Would I get mortgage approval?

jayo76

I know this question has been asked loads before but I am just seeking some info before I go to bank to enquire about mortgage approval.

I am 35, single no kids.
Work as a secondary school teacher, pre tax salary is around 55,000, take home pay every 2 weeks after all deductions comes to 1250. meaning annual take home pay in and around 33,000. Am currently paying 650 a month in rent.

job is permanent

Have savings of 30,000, no loans. Savings are my own and not part of an inheritance/gift. Had more saved, was engaged to my ex and we planned to buy last year, broke up and in the last year have splurged some of my savings on treating myself to holidays, places id always wanted to visit, big tour of America nad Canada last year. maybe not such a good idea now but was needed!

Recently have started to consider buying on my own but very unsure how i will be viewed by mortgage lenders, any info on where i stand would be greatly appreciated.

indiewindy

You'll have no trouble getting a mortgage,
no loans
big deposit
permanent job
regular savings
ideal candidate to get a mortgage

jayo76

Thank you for reply,

My worry i suppose is, is 30,000 a big deposit these days? Houses i am looking at are over 200k and while they might sell for less would mortgage lenders be insisting i have a deposit of 40,000 or more?

Still will probably wait a few months to see how house prices develop further and honestly believe most of houses i am looking at are overvalued still.

Any ideas what level of mortgage i would get?

Dr. Dodger

I've very recently gotten approval on my own for €240k on my own with same deposit + I earn less than you so you should be ok.

killers1

jayo76 wrote: »

Thank you for reply,

My worry i suppose is, is 30,000 a big deposit these days? Houses i am looking at are over 200k and while they might sell for less would mortgage lenders be insisting i have a deposit of 40,000 or more?

Still will probably wait a few months to see how house prices develop further and honestly believe most of houses i am looking at are overvalued still.

Any ideas what level of mortgage i would get?

You will need 8% or 10% of the purchase price as a deposit depending on the lender. Any bank looking for more than this is not open for business and their rates will be more expensive too. Your salary, age & the fact you have no dependents qualifies you to borrow in excess of €250k. You will need to prove you can afford the stressed repayments on the proposed mortgage. E.g. stressed repayments on €250k amount to circa €1,380pm and this is the figure you need to show you can afford. You rent of €650 goes towards this and also whatever monthly savings contribution you are making. If you are not a regular saver and the savings balance has been reducing consistently over the past while this will go against you. Even though you withdrew money for holidays etc (totally understandable in the circumstances) we're you still lodging to the savings account on a fortnightly/monthly basis? It's one thing to qualify for the amount required based on your salary it's more important that you can prove you can meet the repayments...

jayo76

killers1 wrote: »

You will need 8% or 10% of the purchase price as a deposit depending on the lender. Any bank looking for more than this is not open for business and their rates will be more expensive too. Your salary, age & the fact you have no dependents qualifies you to borrow in excess of €250k. You will need to prove you can afford the stressed repayments on the proposed mortgage. E.g. stressed repayments on €250k amount to circa €1,380pm and this is the figure you need to show you can afford. You rent of €650 goes towards this and also whatever monthly savings contribution you are making. If you are not a regular saver and the savings balance has been reducing consistently over the past while this will go against you. Even though you withdrew money for holidays etc (totally understandable in the circumstances) we're you still lodging to the savings account on a fortnightly/monthly basis? It's one thing to qualify for the amount required based on your salary it's more important that you can prove you can meet the repayments...

My total amount of savings available has decreased by about e4,000 i suppose over the last 18 months, will this be viewed very negatively?

I know very foolish of me but up until I became single 18 months ago i never had a designated savings account, just let money accrue in my current account and i currently have 31,000e in this account, over the last year i did set up a designated credit union account for savings and have been transferring money from current at rate of 150e a week for the last 8 months , this account now has just over 5,000e, so in total have access to 36,000e. Figure of 31,000 in my current account has stayed steady other than holidays taken

How will these figures be viewed? for the last 8 months i have comfortably been meeting a total of 1250e between rent and savings to C.U. Probably plan on been a few months before i go to bank anyway, maybe even next year, if i continue this level of saving will that be sufficient in your opinion?

Zamboni

Just off the main topic jayo76, get that money out of your current account and into a deposit account with decent interest - and I don't mean the Credit Union.
That money should have been earning you decent interest over it's accumulation.

killers1

jayo76 wrote: »

My total amount of savings available has decreased by about e4,000 i suppose over the last 18 months, will this be viewed very negatively?

