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Mortgage application worries

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  • 08-01-2015 8:08pm
    #1
    Kran
    Registered Users Posts: 231 ✭✭


    Hi all. Myself and OH are almost ready to apply for a mortgage. We are going with AIB hopefully. We have 10 percent deposit and enough for legal fees, stamp duty etc. Both in full time jobs and permanent. Myself for 14 years and her for 6. Gross around 34k each. Both hold current accounts and joint account with AIB. Have solid savings for last 2 years or more and proof of rent paid but it was not direct debit so I only have written and stamped receipts. I have paid off two car loans to Aib, total 30k and never missed a payment. She has paid off 1 car loan of 15k and never missed a payment. I have a credit card which I used a lot but never missed a minimum payment in fact always paid hundreds more than the minimum payment each month. I recently totally cleared this card so basically owe no one anything. It was an AIB credit card also.
    Even with all this I am still worried because of some late paid Direct Debits on my current account. This was just due to carelessness on my part. They were for utility bills and VHI. 1 in the last 6 months, 1 in feb aswell and 2 more in 2013. So basically 4 in the last 2 years all spread well apart and all paid when they re requested the direct debit 2 weeks later.
    Do you think I will be refused based on these circumstances?


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    #2
    Graciefacey
    Registered Users Posts: 498 ✭✭Graciefacey


    Kran wrote: »
    Hi all. Myself and OH are almost ready to apply for a mortgage. We are going with AIB hopefully. We have 10 percent deposit and enough for legal fees, stamp duty etc. Both in full time jobs and permanent. Myself for 14 years and her for 6. Gross around 34k each. Both hold current accounts and joint account with AIB. Have solid savings for last 2 years or more and proof of rent paid but it was not direct debit so I only have written and stamped receipts. I have paid off two car loans to Aib, total 30k and never missed a payment. She has paid off 1 car loan of 15k and never missed a payment. I have a credit card which I used a lot but never missed a minimum payment in fact always paid hundreds more than the minimum payment each month. I recently totally cleared this card so basically owe no one anything. It was an AIB credit card also.
    Even with all this I am still worried because of some late paid Direct Debits on my current account. This was just due to carelessness on my part. They were for utility bills and VHI. 1 in the last 6 months, 1 in feb aswell and 2 more in 2013. So basically 4 in the last 2 years all spread well apart and all paid when they re requested the direct debit 2 weeks later.
    Do you think I will be refused based on these circumstances?

    Hi, in a mortgage application the lenders will look at the last 6 months and if there have been any unpaids. If there are any, any good mortgage advisor will ask you what these were and why they happened, ie did they come out early, day before payday etc. In my experience, as long as you can explain it and the mortgage advisor addresses it in the initial application it will be clearer for the next lender to make their decision. I base all applications on 3 things, equity input, employment sustainability and repayments capacity. Let me know if I can help you further.


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    #3
    Kran
    Registered Users Posts: 231 ✭✭Kran


    Graciefacey wrote: »
    Hi, in a mortgage application the lenders will look at the last 6 months and if there have been any unpaids. If there are any, any good mortgage advisor will ask you what these were and why they happened, ie did they come out early, day before payday etc. In my experience, as long as you can explain it and the mortgage advisor addresses it in the initial application it will be clearer for the next lender to make their decision. I base all applications on 3 things, equity input, employment sustainability and repayments capacity. Let me know if I can help you further.

    Thanks for your reply.
    To be honest it would have just been because I forgot to leave enough money in my current account, probably because I move too much into our joint account for saving towards a mortgage.
    Our mortgage advisor seemed very positive about our situation ie. Savings record, employment security and our ability to repay.
    I'm just wondering do you need an absolutely unblemished record to get approved these days because it's all down to a computer decision or is there actually a person on the other end who can see our great record generally and just the odd little blemish.
    We are only looking for a 150k mortgage which is quite modest I personally think.


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    #4
    Graciefacey
    Registered Users Posts: 498 ✭✭Graciefacey


    Kran wrote: »
    Thanks for your reply.
    To be honest it would have just been because I forgot to leave enough money in my current account, probably because I move too much into our joint account for saving towards a mortgage.
    Our mortgage advisor seemed very positive about our situation ie. Savings record, employment security and our ability to repay.
    I'm just wondering do you need an absolutely unblemished record to get approved these days because it's all down to a computer decision or is there actually a person on the other end who can see our great record generally and just the odd little blemish.
    We are only looking for a 150k mortgage which is quite modest I personally think.

    2 or 3 years ago it would have been very black and white but that has changed. I have known cases that were slightly outside criteria that were successful. It all depends on your advisor they need to be in constant contact with you and on top of things, they can put a human touch on the application.


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    #5
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    You will deal with a Mortgage Advisor in your AIB branch however he/she will package your loan application and submit to the lending dept. where your application will be assessed by an underwriter. Your application will be assessed on the following:
    • Repayment capacity - Can you afford the repayments on the mortgage - need to show regular monthly savings and or rent to be equal or more than stressed monthly repayment. Lenders prefer to see rent paid by bank transfer or standing order rather than cash however they may accept rent book and copy of rental agreement.
    • Good management of current accounts and credit cards. No referral fees, use of overdraft, or unpaid direct debits. Credit cards to be cleared monthly.
    • Savings profile - regular monthly savings.
    • Employment - Length of employment, earnings, employment sector, if pensionable.
    • Loan to Value. Max. loan to value with AIB is 92%.
    Based on the information below and the fact that you are long term customers of AIB with an excellent repayment record with them I think you should have no problem getting the mortgage once they accept your paying rent in cash. If they decline your application over the direct debits well then you will have no problem getting approved elsewhere as you will only have to submit 6 months bank statements with your application.
    Trish


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