Approved for a 20k loan / turned down for a mortage

wicklow_hunter

Hi All

Somebody maybe able to help me out here.

Heres my story: went looking for a mortage to buy a house - yes some might say its a mad idea. At the time i was only looking for 20K Over 5 years. After a detailed discussion over the phone they turned me down on the basis of not being employed on a permenant basis:rolleyes: Its not a lot of money i know and i even had saved up 100K so far. Bn a coustomer for 10 years. Work in the pharma sector and on a relatively good wage aswell 47k Approx.

Some while later i rang the local branch up and asked for a personel un secured loan of 10K to test the water. They enquired what it was for and the response i gave them was home improovements - They dug a little deeper and i told them the truth half was for the house and the other half for furnishings - which is actually the truth. I pushed them a little more over the phone and asked whats the max i could borrow. the response was 20K shouldnt be a problem:rolleyes:

Low and behold filled out the forms and yesterday i was approved for the 20K at a rate of 12%.

So what should i do - It equates to 2400 in interest per anum which is crazy...

Should i question it and see could i get a better rate on a mortage?

I recon i could pay it bk in 2 years - it still works out at nearly 5 k for the privilage...

Any comments or sugestions how to handle this would be welcome?


Thanks in advance

the_syco

wicklow_hunter wrote: »

Heres my story: went looking for a mortage to buy a house - yes some might say its a mad idea. At the time i was only looking for 20K Over 5 years.

Does anyone know if there's a min amount for a mortgage?

D3PO

the_syco wrote: »

Does anyone know if there's a min amount for a mortgage?

Most of the banks used to have a min of 50k not sure what it is now.

There are additional costs associated with Mortgages for banks which is probably one of the reasons the OP was denied. Sounds illogical to get approved for a loan but not a mortgage of the same amount but if you were to look at the smaller margin and breakdown of additional costs for the bank then it does make sense.

the groutch

think there might be a minimum term for mortgages, it's not profitable enough for them to give 3-4% over 5 years.

Kosseegan

wicklow_hunter wrote: »

Hi All

Somebody maybe able to help me out here.

Heres my story: went looking for a mortage to buy a house - yes some might say its a mad idea. At the time i was only looking for 20K Over 5 years. After a detailed discussion over the phone they turned me down on the basis of not being employed on a permenant basis:rolleyes: Its not a lot of money i know and i even had saved up 100K so far. Bn a coustomer for 10 years. Work in the pharma sector and on a relatively good wage aswell 47k Approx.

Some while later i rang the local branch up and asked for a personel un secured loan of 10K to test the water. They enquired what it was for and the response i gave them was home improovements - They dug a little deeper and i told them the truth half was for the house and the other half for furnishings - which is actually the truth. I pushed them a little more over the phone and asked whats the max i could borrow. the response was 20K shouldnt be a problem:rolleyes:

Low and behold filled out the forms and yesterday i was approved for the 20K at a rate of 12%.

So what should i do - It equates to 2400 in interest per anum which is crazy...

Should i question it and see could i get a better rate on a mortage?

I recon i could pay it bk in 2 years - it still works out at nearly 5 k for the privilage...

Any comments or sugestions how to handle this would be welcome?


Thanks in advance

If you get a mortgage you would have to pay solicitors charges and registration charges and for deeds of release. You could well end up paying about €2.5k for all of that. It is not worth the bother from your point of view or the banks getting involved in a mortgage with those sort of costs. You will be paying interest on a declining balance so the total interest will be a lot less that €4,800. It would be less than 3K I would think..

Have you tried a credit union, they would give you a far better rate than 12%.

Lyn256

If you've managed to save almost e100k, could you not just save hard for another year or two and save the e20k. If house prices fall slowly over the next two years you might find that you only need e10k instead??
Would a family member be able to help you out in the short term??
Or buy a house for e90k, and have e10k for costs and kit out/decorating??

StillWaters

The minimum banks will give is €50k, so you would need to borrow that, making the rest up from savings, or take a personal loan, shopping round for the best interest rates.

pwurple

Ask for the terms and conditions of their standard mortgages.

What I would try to do, is get the 50K mortgage.. and put the lump sum of 30K back in sharpish after you borrowed it. Need to read the terms carefully on that though, as sometimes they penalise you for fast payoff.

fasttalkerchat

Get a credit union account for yourself and your partner and parents if possible. Borrow a few hundred and pay back on time. Then borrow 20k between the accounts. Interest will be half of what the bank want.

wexford12

StillWaters wrote: »

The minimum banks will give is €50k, so you would need to borrow that, making the rest up from savings, or take a personal loan, shopping round for the best interest rates.

I borrowed €40k but each bank may differ I thought the min was €25k

wicklow_hunter

To make things clear about my circumstances im 28 and need to moove out sooner rather that later for my own sanity. Anyway i made an offer after on the property and was turned down (120k for 3 bed semi d) Yes there are cheaper ones for alot less but just not in the right location for me. Dont think any semi d is worth much more even a good one in a good location outside a large town