. I had an advantage in that I got approval at a time when no one was getting approved bar a handful of first time buyers so had a good bargaining position with the seller. I think one of the biggest problems though is banks not lending. A lot of people are looking for approval but can't get it which means demand is artificially low imo. I think more people would buy if they had access to the loans. I held off till all the pieces where in place for my own personal circumstances. I still check the market every now and again and haven't come across a better buy yet for myself. It's all down to what you need and what your prepared to pay for it. There are some good buys out there, not every situation is a "mad to buy now" situation and at the end of the day its your home, not a quick flip to make a profit so you have to weigh up the price of a home v's any theoretical loss on value of the property and see if you can live with that. I can.

. Renting allows me to save up a pool of real money and I can move or downsize if the need arises. Debt is a modern form of slavery, I will avoid it.[/QUOTE]


You'd still be able to save the same amount, maybe more with a mortgage However yeah you would not be able to move or downsize !

But renting for whole life and have nothing to show for it, does not appeal to me. and their is a difference between owning a house and renting, but may be as difficult to explain as smoking to a non smoker

Hope when I retire in 30 yrs time or so I will be able to sell my house for a decent lump sum, buy a smaller house and an apartment abroad in a nice cliamete Thats the plan anyway ....

Dannyboy83

Just thought I would update this:

CSO: House prices fell at faster rate in January

Read more: http://www.breakingnews.ie/ireland/cso-house-prices-fell-at-faster-rate-in-january-541506.html#ixzz1ng5Em6Oz
The average price of residential property in the Republic of Ireland fell by 1.9% in January of this year, compared to 1.7% in December, according to Central Statistics Office figures.

swampgas

The Independent has two different takes on the same source: one appears upbeat, one downbeat. Just goes to show how two different journalists can present the same story.

Potential buyers anxious to enter property market: Daft survey

Home-buyers not planning to take plunge for two years

Sala

http://www.rte.ie/news/2012/0228/cso_jan.pdf

Price drops accelerating according to the CSO. That's stopping me... I have figured out if I bought now versus next year if same price falls continue I would save 250per month on a mortgage. Or get a better house.

maninasia

The major determinant of house prices is the availability of credit.

The banks are still in the process of building up their deposit/loan ratio, this is the major determinant of sucess for banks now (it is the opposite of how a banks success is usually measured if you think about it!), many would rather to cut their loans to almost zero if they could as this could bring the ratio up faster.
So without credit growth there can be no price growth.
Unless other banks from outside Ireland start to lend money (and that would be a huge risk for them to lend to citizens here except for the minority of people who are gainfully employed in secure positions, who can already get credit if they really need it) I can only see house prices going down further.

There is also the undershooting effect that will be caused by human psychology, just as people were eager to buy a house before it became more expensive, they are also anxious not to buy a house when it should be cheaper next year.

maninasia

Howjoe1 wrote: »

most seem to be lending to public servants only.

spoke with an auctioneer recently who told me stories of customers being turned down despite having 70% cash deposit and her college being refused because her job as an estate agent as seen as too unsecure.

good luck to you if you got offered mortgage. are you in the public service?

Which is an anecdotal but backs up my explanation that if the banks can find a way to refuse to lend out money they will do that. They are also wary of the new bankruptcy legislation I am sure.

antoobrien

maninasia wrote: »

There is also the undershooting effect that will be caused by human psychology, just as people were eager to buy a house before it became more expensive, they are also anxious not to buy a house when it should be cheaper next year.

Throw in the fact that we don't know how much it will cost to run a house in 2/3 years time. There will (hopefully) be a proper property tax & water charges be brought in nationwide (not just for group water schemes).

Right now it costs say 10k p.a. to run a house i.e. mortgage, utilities etc (unrealistically low I know). There's a possibility that this will go by by (depending on who you listen to) anywhere between €500 & €2,000 per year in 2/3 years. That will deter some for a while.

krd

There's loads of houses in dublin now for under 70k

Look at this three bed in Finglas - only €57,500.....You'd nearly be able to afford that on the dole.

http://www.daft.ie/searchsale.daft?id=591346

antoobrien

krd wrote: »

There's loads of houses in dublin now for under 70k

Look at this three bed in Finglas - only €57,500.....You'd nearly be able to afford that on the dole.

http://www.daft.ie/searchsale.daft?id=591346

It's in finglas, enough said (yes I did live there for a while).

