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Bidding on a house without official mortgage approval

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    #32
    MammaZita
    Banned (with Prison Access) Posts: 426 ✭✭MammaZita


    leahyl wrote: »
    Well that's what they are calling it!

    From PTSB website:

    "What is Approval in Principle?

    Approval in Principle is based on the initial information you provide when you meet us. While it's not legally binding, it will give you an indication of how much we could lend to you. How much we will lend will be based on a full credit and suitability assessment. Don't worry - you won't have to study!

    It's a good place to start when you're thinking of buying and what's more, you could get Approval In Principle in just 15 minutes. Then you'll know just how much you can afford and whether a rooftop infinity pool and helipad are realistic or not...

    Four things to know about Approval in Principle
    •You could get Approval in Principle by dropping into your local branch or we can call you back and arrange an appointment for you.
    •You don't need to provide anything for Approval in Principle, it's simply a chat about your finances.
    •We'll ask you about how much you earn, what loans you have and what type of mortgage you're looking for (i.e. how much you want to borrow and for how long) - this all helps us to decide how much we could lend you.
    •This amount could then be 'approved in principle' based on the information you've told us

    When you're ready for the full application, you'll need to bring in proof of how much you earn and your loans - find out what documents we may need here. If these all match the information you've provided and the credit check we run comes back ok, your full approval shouldn't differ from the amount we've approved in principle. (Unless you've won the lotto in the meantime, even then we'll probably need proof of your winning ticket!)


    You're missing a very important word- YOU- not your father!!!


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    #33
    cookiecakes
    Registered Users Posts: 331 ✭✭cookiecakes


    leahyl wrote: »
    Regarding the other poster who said I was being misleading - what is the 15 minute chat then that PTSB refer to as being AIP?? Ok I didn't speak with the bank directly myself but my father is aware what savings I have etc. and based on this information that he gave to the guy in there, I got a write out of what I could potentially borrow (as in written in pen now, not a printed letter or anything) - but this is what PTSB say on their website is AIP.

    I know when we went for our AIP meeting, they went through everything. How much we spend on entertainment, food, clothes, what different charges were on our statements, really in-depth. At the end of it, we got a proper printed letter stating how much we were approved for in principle.

    I don't think you're being misleading, I think you might just be a bit confused about what it is they actually do to give you AIP. What they hypothetically told your dad you could borrow could be very different from what they tell you you can borrow when they look at all your finances. I think you really should go and meet with them yourself so you have a firm idea of what you're working with. I know I felt tons better after we'd chatted with them!


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    #34
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    cookiecakes wrote: »
    I know when we went for our AIP meeting, they went through everything. How much we spend on entertainment, food, clothes, what different charges were on our statements, really in-depth. At the end of it, we got a proper printed letter stating how much we were approved for in principle.

    I don't think you're being misleading, I think you might just be a bit confused about what it is they actually do to give you AIP. What they hypothetically told your dad you could borrow could be very different from what they tell you you can borrow when they look at all your finances. I think you really should go and meet with them yourself so you have a firm idea of what you're working with. I know I felt tons better after we'd chatted with them!

    Don't get me wrong - I know I have to go and see them myself but you're right, I am confused as to what AIP actually is I guess.

    Do they give you a letter when you get approval in principle?


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    #35
    Sunny Dayz
    Registered Users Posts: 5,385 ✭✭✭Sunny Dayz


    http://personal.aib.ie/content/dam/aib/personal/docs/our-products/mortgages/step-by-step-guide.pdf

    AIB call it a Sanction in Principle. The link above is a good guide on the mortgage process. By your posts above, you seem to have completed steps one and two.


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    #36
    The_Morrigan
    Registered Users Posts: 9,368 ✭✭✭The_Morrigan


    leahyl I would suggest you go and get your ducks in a row here - the process is frustrating enough without skipping ahead on some steps.
    Step back from the viewing & bidding and get yourself some (ie more than one bank) approvals in principle, then knowing the upper limit of your approval you can then see how you're fixed with regards to bidding on properties.


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    #37
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    Sunny Dayz wrote: »
    http://personal.aib.ie/content/dam/aib/personal/docs/our-products/mortgages/step-by-step-guide.pdf

    AIB call it a Sanction in Principle. The link above is a good guide on the mortgage process. By your posts above, you seem to have completed steps one and two.

    Cheers Sunny Dayz.

