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Should I worry about our mortgage approval?

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  • 17-05-2012 12:06pm
    #1
    sarkozy
    Registered Users Posts: 1,476 ✭✭✭


    We've found a house we want to live in for years to come. We've gone sale agreed, engaged a solicitor and lined up a structural surveyor.

    We have substantial savings and plan to have a very healthy loan-to-value ratio of between 50-60% meaning our monthly repayments could be around €600-800, leaving lots of legroom for our household budget with our combined income.

    Until now, Bank of Ireland have been very positive about our application. Now we're getting signals that my contract situation (fixed-term maternity) may cause problems, though at my appraisal, I've been assured that I will have work with this company well into 2013. Additional things are I have a masters' and significant, valuable experience in the sector in which I work.

    Now our solicitor has said that mortgage applications are now long, drawn-our affairs and has suggested that we employ a mortgage broker to strengthen our case on our behalf.

    We expect to hear something from the bank tomorrow.

    I'm worried that it'll be bad news. Should I be?


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    #2
    Mr. Presentable
    Closed Accounts Posts: 9,496 ✭✭✭Mr. Presentable


    Are you saying you only have a job for another 12 months? If so, even were it approved, should you be taking out a large loan with a long term?


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    #3
    sarkozy
    Registered Users Posts: 1,476 ✭✭✭sarkozy


    It's a conservative application. For a married couple, with the space that starting a family requires, the mortgage would come in well under the rental price for modest houses in Dublin. It's not crazy to expect that a dual-income earning household can pay a mortgage that's less than the rent one would have to pay anyway for a lifetime.


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    #4
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    sarkozy wrote: »
    It's a conservative application. For a married couple, with the space that starting a family requires, the mortgage would come in well under the rental price for modest houses in Dublin. It's not crazy to expect that a dual-income earning household can pay a mortgage that's less than the rent one would have to pay anyway for a lifetime.

    What assurance does the bank have that the mother would return to work after maternity?


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    #5
    sarkozy
    Registered Users Posts: 1,476 ✭✭✭sarkozy


    Zamboni wrote: »
    What assurance does the bank have that the mother would return to work after maternity?
    As much assurance we we have. That she may or may not. My boss recently told me that if she doesn't come back, I can have her job. And he can write various things to that effect.


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    #6
    dearg lady
    Closed Accounts Posts: 2,091 ✭✭✭dearg lady


    Could you make the application with just one income, the other person I presume is in permanant employment?


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    #7
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    sarkozy wrote: »
    As much assurance we we have. That she may or may not. My boss recently told me that if she doesn't come back, I can have her job. And he can write various things to that effect.

    Sorry, I meant you and your partner looking to start a family.
    You may not be a dual income household for long.


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    #8
    sarkozy
    Registered Users Posts: 1,476 ✭✭✭sarkozy


    Zamboni wrote: »
    Sorry, I meant you and your partner looking to start a family.
    You may not be a dual income household for long.
    Sure, that would be manageable. Yes, other person has a permanent contract.


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    #9
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    sarkozy wrote: »
    Sure, that would be manageable. Yes, other person has a permanent contract.

    Is the other persons income sufficient to qualify you to borrow the amount you need based on their salary alone? If so, you'll be fine. If not, you'll need to give the bank some comfort around your job security & future job prospects.


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    #10
    Duckjob
    Registered Users Posts: 2,859 ✭✭✭Duckjob


    Seems to be a bit of confusion over OPs circumstances -

    OP maybe you could clarify - are you on maternity yourself or filling in for someone off who is on maternity ?


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    #11
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Duckjob wrote: »
    Seems to be a bit of confusion over OPs circumstances -

    OP maybe you could clarify - are you on maternity yourself or filling in for someone off who is on maternity ?

    I understood it to be she's working covering someone else who is on maternity leave??


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    #12
    sarkozy
    Registered Users Posts: 1,476 ✭✭✭sarkozy


    My wife has a permanent contract and also works as a sole trafer. I work full time - my contract is, at present, a 9-month maternity leave contract. The person whose shoes I'm filling is on maternity leave. Beyond this contract period, I am assured of work into 2013. Where this person not to come back into her position, I have been told that I would be kept on. This would mean a standard 2-year contract.


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    #13
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    sarkozy wrote: »
    My wife has a permanent contract and also works as a sole trafer. I work full time - my contract is, at present, a 9-month maternity leave contract. The person whose shoes I'm filling is on maternity leave. Beyond this contract period, I am assured of work into 2013. Where this person not to come back into her position, I have been told that I would be kept on. This would mean a standard 2-year contract.

    And you're looking to start a family yourselves too?


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    #14
    Duckjob
    Registered Users Posts: 2,859 ✭✭✭Duckjob


    sarkozy wrote: »
    My wife has a permanent contract and also works as a sole trafer. I work full time - my contract is, at present, a 9-month maternity leave contract. The person whose shoes I'm filling is on maternity leave. Beyond this contract period, I am assured of work into 2013. Where this person not to come back into her position, I have been told that I would be kept on. This would mean a standard 2-year contract.


    If you're filling in for somebody who is on maternity, I would say by default that would be seen as a transient employment (since the assumption would be she will be coming back). That puts a big question mark over the permanence of your current income.

    If your wife's income would qualify you then it shouldn't be a problem, but I'd say the bank will look for additional assurances re. the longevity of your wife's contract. I'm sure Killers can give you some deeper insights.


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    #15
    Texxx
    Registered Users Posts: 3 ✭Texxx


    What sector are you working in?

    And what area is the property in? Would you be able to rent out a spare room?

    It sounds like it could be your lack of a contract beyond 2013. I am in the same boat myself despite letter of comfort from my employer etc.

    Which of you is the primary mortgage applicant?


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    #16
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    Banks look at if interest rates go up by 2 or 3 percent ,can you afford to pay the loan.
    You are saying you have letters , re your income for the next 2 years,
    i think you,ll need a broker to get a mortgage to argue your case.
    SO you are saying you are gauranteed work for 2 years.Banks usually go for people who are self employed ,or in permanent employment.IN the case of
    business owners,they ask for 3 years accounts.
    on george hook newstalk, today ,eddy hobbs says a bloke on 50k ,permanent job ,cant borrow 200k mortgage,
    the banks have very strict criteria,its hard to get a mortgage.
    they look at all your finances,expenses etc not just your income.structural survey costs 500 plus, i would not pay for it,
    UNTIL you get positive yes from bank on your application.
    if bank says no, survey is a total waste of money.
    how much are you asking for, how much is the house price.


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