What are the chances of us getting a loan/mortgage?

fro9etb8j5qsl2

Hi guys Myself and the OH have been working for the last few months to pay off our debts so that we can start saving for a house. We both have debts of around €15000 each and are both lucky enough to be in very stable jobs which pay around €34000 each per year. I reckon it'll take us about 2 years to clear our debts and save enough for a deposit.

However, a perfect house has just come on the market near his parents at €70000. Granted, it needs a fair bit of work but it's liveable and is a total bargain. We are both renting at the moment and the cost of a mortgage for the amount of the house would actually cost a little less than our monthly rent. I know there's absolutely no way any bank would give us a mortgage with our finances being the way they are but now his parents have offered to put their house (worth €120000) as a guarantee for a mortgage for us, or failing all else, as a guarantee for a personal loan for the €70000. My question is, what are the chances that the bank will agree to either of these circumstances? Personally, I'd rather us save ourselves and do it all properly but this is a deal too good to pass up!

killers1

Douglas Melted Sourdough wrote: »

Hi guys Myself and the OH have been working for the last few months to pay off our debts so that we can start saving for a house. We both have debts of around €15000 each and are both lucky enough to be in very stable jobs which pay around €34000 each per year. I reckon it'll take us about 2 years to clear our debts and save enough for a deposit.

However, a perfect house has just come on the market near his parents at €70000. Granted, it needs a fair bit of work but it's liveable and is a total bargain. We are both renting at the moment and the cost of a mortgage for the amount of the house would actually cost a little less than our monthly rent. I know there's absolutely no way any bank would give us a mortgage with our finances being the way they are but now his parents have offered to put their house (worth €120000) as a guarantee for a mortgage for us, or failing all else, as a guarantee for a personal loan for the €70000. My question is, what are the chances that the bank will agree to either of these circumstances? Personally, I'd rather us save ourselves and do it all properly but this is a deal too good to pass up!

Banks make a decision to lend based on the applicants ability to repay the mortgage irrespective of any other additional security being offered e.g a guarantor, or parents house as added security. In relation to a personal loan the same principle applies and you will not get an unsecured personal loan of €70k. I'm presuming you have little or no savings? The only way you would have a chance of buying this property now would be if parents gifted you enough cash to repay existing loans or maybe even 1 of the loans and sufficient monies to cover your deposit etc. You could then apply on the basis that you have proven you can afford the mortgage by way of rent and loan repayments. Banks do like to see applicants having built up some funds themselves but there are cases where they will accept that the full deposit etc is by way of gift. In the event that this isn't an option once you have repaid yor loans and saved your deposit you will be in a strong position to be approved as you have a proven repayment capacity evidenced by your rent & loan repayments.

Blondie2011

Can only tell you my experience... I've recently been approved for a mortgage and application processed, in the process of buying my 1st house.

I cleared my debts so had no loans outstanding. Also am fortunate enough to have 30% of sale price coming as a gift from an inheritence. I am not a regular saver and it was 1 point that the bank made when taking my information.
They explained after mortage and bills (and any other bills), they looked for a minimum of 1200 left in my account for me to be able to realistically live. (They're not taking the risks with approvals that they did during the boom for obvious reasons)
I have a stable perm job and included in my package is company profit share and a yearly bonus which really helped.
Obviously I don't want to go into figures on a public forum, but this was my experience. Its far more straight forward when applying for a mortgage with your existing bank.

My advise is to go make an appointment with your bank manager- surprised me how much I got approval for... bring the details of the house with you- they don't work on pre-approvals the way they used to, its by the house if that makes sense?

Monty Burnz

Douglas Melted Sourdough wrote: »

Hi guys Myself and the OH have been working for the last few months to pay off our debts so that we can start saving for a house. We both have debts of around €15000 each and are both lucky enough to be in very stable jobs which pay around €34000 each per year. I reckon it'll take us about 2 years to clear our debts and save enough for a deposit.

A couple of questions:

1. Is 34k p.a. your after-tax income? If not, what is?
2. How did you run up the debt?

I'd just be a little concerned about how realistic your 2-year estimate to clear debts and save a deposit is.

pawnacide

Go in and talk to your bank or a mortgage broker .. you might be pleasantly surprised or at least get an exact answer as to what you need to do.. Bank is preferable as they will look through your accounts, loans etc without the need to gather a heap of paperwork.

I would imagine that either one of you should get approval for 70k - 10% on your own so you might just have to pay of one loan (if you really really trust each other).

I know of people with car loans in the order of your joint debts who have been approved, really depends on the individuals involved ..too many variables for me or anyone else to give a definitive answer.