Mortgage Application and Kids

PCros

Hi all,

I know 2 years ago or so the banks started to take into account how many kids you had and then put that against you in terms of getting a mortgage application.

For example I just put in our details into the AIB calculator as if we did not have a kid and it gave us 35k more. (I know online calculators are to be taken with a pinch of salt).

Now, I very well know that kids cost money, but 9 out of 10 childless couples who walk into a bank and get a mortgage will most likely have a kid in the next 2-3 years. Would that not be fair to say? So there isn't much difference.

Just wondering if anybody has been in this situation lately and if there are more "kid friendly" banks around than say AIB?

alibab

I found aib the most kids friendly. They calculate it that after mortgage paid you need 1300 per adult and 250 per child disposal income . With boi it was 300 per child . I am single with 2 kids and by far AIB were fastest , easiest and most willing . I did get approved with boi but took 2 months and I walked away

pwurple

Was that recently with aib? They told us in 2013 that each child was 500 euro less disposable income.

Kbc were more child friendly for us.

PCros

As a matter of interest, does anyone know the figures the minus from an application for other charges such as gas, electricity etc?

alibab

Yes in the last 3 months

Woshy

alibab wrote: »

I found aib the most kids friendly. They calculate it that after mortgage paid you need 1300 per adult and 250 per child disposal income . With boi it was 300 per child . I am single with 2 kids and by far AIB were fastest , easiest and most willing . I did get approved with boi but took 2 months and I walked away

We found the opposite. I'm at home with a baby so we're on one salary and AIB basically told us to F off, despite us having a large sum saved and gifted to us. We went through a huge application process with them that took ages and they just said no at the end of it. Other banks said you can't have the amount you applied for but did offer us less. AIB wanted us to start at the beginning and do the whole application again to apply for a smaller amount.

We went with EBS in the end, although we got approval from other banks. I felt they were the only bank that actually took our personal circumstances (beyond the obvious stuff like that I was at home and we had a baby) into account.

I did find it frustrating the amount that was deducted for the baby. He doesn't cost nearly as much as they allowed. What I was told is the bank has to take your personal circumstances at the time and presume that we will never have more money coming in, so they have to presume that we will be putting the child through school and college without ever having any more income than we currently receive. Some of the banks were worse then others but they are just being very cautious. Most of them presumed we needed something like 2.5K a month after the mortgage was paid as disposable income. I don't know what they think we'd be spending that much on. We have no debts and our outgoings would never be that much monthly.

Woshy

oh, now I think of it KBC wanted us to have about 3K left for the three of us after the mortgage was paid. The offered us a piddly amount!

alibab

So its different rules for different banks . Frankly I think the amounts deducted pee child etc are about right it's a stress test and if you don't meet the criteria that's pretty much it . Yes with Aib it's 2,200 pee couple and 250 for the child that's where the 2,500 came from .

A baby may not cost 250 a month but as they get older they cost this and more they don't pluck these figures from thin air . The courts will also concur with the same amount when awarding maintenance as that's realistic. Back to school alone last month was approx 300 per child .

You say they only took in your circumstances with one working which in this day and age is also sensible what if you found out your child etc in the future had a condition etc that meant you could not work the banks think of all these things and hence come up with there conditions. It's a simple maths equation in the end

Marcusm

EBS is owned by AIB; I guess they are implementing different affordability policies across their group.

Mrs OBumble

alibab wrote: »

So its different rules for different banks . Frankly I think the amounts deducted pee child etc are about right it's a stress test and if you don't meet the criteria that's pretty much it . Yes with Aib it's 2,200 pee couple and 250 for the child that's where the 2,500 came from .

A baby may not cost 250 a month but as they get older they cost this and more

This.

I think the presumption in this thread that allowing less for kids is "child friendly" is really funny: it's not at all child-friendly to give a family a mortgage and without allowing enough income to meet the children's needs to a reasonable standard. And in many cases, when a couple have reached the stage of having children and buying a house, it's likely that their income won't be going up must faster than the rate of inflation for the rest of their careers. (Yes there are exceptions for people who get into management - but most people don't).

And a newborn may not be costing 250 per month directly. But they "cost" well more than that in the amount of time needed for childcare. And once they're weaned and more active, the cost of formula, nappies, constant bigger clothes, toys, doctors, house maintenance etc starts to add up very quickly.

audi12

PCros wrote: »

Hi all,

I know 2 years ago or so the banks started to take into account how many kids you had and then put that against you in terms of getting a mortgage application.

For example I just put in our details into the AIB calculator as if we did not have a kid and it gave us 35k more. (I know online calculators are to be taken with a pinch of salt).

Now, I very well know that kids cost money, but 9 out of 10 childless couples who walk into a bank and get a mortgage will most likely have a kid in the next 2-3 years. Would that not be fair to say? So there isn't much difference.

Just wondering if anybody has been in this situation lately and if there are more "kid friendly" banks around than say AIB?

9 out of 10 ? bit of a sweeping statement

Woshy

alibab wrote: »

So its different rules for different banks . Frankly I think the amounts deducted pee child etc are about right it's a stress test and if you don't meet the criteria that's pretty much it . Yes with Aib it's 2,200 pee couple and 250 for the child that's where the 2,500 came from .

A baby may not cost 250 a month but as they get older they cost this and more they don't pluck these figures from thin air . The courts will also concur with the same amount when awarding maintenance as that's realistic. Back to school alone last month was approx 300 per child .

You say they only took in your circumstances with one working which in this day and age is also sensible what if you found out your child etc in the future had a condition etc that meant you could not work the banks think of all these things and hence come up with there conditions. It's a simple maths equation in the end

Actually I meant that some of the banks only considered that I was at home with a baby when we applied and absolutely nothing else about our circumstances, not that I expected them to presume I was going back to work - obviously they can't tell the future, nor do I expect them to. We were not a straightforward case as we have other financial things going on (which of course I don't want to go into details about here) that meant it was a little more than just my husband earns x and that's it. Some of the banks considered these and looked more in depth into our finances and were more flexible and some didn't. For us there was a huge difference in what we were offered by different banks.

I completely agree that the banks need to ensure you can afford to repay and why they are cautious and I can see where they get their figures from. I still don't agree with them. I actually think the amount they allow per adult is too much. My husband and I would not spend 2200 a month between us on running the house and ourselves (and that is obvious from our bank accounts). Again, I understand that they have to ensure you have enough money for your family but I still think it's too much. Also, the idea of a blanket amount annoys me. I know underwriters need an amount to work with and obviously the bank has policies and formulae they use. I understand it and see why it's necessary but it doesn't mean it doesn't piss me off. One size doesn't fit all.

For the last year we had been saving and paying in rent over twice (in once case it was three times!) what some of the banks offered us as a monthly mortgage payment (and were still comfortable enough with regards to our monthly spending and had money left over at the end of the month) but some banks weren't interested in that fact (basing it purely on salary and we were told that) and some were (i.e. they asked us for a lot more documentation and information and looked into our finances in more depth). Some were more interested in actually looking at our finances in more detail. It just seemed strange to me that some of them were so much more inflexible and offered such varying amounts.

Not that it matters really, it all worked out for us in the end. It was just a very frustrating process.

PCros

audi12 wrote: »

9 out of 10 ? bit of a sweeping statement

Thanks for the input.

D3PO

PCros wrote: »

Hi all,

I know 2 years ago or so the banks started to take into account how many kids you had and then put that against you in terms of getting a mortgage application.

Banks have ALWAYS taken this into account. It isnt a new thing in the past few years.