Scofflaw

maninasia wrote: »

There is also the undershooting effect that will be caused by human psychology, just as people were eager to buy a house before it became more expensive, they are also anxious not to buy a house when it should be cheaper next year.

That's not really the psychological undershoot, I think - more like perfectly rational behaviour. A psychological undershoot would be more like people mentally valuing houses under their proper value because they're used to prices going down.

cordially,
Scofflaw

maninasia

The psychological aspect would mean overexagerrating the potential drops in the future and therefore maintaining a pessimistic outlook when most indicators have turned positive.
For instance when rental yields have increased substantially or employment rates have levelled off or are increasing.
Human decision making is heavily influenced by emotional reactions. Once burned twice shy.

Hayte

For a very long time in this country, there has been an odd consensus about the importance of home ownership. So much so that its fairly common for people to say to me that renting is equivalent to throwing your money away. Its all very strange.

I'm in my late 20s and to be honest, the idea of signing up for a 30 year loan in the amount of several hundred thousand euros is kind of insane. You become bound to the oscillation of the property market, you can't move anywhere without finding a buyer and going through the arduous process of exchanging property rights and the logistics of financing a move.

In 30 years time I probably won't even recognize myself so think about that for a second - how much your fortunes, your attitude, your relationship with co habitants may change in that time. I understand the need for families to have stability - the kind that doesn't require you to move when the owner decides its time to think about selling up for a profit. But for everyone else other than the filthy stinking rich, I think buying is just nuts. Alot of things have to stay constant for a very long time in order for you to fulfill your obligation to your lender.

GlobalNomad

Finn myself I see lot similarities in Finnish 1990 recession to what is happening in Ireland now. Finland experienced nearly 20 years of continues economic growth from 1970-1989. Banking regulations where ripped apart -87 to enable economic growth. That together 1% unemployment created unbelievable property bubble that burst 1990 when our metal and paper industry stopped getting almost free material and energy from Soviet union. Economy collapsed leading to 20% unemployment. Property prices crashed.

Chart below shows how prices developed after that and could be a good guide on what to expect in Ireland. Red is the whole country and blue Helsinki area (comp. Dublin)

FreudianSlippers

I think it has become affordable to buy a home again and I have been looking a bit recently on daft but I find that some places are still overpriced and the supply of decent places seems to be slim.

It's like everyone that has a nice house and is comfortable is staying put and waiting for a rebound. Some of the ****e for sale at the moment is unreal and I don't want a project.

thebman

Quality is poor, don't have the money and won't until a few years in new job ( might see what I need do to get mortgage at that point), lack of job security in two ways.

1. No job in private sector is secure at moment.
2. Nobody stays in job in one place forever anymore and owning a house, limits your options on where you can apply, distance wise so is unappealing unless your about to start a family.

molloyjh

The only reason I'm not buying a house is because I have one already that is in negative equity. If not for that I'd be able (and willing) to buy. But the cost of a new house, stamp duty and the negative equity from the current house makes it completely impossible for me to move.

Which would be grand but for the fact that I'm looking to start a family and the current house and location aren't ideal for it.

Villa05

molloyjh wrote: »

The only reason I'm not buying a house is because I have one already that is in negative equity. If not for that I'd be able (and willing) to buy. But the cost of a new house, stamp duty and the negative equity from the current house makes it completely impossible for me to move.

Which would be grand but for the fact that I'm looking to start a family and the current house and location aren't ideal for it.

and they will still come on this site and declare that renting is dead money!

donegal_road

3 bed semi in North Donegal for 20k http://www.mccauleyproperties.com/APT725.htm

FreudianSlippers

donegal_road wrote: »

3 bed semi in North Donegal for 20k http://www.mccauleyproperties.com/APT725.htm

Yeah, but it's in Donegal.

AlekSmart

donegal_road wrote: »

3 bed semi in North Donegal for 20k http://www.mccauleyproperties.com/APT725.htm

3 Cheers and a big Búladh Bos for McCauley Auctioneers for being the first Auctioneer I can recall to be TRUTHFUL in their advertising.

