Saving/Applying for a mortgage 2015/16/17/18/19

ad1234

Hi all, we have placed a booking deposit on a house that wont be ready until end of summer. was just wondering how it goes with mortgage approval would anyone know? we are booked to formally apply on Friday, would be extremely surprised if it wasnt approved. we know it will be to be honest, but will the offer expire by then or will we have to reapply or can we renew if it does? we are with ulsterbank. they are being super slow to answer us back so thought id ask here. thanks!

EnergyPro

Hi all. Just a query on lending rules etc. Myself and my partner are looking into buying in the near future. I am working in a permanent role on salary of 40k. My partner is on 13k in a contract role until June which to be honest will be renewed. She is only in this particular role 3 months though but has been in similar continuous employment for a few yrs. What we are wondering is will both of our salaries be taken into account to determine how much we can borrow or will it just be mine as hers is not permanent? It would either be 40k x 3.5 = 140k or 53k x 3.5 = 185.5k. It will make a big difference to us in terms of the houses in our preferred area that we will be able to consider. Thanks in advance.

crby

Hi all. I'm thinking of selling my apartment to a family member as looking to move next year. It would take the hassle out of trying to sell and buy at the same time as i'd be able to stay there until i found somewhere or my new place was ready. It seems like the ideal scenario for me and my family but i just want to make sure i wont face any issues, for instance, would the bank look unfavorably at this when i'm seeking mortgage approval? (ive had a meeting with bank a few months ago so know roughly what i'd get but had to save a bit longer before applying)

I'm going to have another meeting with the bank shortly but i just wanted to know if any of you had any advice or have been in a similar situation?

Thanks

ad1234

EnergyPro wrote: »

Hi all. Just a query on lending rules etc. Myself and my partner are looking into buying in the near future. I am working in a permanent role on salary of 40k. My partner is on 13k in a contract role until June which to be honest will be renewed. She is only in this particular role 3 months though but has been in similar continuous employment for a few yrs. What we are wondering is will both of our salaries be taken into account to determine how much we can borrow or will it just be mine as hers is not permanent? It would either be 40k x 3.5 = 140k or 53k x 3.5 = 185.5k. It will make a big difference to us in terms of the houses in our preferred area that we will be able to consider. Thanks in advance.

we are in the same situation, i work in childcare but have a slightly larger salary but its only over the school year, 38 weeks. what the bank are doing is averaging out my salary made within the 38weeks into 52 weeks. in my old contracts too it stated until june, i went back to my employer and asked for there to be something added stating that it was a rolling contract between September and june renewed every year, with prep work paid in august and addition work outside of ECCE hours required upon request. this was fine by the bank. once they had proof i had something to go back to rather than just straight out unemployed all was fine. they did want six months continued employment though or a permanent contract.

EnergyPro

ad1234 wrote: »

we are in the same situation, i work in childcare but have a slightly larger salary but its only over the school year, 38 weeks. what the bank are doing is averaging out my salary made within the 38weeks into 52 weeks. in my old contracts too it stated until june, i went back to my employer and asked for there to be something added stating that it was a rolling contract between September and june renewed every year, with prep work paid in august and addition work outside of ECCE hours required upon request. this was fine by the bank. once they had proof i had something to go back to rather than just straight out unemployed all was fine. they did want six months continued employment though or a permanent contract.

Hi ad1234. Thanks for your reply. That's really interesting and very similar to our situation. My only concern would be the duration with current employer being so short so no history of contracts being renewed etc. Have you been with your employer for long? I would be hoping that as I would be the main earner they would be stricter about my situation and a little more understanding of the sector my partner is in ( where permanent roles are few and far between). The extra bit of a mortgage would make a big difference to us, but I guess the rules are there for a reason as it would be a relatively high repayment for just my salary to be covering if she was to lose her job (touch wood!!). Gonna talk to the banks about it but just like to get a feel for people's experiences first.

TheShow

crby wrote: »

Hi all. I'm thinking of selling my apartment to a family member as looking to move next year. It would take the hassle out of trying to sell and buy at the same time as i'd be able to stay there until i found somewhere or my new place was ready. It seems like the ideal scenario for me and my family but i just want to make sure i wont face any issues, for instance, would the bank look unfavorably at this when i'm seeking mortgage approval? (ive had a meeting with bank a few months ago so know roughly what i'd get but had to save a bit longer before applying)

I'm going to have another meeting with the bank shortly but i just wanted to know if any of you had any advice or have been in a similar situation?

Thanks

I do not see how this would negatively effect your mortgage application. As long as you meet the banks affordability rules.

