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Exceptions to new Central Bank lending criteria.

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  • 15-06-2015 3:10pm
    #1
    gosplan
    Closed Accounts Posts: 9,828 ✭✭✭


    I guess this is best phrased as a couple of questions.

    1: If I am approved for say 400k based on my deposit and LTI ratio, what happens if the house goes for say 420? Is this a straight no? Crucially, if the bank give me the 20k extra, do they have to account for ALL of the mortgage as being outside the new regulations or just the extra bit?

    2: What type of people are in receipt of these exemptions. I'm hoping it's not professionals in ridiculous 100% mortgages but rather people who may be only ever so slightly overextending themselves and therefore posing very little risk long term. Obviously I'm thinking about me here but overall, surely the rules take account of whether someone has saved up for years and is a solid FTB who needs an extra bit or if someone is getting a 100% BTL. Or is this purely at the banks discretion? Do you have to make a case to them. Is it done by job? Will trainee doctors get all the exemptions?

    Any info much appreciated.

    BTW: I am aware of the risk of overextending myself, I'm not a regular guy with delusions of living in D4 who is prepared to mortgage himself to the hilt for it.


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    #2
    Rew
    Moderators, Sports Moderators Posts: 8,679 Mod ✭✭✭✭Rew


    My understanding is its people who are not over extending them selfs. ie they have solid income stream but are short deposit or have a deposit of 20% on a property over the 3.5x salary cap + solid income stream. I don't think anyone will drop below 90% LTV but im no expert.


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    #3
    gosplan
    Closed Accounts Posts: 9,828 ✭✭✭gosplan


    Rew wrote: »
    My understanding is its people who are not over extending them selfs. ie they have solid income stream but are short deposit or have a deposit of 20% on a property over the 3.5x salary cap + solid income stream. I don't think anyone will drop below 90% LTV but im no expert.

    Yeah but I'm thinking that any exception is pretty much the same. In terms of my first question, I think that the whole 420 value counts as an exception otherwise me looking for 20 would be covered by the 400 'good' part of the mortgage in terms of the solid loan to exemption ratio. But then the limits wouldn't apply at all because anyone could go say 15% over.

    So on the data the banks have to justify to CB, I'm thinking that my 420k with a very slight overstretch is the same as someone in negative equity on a 100% 420k mortgage or something crazy like that.


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    #4
    Balmed Out
    Registered Users Posts: 4,716 ✭✭✭Balmed Out


    Id guess people with strong income growth expectations like newly qualified doctors, people with exceptionally secure jobs like teachers or those with security like tied up savings would be most likely to get leeway.


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    #5
    highly1111
    Registered Users Posts: 967 ✭✭✭highly1111


    We spoke to the bank about this recently. The max they will lend anyone is 90% LTV. if you buy a house for 420k the mortgage you get will be €378. Even if you qualify for more. Myself and hubby will qualify for 90% mortgage as we have a property 11 years, never missed a payment and it will be sold before we draw down on a new mortgage. Our current property is not in negative equity. We spoke to BOI.


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    #6
    cat123456
    Registered Users Posts: 37 ✭cat123456


    Depends on the bank? Which one are you with?


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    #7
    gosplan
    Closed Accounts Posts: 9,828 ✭✭✭gosplan


    cat123456 wrote: »
    Depends on the bank? Which one are you with?

    None yet. Any advice or recommendations welcome. PM if unsuitable to pit in thread. Given the push on by the banks to get FTBs these days, should we even start treating banks like insurance companies and shop around or tell them what's already available to you.

    We're currently in our last summer of saving and austerity. Should be in a position to go then. Might bide our time depending on direction of market but tbh I think I'll be of the point of view that if the repayments are affordable and we like it then we'll take it and happily no longer care about the direction of the market.

    I know exactly what I'll be entitled to as regards the regs. Just wondering if there's any point at even looking at pics of houses above my set ceiling or if this is just not happening.


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    #8
    mel123
    Registered Users Posts: 2,209 ✭✭✭mel123


    I would advise you two things, either make a case with you own bank, black and white in email. Thats what i did and i got an extra 22k.
    seconly go to a broker. I also did this and got an extra 32k. There is a very good broker on here i think i can only recommend via pm, so let me know if you want the details.


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    #9
    gosplan
    Closed Accounts Posts: 9,828 ✭✭✭gosplan


    mel123 wrote: »
    I would advise you two things, either make a case with you own bank, black and white in email. Thats what i did and i got an extra 22k.
    seconly go to a broker. I also did this and got an extra 32k. There is a very good broker on here i think i can only recommend via pm, so let me know if you want the details.

    Technically that's 6 things.

    But anyway, thanks for the advice. I have a broker already as we've been approved before and never went ahead. He was great though.

    I just feel that with the banks offering 2k cash and things like that, it's maybe the time when you can go to them and say 'this is what I want'.

    I'm realistic but know that on paper I'd be a really good bet. I think it's just the case whether they have the four other mortgages to let me away with a bit extra. But then this could depend on the bank and what else they've done which means shop around, or is it done quarterly and if I get in at the right time they'll accept?

    It's an odd situation with very little info about it.


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