"In POOR Condition"

They could just as easily have gone down the "Luxurious starter-home,in need of a little TLC" blather......

Well done,perhaps there IS hope for reality becoming an Irish trait after all !! :eek:

donegal_road

FreudianSlippers wrote: »

Yeah, but it's in Donegal.

yes but you could buy it as your country retreat, take a year out and write that book you've been planning but haven't had the peace to do, walk the local beach in the evening, go home and write in front of the fire with no one to bother you

washman3

Could a person buy that house for 20k and the one attached for the same and make one house from the 2.?? would then be a nice detached house. could double the size of some of the rooms making it possibly a 4 bed (depending on layout). and because its a ghost estate it would be exempt from property tax.
Just an opinion...

AlekSmart

donegal_road wrote: »

yes but you could buy it as your country retreat, take a year out and write that book you've been planning but haven't had the peace to do, walk the local beach in the evening, go home and write in front of the fire with no one to bother you

Ermmm..I think that's been tried already......

http://www.donegalnow.com/sp/article_manager/detail/polish_woman_in_donegal_brag_about_life_on_the_dole

http://www.irishtimes.com/newspaper/weekend/2012/0204/1224311239053.html

Two years ago, she went on the dole. “I had been unemployed on and off. Then I came back to Dunfanaghy after the season was over, and it’s very hard to find a job then. I went to social welfare to ask what options I have. I had a conversation with a Fás officer to see what’s possible for me. And then I decided if it is possible to do a course or two and then start my own business straight away, that would be fantastic.”

She signed on as part of a plan to set herself up as a professional, self-employed masseur.

So then,Yes all of this is possible...first stop ?...your local Donegal Fás office.....:D

Farmer Pudsey

AlekSmart wrote: »

3 Cheers and a big Búladh Bos for McCauley Auctioneers for being the first Auctioneer I can recall to be TRUTHFUL in their advertising.

"In POOR Condition"

They could just as easily have gone down the "Luxurious starter-home,in need of a little TLC" blather......

Well done,perhaps there IS hope for reality becoming an Irish trait after all !! :eek:

Is it the house or the housing estate that is in bad condition. It looks like a jungle. Maybe the Viet Cong use it as a training base, OH I forgot we have our own home grown type it is more than likly a Shinners training base.

Jimmyhologram

donegal_road wrote: »

yes but you could buy it as your country retreat, take a year out and write that book you've been planning but haven't had the peace to do, walk the local beach in the evening, go home and write in front of the fire with no one to bother you

What about if a group of writers or artists joined together and bought up a ghost estate, turned it into an artists village or something? Has anyone tried anything like this? Or even just a group of friends or acquaintances who wouldn't mind sharing an estate ... Because one of the biggest problems with ghost estates for me would be the isolation and not knowing who the hell you might end up living beside in ten years.

AlekSmart

Jimmyhologram wrote: »

What about if a group of writers or artists joined together and bought up a ghost estate, turned it into an artists village or something? Has anyone tried anything like this? Or even just a group of friends or acquaintances who wouldn't mind sharing an estate ... Because one of the biggest problems with ghost estates for me would be the isolation and not knowing who the hell you might end up living beside in ten years.

AH musha,but such initiatives are not a new thing up round Donegal....

http://www.gleanncholmcille.ie/frmcdyer.htm

http://www.glenfolkvillage.com/home.htm

Cometh the hour,cometh the man ?

Sleepy

If you had a 2k deposit, the mortgage on that property would be all of the grand total of €20 a month. You could literally buy it while on the dole. Obviously you'd need another couple of grand to furnish it etc but if you weren't fussy you could do that pretty cheap via Adverts / the SVP.

Were the other houses in the development in similar condition, there's a great opportunity there for a group to buy the houses at that price level, take over the estate via a management company and clean up the estate themselves.

Dannyboy83

Dannyboy83 wrote: »

I was offered a 300k mortgage in 2008 (which I refused)
I applied for a 180k mortgage in 2010 (they refused me - informally)
Max I can get now is about 160k, that's the absolute max I would want anyway.

I was under the impression that I couldn't get a mortgage myself.
Based on my last meeting, it seems I can.