I know very foolish of me but up until I became single 18 months ago i never had a designated savings account, just let money accrue in my current account and i currently have 31,000e in this account, over the last year i did set up a designated credit union account for savings and have been transferring money from current at rate of 150e a week for the last 8 months , this account now has just over 5,000e, so in total have access to 36,000e. Figure of 31,000 in my current account has stayed steady other than holidays taken

How will these figures be viewed? for the last 8 months i have comfortably been meeting a total of 1250e between rent and savings to C.U. Probably plan on been a few months before i go to bank anyway, maybe even next year, if i continue this level of saving will that be sufficient in your opinion?

Hi Jayo,
The savings of €150pw will be a great help in proving affordability and the fact that savings reduced over the past 18 months won't cause an issue if presented correctly. Between your rent & your savings contribution you are showing a repayment capacity for approx €1,300pm (150 X 52/12 + 650) which equates to a loan amount of approx €235k. If you are looking to borrow a higher amount than this I would suggest increasing your savings if at all possible. If this amount is sufficient keep going as you are now.. Any queries let me know!

jayo76

Zamboni wrote: »

Just off the main topic jayo76, get that money out of your current account and into a deposit account with decent interest - and I don't mean the Credit Union.
That money should have been earning you decent interest over it's accumulation.

Thanks Zamboni yeah i know i should have done this long ago, is it possible at the moment to still do if i aim to buy within the next year or will the deposit be locked in for a fixed time of greater than that?

jayo76

killers1 wrote: »

Hi Jayo,
The savings of €150pw will be a great help in proving affordability and the fact that savings reduced over the past 18 months won't cause an issue if presented correctly. Between your rent & your savings contribution you are showing a repayment capacity for approx €1,300pm (150 X 52/12 + 650) which equates to a loan amount of approx €235k. If you are looking to borrow a higher amount than this I would suggest increasing your savings if at all possible. If this amount is sufficient keep going as you are now.. Any queries let me know!

Thank you so much, could probably up savings to close to 200 a week over the next 6 months while waiting to appyl for mortgage. One other question was just trawling through forums here and came across something that worried me. I pay my rent in cash which i withdraw from the bank on a monthly basis, have not been getting receipts, how do i prove rent??

indiewindy

jayo76 wrote: »

Thanks Zamboni yeah i know i should have done this long ago, is it possible at the moment to still do if i aim to buy within the next year or will the deposit be locked in for a fixed time of greater than that?

you can put some money in a 60 day account with ptsb paying the equivalent of 3.5% apr.
Check out www.itsyourmoney.ie for details on best savings rates available

killers1

jayo76 wrote: »

Thank you so much, could probably up savings to close to 200 a week over the next 6 months while waiting to appyl for mortgage. One other question was just trawling through forums here and came across something that worried me. I pay my rent in cash which i withdraw from the bank on a monthly basis, have not been getting receipts, how do i prove rent??

Buy a rent book in Eason's & tell your landlord he's obliged to complete it for you...and needs to backdate to when you moved in. Otherwise the rent you are paying is useless towards proving repayment ability. Do you have a lease that you can use instead to prove you are renting?

jayo76

killers1 wrote: »

Buy a rent book in Eason's & tell your landlord he's obliged to complete it for you...and needs to backdate to when you moved in. Otherwise the rent you are paying is useless towards proving repayment ability. Do you have a lease that you can use instead to prove you are renting?

Apartment i am renting belongs to a work colleague/ friend. When me and ex split up we obviously moved out of place we were renting together, she moved home and it suited me to rent this apartment from friend at a reduced price.

Honestly never thought about implications of no receipts on proof of renting for a mortgage. suited him to rent to me at reduced rate as he had just married and had moved into his wifes existing house.

Never really considered whether he was declaring rental income but guess probabaly not. Am i going to land him in trouble if i now start insisting on backdated rent receipts??

killers1

jayo76 wrote: »

Apartment i am renting belongs to a work colleague/ friend. When me and ex split up we obviously moved out of place we were renting together, she moved home and it suited me to rent this apartment from friend at a reduced price.

Honestly never thought about implications of no receipts on proof of renting for a mortgage. suited him to rent to me at reduced rate as he had just married and had moved into his wifes existing house.

Never really considered whether he was declaring rental income but guess probabaly not. Am i going to land him in trouble if i now start insisting on backdated rent receipts??

No, the rent book is only for you to give to your lender in applying for the loan. It's up to him to be tax compliant. Without evidence of rent paid you'll really struggle to get mortgage approval...

jayo76

killers1 wrote: »

No, the rent book is only for you to give to your lender in applying for the loan. It's up to him to be tax compliant. Without evidence of rent paid you'll really struggle to get mortgage approval...

