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Does the 20% deposit apply in this case?

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    #32
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Jen44 wrote: »
    Of course I told them about that house. Im not sure if you are familiar with the mortgage application process but its pretty hard to hide the fact that you have a mortgage when you have to supply bank statements etc. I also had to supply letters from the first mortgages bank clarifying the interest rate. I don't know what you are finding so difficult to understand I think i have been very clear in my posts. The mortgages are with two different banks. I didn't have the opportunity of taking the negative equity with me to the new house as the bank is no longer in the country. Bank of Scotland do not give mortgages in Ireland any more.

    It's just not heard of recently with the application of the new CBI rules. It looks like you're one of the fabled 15% due to your high income. Congrats on the new house.

    Make sure you look into the obligations of being a landlord. And remember that even though the mortgage is 660 and your rental income is 900 doesn't mean you're up 240, probably more like down 200.


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    #33
    Jen44
    Registered Users Posts: 455 ✭✭Jen44


    yes, maybe I was lucky but there are options out there! Luckily my husband is an accountant so familiar with the tax implications and such of renting! Im a very reluctant land lord and if it wasn't for the fact the house was so far from Dublin where we both work we wouldn't have moved at all, never minded the commute till we had a baby!! Fingers crossed we can sell it in in year or so! I'm also blessed that for some reason there aren't many houses available to rent in Drogheda so I should have no problems getting tenants in.


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    #34
    NyOmnishambles
    Registered Users Posts: 895 ✭✭✭NyOmnishambles


    Michael D Not Higgins wrote: »
    Realistically, I expect either the bank expect you to sell the old house and bring the negative equity with you, or you haven't told them about the house ("completely separate and with a different bank" doesn't make any sense).

    Neither are true in my case, the bank are aware of my existing mortgage and my intention to rent out the current property

    As the rental income minus tax will cover the existing mortgage payments it wasn't treated as income for assessment purposes (and I wouldn't have wanted it to be) but the outstanding mortgage amount wasn't deducted from the 3.5 X income calc either


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    #35
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    amayb wrote: »
    Maybe I'm completely wrong but I thought they would just count the monthly repayments as an expense e.g. He earns €50K per year, existing mortgage costs €7K per year so we will lend him €43,000 X 3.5?

    Obviously all other expenses would be factored into the equation but I thought this is how the existing mortgage would impact it?

    You are more or less correct if he earns 50K per year it will be 3.5 times that salary plus 3.5 times your salary banks allow only around 400 of the rental amount to be taken into consideration even if the whole rent is being covered. They will deduct the balance of what the rental mortgage amount per month is from his take home pay ex.

    3 bed house, rent is 1400 you then half that because his friend pays 50% so he needs to come with 700 banks will only allow 400 of that and will factor in the balance of 300 its a stupid way to do things but that's how they work.


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    #36
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Jen44 wrote: »
    Ive just gotten approval on a new mortgage with 10% deposit even though we are not first time buyers. Our first house is in around 20k negative equity but is in an area with a good rental market so we are going to rent it out. We just rang banks directly and asked would they be willing to budge on the new mortgage lending rules based on individual circumstance. The bank were happy to go ahead and give us the mortgage at 90 % LTV as we were not looking to borrow more than 3.5 times our combined salary. My advise would be to ring around and explain your circumstance. AIB were iron clad on the new rules but a few of the other banks were willing to work with us and as I have said we have since been approved. Just to add if you are married you will not be able to apply for a mortgage on your own as a first time buyer. I bought our original house on my own but as we are now married my husband is also not considered a first time buyer even though he has technically never bought a house. If you are not married and you still want to go ahead and buy on your own you will not be able to use any of your partners earnings towards the new mortgage so the will reduce the amount you are able to borrow significantly! Hope this helps and good luck!

    This is really good to know cause I am in the situation as yourself but we were advised that we need to sell the apartment in order to get the 10% deposit now we are not in negative equity of that much only about 6K but this is really useful to know.


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    #37
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Pac2015 wrote: »
    This is really good to know cause I am in the situation as yourself but we were advised that we need to sell the apartment in order to get the 10% deposit now we are not in negative equity of that much only about 6K but this is really useful to know.

    Keep in mind the bank has made them an exception to the rules by including them in the 15% allowable above the 80% limit. This is because of their low LTI. Your mileage may vary and even if you're in the exact same situation doesn't mean the bank will approve you for an exemption also.


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    #38
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Michael D Not Higgins wrote: »
    Keep in mind the bank has made them an exception to the rules by including them in the 15% allowable above the 80% limit. This is because of their low LTI. Your mileage may vary and even if you're in the exact same situation doesn't mean the bank will approve you for an exemption also.