    I am sorting out my documentation also at present. I have just put in a request for an appointment with the bank on Monday to, hopefully, get the AIP.


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    #38
    MammaZita
    Banned (with Prison Access) Posts: 426 ✭✭MammaZita


    The_Morrigan wrote: »
    leahyl I would suggest you go and get your ducks in a row here - the process is frustrating enough without skipping ahead on some steps.
    Step back from the viewing & bidding and get yourself some (ie more than one bank) approvals in principle, then knowing the upper limit of your approval you can then see how you're fixed with regards to bidding on properties.

    I agree. There's a big difference between what you think you can afford and what the bank will approve. There are also non-financial factors like your occupation, whether you're permanent etc which they will need to consider too.


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    #39
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    MammaZita wrote: »
    I agree. There's a big difference between what you think you can afford and what the bank will approve. There are also non-financial factors like your occupation, whether you're permanent etc which they will need to consider too.

    I do understand all that, thanks MammaZita, I have been looking for the right property for a few years now and am a bit demented at this stage. I have had approval from another bank before this but decided to try my own bank instead as the other bank kept moving the goalposts as to what I was allowed to borrow (each time I went back to renew the AIP as I never found the right property within the 3 mnths they give you!)

    I am in full time permanent employment for 6 years, significant savings, no loans and will also be getting a gift from my parents towards the deposit. I would be very surprised if they didn't give me some sort of mortgage- but then stranger things have happened.

    Fingers crossed.


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    #40
    TheDriver
    Registered Users Posts: 12,513 ✭✭✭✭TheDriver


    The one thing that strikes me is a gift towards the deposit, you should have your own savings for that. They could gift you some cash for the end price though...


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    #41
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    TheDriver wrote: »
    The one thing that strikes me is a gift towards the deposit, you should have your own savings for that. They could gift you some cash for the end price though...

    I have my own savings plus a gift from my parents - why would this matter?


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    #42
    L1011
    Registered Users Posts: 68,902 ✭✭✭✭L1011


    leahyl wrote: »
    I have my own savings plus a gift from my parents - why would this matter?

    Banks will want to see a substantial amount of savings that are over and above any gift - both ends of the transfer chain if there's multiple accounts involved. If you've got that, a gift as well its not an issue.


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    #43
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    MYOB wrote: »
    Banks will want to see a substantial amount of savings that are over and above any gift - both ends of the transfer chain if there's multiple accounts involved. If you've got that, a gift as well its not an issue.

    Well the gift and the deposit are the same amount - surely that wouldn't be an issue? It's significant savings


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    #44
    cpoh1
    Registered Users Posts: 1,605 ✭✭✭cpoh1


    leahyl wrote: »
    Well the gift and the deposit are the same amount - surely that wouldn't be an issue? It's significant savings

    It really depends on the amount of your savings, and the amount you are borrowing for the house. A lot of banks don't like that a significant portion of your deposit wont be coming from dedicated savings over a period of time.

    I would be cautious if I were you and wait until you have met with the bank. A lot of stuff we took for granted before our mortgage approval was sticky with the banks when sealing the deal.


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    #45
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    cpoh1 wrote: »
    It really depends on the amount of your savings, and the amount you are borrowing for the house. A lot of banks don't like that a significant portion of your deposit wont be coming from dedicated savings over a period of time.

    I would be cautious if I were you and wait until you have met with the bank. A lot of stuff we took for granted before our mortgage approval was sticky with the banks when sealing the deal.

    Ok fair enough, hopefully it won't be an issue though.


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    #46
    OMD
    Registered Users Posts: 2,458 ✭✭✭OMD


    MouseTail wrote: »
    OP you do not have approval in principle, and you should not be bidding. Your father having a chat with the bank, and them saying, yeah, in principle your son could get a mortgage is not Approval in Principle. That is only given when you have supplied documentation, payslips etc, and it has been processed centrally. You then get notification you have approval in principle up to €x and it is valid for y amount of time.

    This is not true. You do not need approval in principle to bid. I have bid and bought numerous times and never sought approval in principle and cannot think of any time when I would seek it. It depends on your own circumstances but I have always considered it a waste of time. Worst case scenario you only find out you cannot afford a property after you bid on it.
    Don't be afraid to lie to auctioneers. (In fact as a rule of thumb do lie to them). They are not afraid to lie/be economical with the truth to you.


