Would I get a mortgage?

simo28

Hi,
Question for someone in the know. I have €35000 saved and I'm thinking now is the time to buy a house. I know there is a possibility that prices will decrease further but my rental lease is coming to an end in May and I've been looking around and there a plenty of nice homes in the area I would like to live in up for sale. Now I'm in a relationship but would prefer to buy alone as I don't feel we're at that point but I would be looking to rent a room or two to some of my mates. I know one pal will defo rent a room. The properties I have been looking at are all listed with guide prices of no more then €270000 but I imagine with the way things are now you would get them cheaper. I am in full time employment.
My question is though with the the banks are now would I get a mortgage? I appreciate an comment you might make. Thanks,

killers1

simo28 wrote: »

Hi,
Question for someone in the know. I have €35000 saved and I'm thinking now is the time to buy a house. I know there is a possibility that prices will decrease further but my rental lease is coming to an end in May and I've been looking around and there a plenty of nice homes in the area I would like to live in up for sale. Now I'm in a relationship but would prefer to buy alone as I don't feel we're at that point but I would be looking to rent a room or two to some of my mates. I know one pal will defo rent a room. The properties I have been looking at are all listed with guide prices of no more then €270000 but I imagine with the way things are now you would get them cheaper. I am in full time employment.
My question is though with the the banks are now would I get a mortgage? I appreciate an comment you might make. Thanks,

It's absolutely impossible to answer your question without knowing any of the following;

Your age?
Do you have any dependents?
Occupation?
Salary?
Length of time with current employer?
Monthly savings contribution? How much Pm & since when? Were €35k savings built up from salary or do they include gift/inheritances etc?
Current living arrangement i.e. renting? if so how much per month? Since when? Paid via bank account? If at home are you paying rent? If so how much? & again is is evidenced in bank account?
Any current/previous borrowings? Do you have a credit card? If so how much is o/s?

It is impossible for anyone to give you an accurate answer without the above info I'm afraid. Also worth noting that whilst you intend letting 1 or more rooms in the property the banks will no longer factor this as income when calculating how much you can borrow. The amount you will get as a mortgage will be dependent on what your salary allows you to borrow based on your age etc and whether or not you have a proven repayment ability for the mortgage amount required stressed at 2%...

If you want to give answers to the above I'll happily let you know how you are fixed....

simo28

Hi, thanks for the reply. Here is more details

I'm 32, 33 in May
No dependants.
I work in finance, salary of €34000
I've had my job for 4 years
I saved €20000 over 8 years and the other €15000 was from an inheritance
I rent, paying €525 pm
I haven't had a bank loan in ten years, never had a credit card and sometimes take small loans from the credit union but never more than €1500, usually for holidays etc.

Thanks again

MBC1

I think you will just have to bite the bullet go to your bank and start filling the mortgage application documents which are a bit of a pain but the banks need to know it all! I think the main thing that the banks are looking for these days is permanent job and proof of regular savings.

I applied last year with my oh we were refused!! Mainly because we bought an apartment back in the good times which we now let out because its too small as we have a baby now and the apartment is just too small for us. But the bank wouldn't count the rent we receive for the apartment as income. We are also paying rent where we are now which would equal any mortgage repayments so we could afford it. They have just got very strict in this regard.

So it will be a while before we will be in a position to trade up unless the banks sort this one out I'm sure that there are many others in the same boat!!

killers1

simo28 wrote: »

Hi, thanks for the reply. Here is more details

I'm 32, 33 in May
No dependants.
I work in finance, salary of €34000
I've had my job for 4 years
I saved €20000 over 8 years and the other €15000 was from an inheritance
I rent, paying €525 pm
I haven't had a bank loan in ten years, never had a credit card and sometimes take small loans from the credit union but never more than €1500, usually for holidays etc.

Thanks again

Assuming you have been renting for more than 6/8 months and pay an average of more than €450pm to your savings account over the last year you will qualify for a loan amount of €170k-€180k based on your salary & age. Added to your savings you are looking at being able to buy for a purchase price of circa €210k when you factor in stamp duty, legal fees, etc....

killers1

MBC1 wrote: »

I think you will just have to bite the bullet go to your bank and start filling the mortgage application documents which are a bit of a pain but the banks need to know it all! I think the main thing that the banks are looking for these days is permanent job and proof of regular savings.