You need to satisfy certain criteria which the banks are not exactly forthcoming with:
A) Net to have a net disposable income of €1200
Need to save €1000 per month to prove you can handle stress tests etc.
C) Need to save up your 8% yourself (cannot be gifted/helicoptered to you)

Thread update

Erm.....add a refusal of 130k to the above list Ladies and Gents.

In the last 12 months, saved 15k
Asking to borrow 130k max
Earning 37k gross

Been refused on my mortgage application because "I use my overdraft too much". :rolleyes: (bear in mind - I pay AIB for the use of the overdraft facility)

We are customers with options - not cash cows; This is my last time being refused by them.

13 months ago, I met with AIB mortgage guidance people & ensured I met all their stipulated criteria: (Saved E1000 per month minimum, have 12% not 8%, etc. etc.)
With previous refusals, I could at least accept they may have had legitimate reasons.

Not sure where I will move money to - Rabo, Credit Union, whatever... I can only surmise that as a financial institution, AIB are now completely purposeless.

antoobrien

Dannyboy83 wrote: »

Been refused on my mortgage application because "I use my overdraft too much". :rolleyes:

Regular use of the overdraft implies not living within means, thus calling into question the future ability to make repayments.

Valid reason i.m.o.

Dannyboy83

antoobrien wrote: »

Regular use of the overdraft implies not living within means, thus calling into question the future ability to make repayments.

Valid reason i.m.o.

I see very little grounds for that assumption tbh.

Regular use of your overdraft implies an understanding of cash flow.
I haven't been out of my overdraft in about 6 years - why would I? I pay for the service. I've never been late on a payment for anything, perfect credit history.

How does it call into question future ability to make repayments?
Overdraft max is 1k
5 years fixed @ 130k = €685
Savings of 1000E per month minimum

antoobrien

Dannyboy83 wrote: »

In the last 12 months, saved 15k

Dannyboy83 wrote: »

I haven't been out of my overdraft in about 6 years - why would I?
.
.
Savings of 1000E per month minimum

The bank will look at that and decide that your overdraft is funding your savings, and they'd have a point.

Dannyboy83

antoobrien wrote: »

The bank will look at that and decide that your overdraft is funding your savings, and they'd have a point.

I don't understand the point....

I've saved 15k in the last year.
The overdraft maxes out at 1k.

How does 1k fund 15k?
Maybe we have crossed wires?

ChRoMe

Dannyboy83 wrote: »

I don't understand the point....

I've saved 15k in the last year.
The overdraft maxes out at 1k.

How does 1k fund 15k?
Maybe we have crossed wires?

I think its an interest question though, could you survive without the overdraft? Most of them have a clause saying that bank can call in the full amount at any time, would you be able to survive such a move?

Dannyboy83

ChRoMe wrote: »

I think its an interest question though, could you survive without the overdraft?

Fair Q.
Answer is Yes, without any doubt or uncertainty.

The primary reason I use the overdraft is because I pay for the facility and it's a useful facility to have.
Does one need a 2k limit on their credit card? No, but it's useful to have, isn't it?

(In any case, I'm going to repay the overdraft in full in January and when I change bank, I'm not going to take an overdraft facility with (insert new bank).

But a question I feel is also relevant here - why would an individual cease to use an overdraft or a credit card simply if they have a mortgage?
I find this completely irrational/unrealistic.

Allow me to reiterate that I met 13 months ago with the bank's advisors, was made aware of all their criteria and have ensured I have satisfied those criteria, as outlined above.
I manage all my finances and assets through a money management application.
An overdraft is simply another tool, provided by the bank, which one uses to manage cash flow - and pays for the service.


I'm not sure if I'm articulating my point sufficiently here - as an analogy, it feels to me like a car insurance company refusing to honour a policy because a person has availed of a paid extra such as Windscreen insurance...

I don't intend for this post to sound rantish - it's more exasperation (mixed with a degree of relief because I'm simply not going to deal with AIB anymore. The game is up.:pac:)

Most of them have a clause saying that bank can call in the full amount at any time, would you be able to survive such a move?

Yes, I keep emergency savings in the credit union for such an unexpected event - altho I would just transfer it to a credit card if it were so immediate.