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    #47
    Little Miss Cutie
    Registered Users Posts: 1,194 ✭✭✭Little Miss Cutie


    leahyl wrote: »
    Well the gift and the deposit are the same amount - surely that wouldn't be an issue? It's significant savings

    I guess the really issue might be if you have 5% of the purchase price saved and 5% comes from a gift, the bank will not see this as substantial savings.

    However if you have saved for example 20% of the purchase price and the gift is 20% I don't think the bank would have any issue.

    The real issue will be what you have saved. Also how you have saved it, do you have a direct debit each month for savings, did you make withdrawals from your savings account ( this proves you can leave without the money each month) etc.......

    I have a friend who received AIP for approx 280k however full approval was much lower around 175k when all the factors were considered so best to get a realistic figure from the banks.


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    #48
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    Little Miss Cutie wrote: »
    I guess the really issue might be if you have 5% of the purchase price saved and 5% comes from a gift, the bank will not see this as substantial savings.

    However if you have saved for example 20% of the purchase price and the gift is 20% I don't the bank would have any issue.

    The real issue will be what you have saved. Also how you have saved it, do you have a direct debit each month for savings, did you make withdrawals from your savings account ( this proves you can leave without the money each month) etc.......

    I have a friend who received AIP for approx 280k however full approval was much lower around 175k when all the factors were considered so best to get a realistic figure from the banks.

    Oh no, I have quite a good bit more than the 10% deposit that would be required - even with just my own savings - so that's why I don't think there will be an issue.

    Thanks Little Miss Cutie :)


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    #49
    Sunny Dayz
    Registered Users Posts: 5,385 ✭✭✭Sunny Dayz


    Little Miss Cutie wrote: »
    I have a friend who received AIP for approx 280k however full approval was much lower around 175k when all the factors were considered so best to get a realistic figure from the banks.

    This.

    Going by the online calculators the various lenders have on their website, we were in line for a decent mortgage, but the actual max we were approved for was a bit lower.


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    #50
    BookBook
    Registered Users Posts: 99 ✭✭BookBook


    For me houses that meet most of my requirements are few are far between. Don't let one you really like slip away.

    Ask yourself what have you got to lose if you do bid on a house you really want without proper approval? You may lose the house but if you wait until you have proper approval the chance of losing the house is even bigger.


    Between the time I met my mortgage broker and filled out the forms and actually got approval back took a full month which really surprised us and then approval only lasts for 4 months.

    With one house we couldn't submit a bid without getting a mortgage approval letter (and ending up being highest bidder but they sold to cash buyer for less), with another we weren't asked for anything (but got outbid very near the end) and with the most recent one we were only asked for mortgage approval after a bidding war and being told our offer was 'provisionally accepted'.

    What ever you do best of luck.


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    #51
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    Hi all, just an update, went to see this house yesterday and put in an offer this morning - it's perfect location wise, does need a bit of cosmetic work and a new kitchen but is a very solid house.

    I have made an appointment with the bank for Monday afternoon so I can get cracking on the mortgage approval.

    Fingers crossed that my offer is accepted. Thanks for all the advice :)

    Just one more question - when I put in the offer the estate agent said "it's early days yet" - which it is, as the house only went up last week, and I'd say I was one of the first to see it yesterday; but he said he would be in contact with me. I was just wondering, if he doesn't get back to me within a week should I be ringing him? I really don't want to miss out on this property but I don't want to seem too eager either obviously.

    Thanks


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    #52
    BookBook
    Registered Users Posts: 99 ✭✭BookBook


    No bother to ring after a week to ask what is happening. Tell them you have seen another place you are interested in. Do not be surprised if they say they have another bid. This may or may not be true.

    One thing with your bank - have everything you need to speed up the application on Monday:

    - Check their website for a Income Verification Form and get work to fill this out before hand or do up a general one. They may accept one that is not on their headed paper.

    - Have passport or driving license.

    - 6 months of payslips, 6 months of current account statements, 6 months of credit card statements, 6 months of savings history for all your accounts inc credit union etc and a utility bill in your name and address. Some banks only want 3 months of these but best to have six just in case. Also make sure they are up to this weeks date. My bank only do quarterly statements but this wasn't good enough. I had to request and pay for up to date ones.

    -Take copies of all of these before handing over originals.

    Good luck.