TheShow

ad1234 wrote: »

Hi all, we have placed a booking deposit on a house that wont be ready until end of summer. was just wondering how it goes with mortgage approval would anyone know? we are booked to formally apply on Friday, would be extremely surprised if it wasnt approved. we know it will be to be honest, but will the offer expire by then or will we have to reapply or can we renew if it does? we are with ulsterbank. they are being super slow to answer us back so thought id ask here. thanks!

Approval lasts for 6 months

TheShow

EnergyPro wrote: »

Hi all. Just a query on lending rules etc. Myself and my partner are looking into buying in the near future. I am working in a permanent role on salary of 40k. My partner is on 13k in a contract role until June which to be honest will be renewed. She is only in this particular role 3 months though but has been in similar continuous employment for a few yrs. What we are wondering is will both of our salaries be taken into account to determine how much we can borrow or will it just be mine as hers is not permanent? It would either be 40k x 3.5 = 140k or 53k x 3.5 = 185.5k. It will make a big difference to us in terms of the houses in our preferred area that we will be able to consider. Thanks in advance.

Short term contracts like what you’ve described generally are no taken into account, best way to follow me out for sure is to talk to your bank or a mortgage broker, as different lenders will have slightly different policies.

Juwwi

Hi does anyone know what rate of VAT estate agents charge ? Thanks

kippy

robbie1977 wrote: »

Hi does anyone know what rate of VAT estate agents charge ? Thanks

23 percent.

Interested Observer

Have a question about mortgage overpayments.

Say I'm planning on taking out a mortgage over 30 years, but we can pay a little extra but decide to overpay by €200 per month. From reading the T&Cs on the various lender websites, this seems to be deducted from the capital balance, and should result in a pretty significant interest saving over the life of the mortgage.

Imagine that the mortgage balance is such that this overpayment will reduce the lifetime of the mortgage by exactly 5 years.

Is there any material difference between taking out a mortgage and doing the above, and simply taking out a mortgage for 25 years? Just wondering that if that 200 extra you pay off per month just comes directly from the capital balance that there may be some interest saving by doing that instead of taking a 25 year mortgage?

Or am I just talking nonsense?

Cuddlesworth

Interested Observer wrote: »

Have a question about mortgage overpayments.

Say I'm planning on taking out a mortgage over 30 years, but we can pay a little extra but decide to overpay by €200 per month. From reading the T&Cs on the various lender websites, this seems to be deducted from the capital balance, and should result in a pretty significant interest saving over the life of the mortgage.

Imagine that the mortgage balance is such that this overpayment will reduce the lifetime of the mortgage by exactly 5 years.

Is there any material difference between taking out a mortgage and doing the above, and simply taking out a mortgage for 25 years? Just wondering that if that 200 extra you pay off per month just comes directly from the capital balance that there may be some interest saving by doing that instead of taking a 25 year mortgage?

Or am I just talking nonsense?

https://www.drcalculator.com/mortgage

You can usually either reduce the term or reduce the payments. I believe its usually better to reduce the payments at the start, then reduce the term once you're comfortable.

Interested Observer

Cuddlesworth wrote: »

https://www.drcalculator.com/mortgage

You can usually either reduce the term or reduce the payments. I believe its usually better to reduce the payments at the start, then reduce the term once you're comfortable.

Well that's a handy thing, bookmarked thanks.

Sorry what do you mean by reducing payments? I'm a bit confused, you overpay for a while and then once that while is up you reduce your payments slightly while keeping the term of the mortgage the same?

tommythecat

Interested Observer wrote: »

Well that's a handy thing, bookmarked thanks.

Sorry what do you mean by reducing payments? I'm a bit confused, you overpay for a while and then once that while is up you reduce your payments slightly while keeping the term of the mortgage the same?

Everytime you overpay unless you specify otherwise it will reduce the payment and keep the term the same. You can ask them to have it reduce the term if you wish but I think that's not the best idea. The first option gives you more flexibility should rates rise.
Lets say at the moment your repayments are 1000 euro. When you overpay your 200 euro the next month your repayments will be 999 for example. So you should simply then overpay by 201 euro to keep reducing the term. The next month your repayment will be 998 so you overpay by 202 etc. Doing it this way the term is reducing and your repayments are coming down so should you run into difficulties then you can stop the overpayments and then have a lower monthly repayment till you get back on your feet.
It's what i have been doing for 8 years and i find it great. The other option is very limiting and doesn't save any more money. Both overpayments are coming off the Capital

Interested Observer

tommythecat wrote: »