I applied last year with my oh we were refused!! Mainly because we bought an apartment back in the good times which we now let out because its too small as we have a baby now and the apartment is just too small for us. But the bank wouldn't count the rent we receive for the apartment as income. We are also paying rent where we are now which would equal any mortgage repayments so we could afford it. They have just got very strict in this regard.

So it will be a while before we will be in a position to trade up unless the banks sort this one out I'm sure that there are many others in the same boat!!

The only way you can get approval to retain your existing property and purchase a new one is to show that you can afford the stressed repayments on both mortgages combined without being reliant on the rental income. You need to do this over a period of approx 1 year of paying rent & also contributing to your savings at the same time. You also need to show that you have sufficient monthly disposable income over an above your mortgage commitments to cover the estimated living expenses of a family with dependents.

simo28

simo28 wrote: »

...............
I work in finance, salary of €34000
..............
I saved €20000 over 8 years and the other €15000 was from an inheritance
I rent, paying €525 pm.................

killers1 wrote: »

..............you will qualify for a loan amount of €170k-€180k based on your salary & age. Added to your savings you are looking at being able to buy for a purchase price of circa €210k when you factor in stamp duty, legal fees, etc....

You've been saving €2500/annum while paying €525 rent per month, I'd be amazed if any back reckoned loaning you over 5 times your gross salary was a good idea to be honest.

killers1

RoverJames wrote: »

You've been saving €2500/annum while paying €525 rent per month, I'd be amazed if any back reckoned loaning you over 5 times your gross salary was a good idea to be honest.

You've mis-read my quote and assumed he has saved an equal amount PM over the last 8 years. If you re-read my post you will see that I said :

'assuming you have been renting for 6/8 months and pay an average of €450pm to your savings account over the last year'

If this is the case the OP has shown that he can afford outgoings on €975pm for the past year. The stressed mortgage repayments on €180k amount to €908pm. Does this not show an ability to service a loan of €180k?? You might not think so but a lender will as this is the basis of a bank's credit policy.

I do agree that if the case turns out to be that you are only saving circa €208pm to savings (which would be the €20k divided by 96 mths (8 Yrs), you have only shown a repayment ability for €733pm which equates to a mortgage amount of approx €140k. Do not get hung up on multiples as the bank calculators don't assess this way. The process is twofold, your income allows you to borrow a certain amount based on your age & whether you have dependents and/or existing borrowings & the second part is prove you can afford the repayments...

killers1

killers1 wrote: »

You've mis-read my quote and assumed he has saved an equal amount PM over the last 8 years. If you re-read my post you will see that I said :...............

I didn't mis read it actually, your assumption of the OP saving an average of €450pm for the last 12 months is just that so I decided to go with what the OP posted rather than assumptions from 3rd parties

If banks are lending €180k to folks on €34k I don't think the housing market would be quite as dead as it is.

Net income per month (with no pension or BIK) is €2,288.00, I really hope no lenders see paying out €900/month on a mortgage as reasonable, interest rates won't be getting any lower I imagine.

killers1

RoverJames wrote: »

I didn't mis read it actually, your assumption of the OP saving an average of €450pm for the last 12 months is just that so I decided to go with what the OP posted rather than assumptions from 3rd parties

If banks are lending €180k to folks on €34k I don't think the housing market would be quite as dead as it is.

Net income per month (with no pension or BIK) is €2,288.00, I really hope no lenders see paying out €900/month on a mortgage as reasonable, interest rates won't be getting any lower I imagine.

I made an assumption because the OP didn't answer the question accurately..

Net income on €34k is €2,454pm (as per Bank's Calc). Actual mortgage repayment is €716 reduced to €593 net of TRS. Sound more reasonable to you??

simo28

Thanks to all who have replied. I'm not filled with confidence after reading them so I guess the only option is to head to the bank and see where I am. Thanks again, my brain is working overtime

killers1

simo28 wrote: »

Thanks to all who have replied. I'm not filled with confidence after reading them so I guess the only option is to head to the bank and see where I am. Thanks again, my brain is working overtime

Best of luck! Just remember there is more than one bank out there...

wetdufflecoats

Youve got a great chance seeing as you've shown a track record in savings. Make sure you have bank statements to show this as this took me a bit of time and effort to sort out with BOI.