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    #53
    leahyl
    Registered Users Posts: 14,283 ✭✭✭✭leahyl


    BookBook wrote: »
    No bother to ring after a week to ask what is happening. Tell them you have seen another place you are interested in. Do not be surprised if they say they have another bid. This may or may not be true.

    One thing with your bank - have everything you need to speed up the application on Monday:

    - Check their website for a Income Verification Form and get work to fill this out before hand or do up a general one. They may accept one that is not on their headed paper.

    - Have passport or driving license.

    - 6 months of payslips, 6 months of current account statements, 6 months of credit card statements, 6 months of savings history for all your accounts inc credit union etc and a utility bill in your name and address. Some banks only want 3 months of these but best to have six just in case. Also make sure they are up to this weeks date. My bank only do quarterly statements but this wasn't good enough. I had to request and pay for up to date ones.

    -Take copies of all of these before handing over originals.

    Good luck.

    Thanks a million for the advice BookBook - since the bank is my own bank would I still need printouts of bank statements? I have already printed them but just wondering would I need them as the bank have access to my accounts anyway.

    As regards the credit union, I don't have a recent statement from them. They don't send them out very regularly. Can I just go into the credit union and request a statement?


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    #54
    BookBook
    Registered Users Posts: 99 ✭✭BookBook


    leahyl wrote: »
    Thanks a million for the advice BookBook - since the bank is my own bank would I still need printouts of bank statements? I have already printed them but just wondering would I need them as the bank have access to my accounts anyway.

    As regards the credit union, I don't have a recent statement from them. They don't send them out very regularly. Can I just go into the credit union and request a statement?

    I would still bring your statements with you anyway as I am not sure your bank have the permission to access your accounts for this purpose. Better to have them and not need them though.

    Regarding credit union - if you want to use the money in this account to show your savings commitment or loan repayments etc then yes you will need the most up to date. Ring them now and you might be able to collect a statement this evening or get it posted out today. While you are at it check with them can they do e-statements for future reference.

    You don't want anything to cause you to lose the house ( due to incomplete paperwork causing mortgage approval in principle not to be available in time etc). As I have said before - in this climate finding a house you like and can afford are few and far between.


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    #55
    MammaZita
    Banned (with Prison Access) Posts: 426 ✭✭MammaZita


    BookBook wrote: »
    I would still bring your statements with you anyway as I am not sure your bank have the permission to access your accounts for this purpose. Better to have them and not need them though.

    Regarding credit union - if you want to use the money in this account to show your savings commitment or loan repayments etc then yes you will need the most up to date. Ring them now and you might be able to collect a statement this evening or get it posted out today. While you are at it check with them can they do e-statements for future reference.

    You don't want anything to cause you to lose the house ( due to incomplete paperwork causing mortgage approval in principle not to be available in time etc). As I have said before - in this climate finding a house you like and can afford are few and far between.


    Of course the bank can access and print out your statements!!


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    #56
    BookBook
    Registered Users Posts: 99 ✭✭BookBook


    MammaZita wrote: »
    Of course the bank can access and print out your statements!![/QUOTE

    Hopefully they will but I would be prepared anyway.

    I needed an up to date statement recently and went to the bank near where I work. This was (of course) my bank but not my branch. There was a mini statement printer there but it didn't have my address on it. They said they couldn't give me a full statement only my branch could but could request one posted out to me.


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    #57
    MammaZita
    Banned (with Prison Access) Posts: 426 ✭✭MammaZita


    BookBook wrote: »
    MammaZita wrote: »
    Of course the bank can access and print out your statements!![/QUOTE

    Hopefully they will but I would be prepared anyway.

    I needed an up to date statement recently and went to the bank near where I work. This was (of course) my bank but not my branch. There was a mini statement printer there but it didn't have my address on it. They said they couldn't give me a full statement only my branch could but could request one posted out to me.

    This is a different matter entirely.

    A bank will be perfectly satisfied with its own account printouts, just not print outs from another Bank- full statements are required if its another bank.


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    #58
    Little Miss Cutie
    Registered Users Posts: 1,194 ✭✭✭Little Miss Cutie


    leahyl wrote: »
    since the bank is my own bank would I still need printouts of bank statements?

    You don't need to bring printouts for anything that is with your own bank.

    In my experience they look at those accounts before your appointment so they have idea of your history.

    This was my experience with AIB and BOI.


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    #59
    BookBook
    Registered Users Posts: 99 ✭✭BookBook


    How did you get on leahyl?


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