Thank you again, will talk to him about it and see whether he will do backdated receipts, have been renting there nearly a year and a half, will i need them for the full 18 months?

Really dont want to endanger friendship/ work relationship so am still worried about whether i could be landing gim in trouble if he is not tax compliant, will i need pps number etc from him? Could he be checked out because of my mortgage application?

Feel like such an eejit, have been meeting rental payments and saving no problem but could be undone completely by this and its something i never really genuinely though about until recently, silly i know.

ongarboy

jayo76 wrote: »

Thanks Zamboni yeah i know i should have done this long ago, is it possible at the moment to still do if i aim to buy within the next year or will the deposit be locked in for a fixed time of greater than that?

Rabodirect, NationwideUK Ireland and KBC all offer no notice withdrawal savings account with annual interest rates between 2.1 and 3.25%. Even though they are foreign banks, the savings are secured up to about 100,000 euro. I've had accounts with both Rabo and Nationwide for a few years and have no issue. Rabo in particular has a great online service.

I also think you should have no problem securing a mortgage based onthe info you provided. I secured one under similar conditions a few years ago with BOI.

killers1

jayo76 wrote: »

Thank you again, will talk to him about it and see whether he will do backdated receipts, have been renting there nearly a year and a half, will i need them for the full 18 months?

Really dont want to endanger friendship/ work relationship so am still worried about whether i could be landing gim in trouble if he is not tax compliant, will i need pps number etc from him? Could he be checked out because of my mortgage application?

Feel like such an eejit, have been meeting rental payments and saving no problem but could be undone completely by this and its something i never really genuinely though about until recently, silly i know.

The rent book he supplies you will simply sit on your mortgage application file in the bank. The bank have no interest in your landlords tax compliance so you would not be getting him in trouble by asking him to complete a rent book. At the end of the day I understand he's your friend but your entitled to one and it's solely for the purpose of your mortgage application...

jayo76

killers1 wrote: »

The rent book he supplies you will simply sit on your mortgage application file in the bank. The bank have no interest in your landlords tax compliance so you would not be getting him in trouble by asking him to complete a rent book. At the end of the day I understand he's your friend but your entitled to one and it's solely for the purpose of your mortgage application...

thank you.

Will talk to soon and hopefuly he will supply rent book. if he doesnt i will need to rent somewhere that does and build up a record of rent payments again over the next 12/ 18 months.

GetWithIt

Dr. Dodger wrote: »

I've very recently gotten approval on my own for €240k on my own with same deposit + I earn less than you so you should be ok.

This may not be a great yard stick for the OP. On a slightly higher salary I was quoted 215K over 20 years and 240K over 25 years. And that was with a 20% deposit.

Your term may have been higher. The max term the OP will get is 29 years.

killers1

GetWithIt wrote: »

This may not be a great yard stick for the OP. On a slightly higher salary I was quoted 215K over 20 years and 240K over 25 years. And that was with a 20% deposit.

Your term may have been higher. The max term the OP will get is 29 years.

Depends on the bank, some go to age 65 at expiry, others age 70 at expiry so max available would be 35 yrs. Your right about the previous post not being a great yardstick though as the 'few years ago' part made me laugh! A few years ago bank's were lending in a completely different way to how they do today... and we all know how that turned out!

Dr. Dodger

killers1 wrote: »

Your right about the previous post not being a great yardstick though as the 'few years ago' part made me laugh!

Not sure who said "a few years ago"? For me this was 2 weeks ago and I was offered €240k on my own. Savings of about €30k. Term was 35 years for that one I think.

killers1

Dr. Dodger wrote: »

killers1 wrote: »

Your right about the previous post not being a great yardstick though as the 'few years ago' part made me laugh!

Not sure who said "a few years ago"? For me this was 2 weeks ago and I was offered €240k on my own. Savings of about €30k. Term was 35 years for that one I think.

It was Ongarboy. I was quoting you cos I agreed when you said previous post wasn't a great yardstick....

Dr. Dodger

killers1 wrote: »

It was Ongarboy. I was quoting you cos I agreed when you said previous post wasn't a great yardstick....

That wasn't me either!

killers1

Dr. Dodger wrote: »

killers1 wrote: »

It was Ongarboy. I was quoting you cos I agreed when you said previous post wasn't a great yardstick....

That wasn't me either!

I never quoted you! I was talking about Ongarboy & getwithit's posts.... Damn iPhones!