    I understand that I have gone to a mortgage broker and gotten advice from him but its just good to know there is some banks willing to negotiate as it means for some people its not as bad as it once seemed, we are still a long way off being ready to purchase it will be 2016 so we are just ploughing along saving and we will see what happens with the rules next year maybe some things will change via the central bank if not then we will have to change plans.


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    #39
    sailing
    Registered Users Posts: 226 ✭✭sailing


    Pac2015 wrote: »
    I understand that I have gone to a mortgage broker and gotten advice from him but its just good to know there is some banks willing to negotiate as it means for some people its not as bad as it once seemed, we are still a long way off being ready to purchase it will be 2016 so we are just ploughing along saving and we will see what happens with the rules next year maybe some things will change via the central bank if not then we will have to change plans.


    I also recently got approval for a second mortgage with my other house in negative equity. I don't quite have the 20% deposit but they were happy to offer based on what I have saved and my current salary. It's best to talk to each bank and see what they'll offer.


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    #40
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    sailing wrote: »
    I also recently got approval for a second mortgage with my other house in negative equity. I don't quite have the 20% deposit but they were happy to offer based on what I have saved and my current salary. It's best to talk to each bank and see what they'll offer.

    Which bank was that with ?


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    #41
    sailing
    Registered Users Posts: 226 ✭✭sailing


    Pac2015 wrote: »
    Which bank was that with ?

    BOI


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    #42
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    sailing wrote: »
    BOI

    Same as previous poster.
    My current mortgage is with KBC and the broker we went deals alot with them too.
    He was very honest and truthful and told us to clear all debts from any savings we had which at the time was around 10K and then start saving again and if my apartment was in neg equity then we could do a switch up mortgage which would mean selling my apartment and buying at the same time and then qualify for the 10%.
    I suppose everyone's situation is different.


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    #43
    sailing
    Registered Users Posts: 226 ✭✭sailing


    Pac2015 wrote: »
    Same as previous poster.
    My current mortgage is with KBC and the broker we went deals alot with them too.
    He was very honest and truthful and told us to clear all debts from any savings we had which at the time was around 10K and then start saving again and if my apartment was in neg equity then we could do a switch up mortgage which would mean selling my apartment and buying at the same time and then qualify for the 10%.
    I suppose everyone's situation is different.

    One of the requirements I had was to clear a small personal loan I had outstanding. After that they seemed happy to talk. No harm calling into the different banks yourself as well as using the broker. They will give you a picture of where you're at and if required what's needed to secure a mortgage.


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    #44
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    sailing wrote: »
    One of the requirements I had was to clear a small personal loan I had outstanding. After that they seemed happy to talk. No harm calling into the different banks yourself as well as using the broker. They will give you a picture of where you're at and if required what's needed to secure a mortgage.

    That's very true we are not debt free after taking the advice of the broker we cleared his loan and the credit card so all we / I owe is the mortgage on the apartment which in one sense feels great knowing we dont owe any loans etc as we both own our cars.
    We wont be ready to buy or even look at buying till summer 2016 but I think after x-mas I will go talk to some banks and also the broker again.
    We pay 1100 rent each month and have done since July 2012 yet banks were not willing to take that into consideration when we went the last time the system keeps changing all the time it was never this hard when I was buying in 2008.
    It seems not all is lost so I will take your advice and speak to banks also.


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    #45
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    sailing wrote: »
    One of the requirements I had was to clear a small personal loan I had outstanding. After that they seemed happy to talk. No harm calling into the different banks yourself as well as using the broker. They will give you a picture of where you're at and if required what's needed to secure a mortgage.

    That's very true we are now debt free after taking the advice of the broker we cleared his loan and the credit card so all we / I owe is the mortgage on the apartment which in one sense feels great knowing we dont owe any loans etc as we both own our cars.
    We wont be ready to buy or even look at buying till summer 2016 but I think after x-mas I will go talk to some banks and also the broker again.
    We pay 1100 rent each month and have done since July 2012 yet banks were not willing to take that into consideration when we went the last time the system keeps changing all the time it was never this hard when I was buying in 2008.
    It seems not all is lost so I will take your advice and speak to banks also.


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    #46
    Jen44
    Registered Users Posts: 455 ✭✭Jen44


    I know KBC will take rent paid into account as they took the mortgage payments we were paying on our first property into consideration along with our monthly savings together to show our ability to pay off the monthly new mortgage payments


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    #47
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Jen44 wrote: »
    I know KBC will take rent paid into account as they took the mortgage payments we were paying on our first property into consideration along with our monthly savings together to show our ability to pay off the monthly new mortgage payments

    Thats also good to know as KBC are the bank the broker does the switch up mortgage with I already have a small mortgage with them for my apartment since 2008 so they can see I am a good payer plus we pay rent of 1100 each month too.


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