In any case, if a bank were to do that, I suspect there wouldn't be much of a bank left to pay to!

You do have a point however - Given the extent of the stress testing AIB are doing, I can only assume they are looking to significantly increase their interest rates in the short term future (or maybe drive away all possible business then ask the government for another round of recapitalisation?)

antoobrien

Dannyboy83 wrote: »

I don't understand the point....

I've saved 15k in the last year.
The overdraft maxes out at 1k.

How does 1k fund 15k?
Maybe we have crossed wires?

No, I'm trying to point out to you that the bank will look at:

• Your total outgoings - including savings
• How they are being funded
• What that indicates about your spending patterns

Short version: if you were providing for savings without an overdraft, the bank would probably look more kindly on your application. Even then, the amount you have claimed to have saved in one year could actually count against you (see #3 below).

If you feel like you need a full explanation read on, if not your loss.

Here's a list of red flags that will cause the bank to wonder about your application:

Red flag #1: You are overdrawn and have been for most of the past 6 years. From the wikipedia page explaining overdrafts:

Intentional short-term loan - The account holder finds themselves short of money and knowingly makes an insufficient-funds debit. They accept the associated fees and cover the overdraft with their next deposit.

Knowingly spending more than you have on a regular basis is an indicator of poor money management - regardless of what you are spending it on.

Red flag #2: You've said you're saving 1k per month but still running an overdraft. Savings are supposed to be money left over after all your other costs, instead it's adding to your total costs. The bank will look at this as using a loan product (AIB classify overdrafts as loans) to facilitate the savings. I really shouldn't have to explain this one any further.

Red flag #3 You've claimed to have saved 15k in 1 year (presumably with the bank in question). That's somewhere between 40% - 60% of your net pay (you're on the same gross as I am, so I'm giving a range to allow for difference in pension contributions, deductions at source etc). The banks are going to wonder just where that amount of savings are coming from and what you're not telling them.

ChRoMe

Dannyboy83 wrote: »

Fair Q.
Answer is Yes, without any doubt or uncertainty.

The primary reason I use the overdraft is because I pay for the facility and it's a useful facility to have.
Does one need a 2k limit on their credit card? No, but it's useful to have, isn't it?

(In any case, I'm going to repay the overdraft in full in January and when I change bank, I'm not going to take an overdraft facility with (insert new bank).

But a question I feel is also relevant here - why would an individual cease to use an overdraft or a credit card simply if they have a mortgage?
I find this completely irrational/unrealistic.

Allow me to reiterate that I met 13 months ago with the bank's advisors, was made aware of all their criteria and have ensured I have satisfied those criteria, as outlined above.
I manage all my finances and assets through a money management application.
An overdraft is simply another tool, provided by the bank, which one uses to manage cash flow - and pays for the service.


I'm not sure if I'm articulating my point sufficiently here - as an analogy, it feels to me like a car insurance company refusing to honour a policy because a person has availed of a paid extra such as Windscreen insurance...

I don't intend for this post to sound rantish - it's more exasperation (mixed with a degree of relief because I'm simply not going to deal with AIB anymore. The game is up.:pac:)




Yes, I keep emergency savings in the credit union for such an unexpected event - altho I would just transfer it to a credit card if it were so immediate.

In any case, if a bank were to do that, I suspect there wouldn't be much of a bank left to pay to!

You do have a point however - Given the extent of the stress testing AIB are doing, I can only assume they are looking to significantly increase their interest rates in the short term future (or maybe drive away all possible business then ask the government for another round of recapitalisation?)

I dont understand the financial reasoning for paying interest on an overdraft if you dont need it? Seems like a waste of money?

Dannyboy83

ChRoMe wrote: »

I dont understand the financial reasoning for paying interest on an overdraft if you dont need it? Seems like a waste of money?

http://www.aib.ie/personal/loans/Personal-Overdrafts
There is a facility fee of EUR25.39 charged per annum or per overdraft sanction, whichever is the more frequent.

I take the opposing view.
For example, individuals who pay substantial motor tax on their car, then leave their car in their garage in an effort to cut down costs.

Where is the logic in paying for a service you cannot use?

