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Mortgage Approval Criteria

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  • 26-04-2014 4:25pm
    #1
    NewApproach
    Registered Users Posts: 2,188 ✭✭✭


    Hi,

    My salary would be slightly lower than the banks may be looking for to approve mortgages, but I am in a position where I could put up significantly more than the normally required deposit up front. Would this help in getting a mortgage or would a low salary be a hindrance irrespective of lump sums of cash available?

    Thanks


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    #2
    phormium
    Registered Users Posts: 3,340 ✭✭✭phormium


    It won't change the bank's underwriting requirements, if the salary you have is deemed insufficient by them for the mortgage you want then it won't really matter how much deposit you have.


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    #3
    marathonic
    Registered Users Posts: 1,668 ✭✭✭marathonic


    The high deposit should decrease the amount of mortgage needed. However, it's repayment capacity, not security, that the bank are more interested in. The banks aren't thinking along the lines of "it doesn't matter if they're earning less that what we'd like because they've got 50% equity and we can repossess if they cannot pay".
    1. You need to determine how much of a mortgage you need
    2. Then you need to work out the repayments on that mortgage at interest rates of 6% (I'd use a 30-year term)
    3. Then you need to deduct this mortgage repayment amount, together with a deduction of €250 per child, if any, from your monthly take-home pay

    After performing the above, if you are left with less than €1,250 for a single person, or €2,000 for a couple, you don't stand much of a chance.

    If you are borderline, it may be worth trying to get an approval in principal. However, if the remaining income is €200+ below the above figures, you'd be wasting your time.


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    #4
    Galwayguy35
    Registered Users Posts: 16,564 ✭✭✭✭Galwayguy35


    NewApproach wrote: »
    Hi,

    My salary would be slightly lower than the banks may be looking for to approve mortgages, but I am in a position where I could put up significantly more than the normally required deposit up front. Would this help in getting a mortgage or would a low salary be a hindrance irrespective of lump sums of cash available?

    Thanks

    I'm on a low salary, but had a good bit of savings at the time and although I didn't get the amount I was looking for they approved the mortgage when I told them I could cover the difference.


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    #5
    the groutch
    Closed Accounts Posts: 16,096 ✭✭✭✭the groutch


    NewApproach wrote: »
    Hi,

    My salary would be slightly lower than the banks may be looking for to approve mortgages, but I am in a position where I could put up significantly more than the normally required deposit up front. Would this help in getting a mortgage or would a low salary be a hindrance irrespective of lump sums of cash available?

    Thanks

    depends on where the lump sum came from.
    if it is from long-term savings, it shows your ability to manage finances properly and will stand very much in your favour.
    if it's a gift/inheritance, it's significance in the application process would be significantly diminished.


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