ChRoMe

Dannyboy83 wrote: »

http://www.aib.ie/personal/loans/Personal-Overdrafts
There is a facility fee of EUR25.39 charged per annum or per overdraft sanction, whichever is the more frequent.

I take the opposing view.
For example, individuals who pay substantial motor tax on their car, then leave their car in their garage in an effort to cut down costs.

Where is the logic in paying for a service you cannot use?

Eh you also missed the interest paragraph at the top............

"Interest charged
Interest is charged at the Bank’s Standard variable ‘A’ Current Accounts and Personal Bank Accounts Overdraft rate. View our Related Information section to see our Personal Lending Interest Rates."

It still doesn't make any sense you are paying interest on cashflow you already have?!

Your car analogy.... is just broken tbh.

Dannyboy83

antoobrien wrote: »

No, I'm trying to point out to you that the bank will look at:

• Your total outgoings - including savings
• How they are being funded
• What that indicates about your spending patterns

Thank you, but you don't need to point that out.
As I've already explained several times - I met with the bank's advisors several times to ensure I was satisfying all their criteria.

Short version: if you were providing for savings without an overdraft, the bank would probably look more kindly on your application.

I agree with this.
At my next bank, I will not avail of the overdraft facility (explain how this makes the new bank profitable again? Certainly won't help AIB now :pac:)

Even then, the amount you have claimed to have saved in one year could actually count against you (see #3 below).

The mortgage advisors clearly outlined the criteria - I wrote them above for you.

12k minimum per year was the requirement. This is standard
Are you familiar with the current mortgage approval process?

Red flag #1: You are overdrawn and have been for most of the past 6 years. From the wikipedia page explaining overdrafts:

Knowingly spending more than you have on a regular basis is an indicator of poor money management - regardless of what you are spending it on.

I think I see where you're getting confused now.

I agree with that statement - but how does that apply to me?

Do the math here.
Net worth increased by 14k.

An overdraft is for spending more than you have in your current account - not more than you *have*.
How could my net worth have increased if I spent more than I had?

I could just as easily not use an overdraft, instead use a credit card and pay that off in full every month instead.

But my net worth would not be decreasing. Do you understand?

p.s.
You also contradict your previous point - how can the money management be poor if the savings are excessive? Unless cash flow management is explicitly considered poor money management (in which case - why do AIB provide the Masterplan product?)

Red flag #2: You've said you're saving 1k per month but still running an overdraft. Savings are supposed to be money left over after all your other costs, instead it's adding to your total costs. The bank will look at this as using a loan product (AIB classify overdrafts as loans) to facilitate the savings. I really shouldn't have to explain this one any further.

AIB never suggested that use of their overdraft facility was a problem during any of the meetings I had.

Let me explain this a little further to you.
If you start saving €1k per month with an overdraft of €500, and continue to do this for 12 months, you will finish with an overdraft of €500 and a net worth of 11.5k

Red flag #3 You've claimed to have saved 15k in 1 year (presumably with the bank in question). That's somewhere between 40% - 60% of your net pay (you're on the same gross as I am, so I'm giving a range to allow for difference in pension contributions, deductions at source etc). The banks are going to wonder just where that amount of savings are coming from and what you're not telling them.

Oh, come on.
Is that the green eyed monster I see here?:rolleyes:

With regard to "Flag#3", my savings come from my sole income.
There is an audit trail from my AIB current account to my AIB deposit account, showing my savings transferred on the 1st day of every month.

It was purposely structured in this manner in November 2011, at the behest of AIB advisors, to eliminate any possibility of what you are suggesting above.



With regard to Flag#1, my father has been overdrawn since the 70s and has acquired several properties outright during this time.:pac:
The fact is that AIB have become utterly risk averse.

Dannyboy83

ChRoMe wrote: »

It still doesn't make any sense you are paying interest on cashflow you already have?!

Your car analogy.... is just broken tbh.

Well, I'm sorry to hear that.
I guess we'll just have to leave it there then.
Thanks for your input.

ChRoMe

Dannyboy83 wrote: »

Well, I'm sorry to hear that.
I guess we'll just have to leave it there then.
Thanks for your input.

Cool, you do realise you are not just paying 25 quid for the overdraft right?