Everytime you overpay unless you specify otherwise it will reduce the payment and keep the term the same. You can ask them to have it reduce the term if you wish but I think that's not the best idea. The first option gives you more flexibility should rates rise.
Lets say at the moment your repayments are 1000 euro. When you overpay your 200 euro the next month your repayments will be 999 for example. So you should simply then overpay by 201 euro to keep reducing the term. The next month your repayment will be 998 so you overpay by 202 etc. Doing it this way the term is reducing and your repayments are coming down so should you run into difficulties then you can stop the overpayments and then have a lower monthly repayment till you get back on your feet.
It's what i have been doing for 8 years and i find it great. The other option is very limiting and doesn't save any more money. Both overpayments are coming off the Capital

Makes sense, I had no idea that's how it worked. Thanks for the explanation. That's even better I guess, if you're reducing your capital balance a little more on a month-by-month basis. I initially had it in my head to take a 25 year mortgage but 30 with an overpayment option just gives a bit more flexibility.

Bananaleaf

tommythecat wrote: »

Everytime you overpay unless you specify otherwise it will reduce the payment and keep the term the same. You can ask them to have it reduce the term if you wish but I think that's not the best idea. The first option gives you more flexibility should rates rise.
Lets say at the moment your repayments are 1000 euro. When you overpay your 200 euro the next month your repayments will be 999 for example. So you should simply then overpay by 201 euro to keep reducing the term. The next month your repayment will be 998 so you overpay by 202 etc. Doing it this way the term is reducing and your repayments are coming down so should you run into difficulties then you can stop the overpayments and then have a lower monthly repayment till you get back on your feet.
It's what i have been doing for 8 years and i find it great. The other option is very limiting and doesn't save any more money. Both overpayments are coming off the Capital

Wow - this is so confusing, I can't even begin to get my head round that! Not a reflection on your explanation, but on my mathematical understanding.

Got word today that our contracts have arrived in the solicitor's office. Starting to get *a bit* excited now!

tommythecat

Interested Observer wrote: »

Makes sense, I had no idea that's how it worked. Thanks for the explanation. That's even better I guess, if you're reducing your capital balance a little more on a month-by-month basis. I initially had it in my head to take a 25 year mortgage but 30 with an overpayment option just gives a bit more flexibility.

And I should just say that overpaying saves you the most money in the first years of the Loan. Towards the end of the loan you are mainly paying off the capital so very little interest. You are mainly paying interest in the first years so thats why the overpayments that come off the capital really save you a lot of cash in the long run.

Interested Observer

tommythecat wrote: »

And I should just say that overpaying saves you the most money in the first years of the Loan. Towards the end of the loan you are mainly paying off the capital so very little interest. You are mainly paying interest in the first years so thats why the overpayments that come off the capital really save you a lot of cash in the long run.

Yeah I can see that from the calculator above, even in the first 60 months of the mortgage for the amount we're trying to borrow, every €100 per month overpaid results in about €7500 saving over the life of the mortgage which is nuts.

Really wish I had a crystal ball going into all this. I think we're going to fix for 5 years with BOI and in an ideal situation we'd be below 80% LTV by the time that fixed term is up, but of course the value of the house could drop due to factors outside our control and we could be stuck on BOIs variable rate for example which is dreadful. If we do get below 80% LTV then (at the moment) there are some pretty attractive rates out there to fix again, e.g. could go with KBC for 10 years at 2.99%.

But again who knows what the market will be like in 5/6 years, in terms of what the banks are offering and property values.

danoriordan1402

That's very interesting tommythecaton the overpayments, I was in the fortunate position to get a tracker of 1.1% over ECB rate about 8 years ago. My repayments are around 1000/month and I could over pay by 200/300. Im wondering since my interest rate is so low should I just focus on the principal?

tommythecat

danoriordan1402 wrote: »

That's very interesting tommythecaton the overpayments, I was in the fortunate position to get a tracker of 1.1% over ECB rate about 8 years ago. My repayments are around 1000/month and I could over pay by 200/300. Im wondering since my interest rate is so low should I just focus on the principal?

How the Eff did you get a tracker 8 years ago?!! Very lucky!! If you are on a tracker then you are better off either saving or investing your money. With a really low interest rate, you are already paying a fair bit off your capital i would assume. But if you want to protect yourself against interest rate rises then obviously overpaying now will keep reducing your repayments. But remember to increase your overpayment by whatever it decreases by each month to keep bringing the term down over the course of the loan.

tommythecat

Interested Observer wrote: »

Yeah I can see that from the calculator above, even in the first 60 months of the mortgage for the amount we're trying to borrow, every €100 per month overpaid results in about €7500 saving over the life of the mortgage which is nuts.

Really wish I had a crystal ball going into all this. I think we're going to fix for 5 years with BOI and in an ideal situation we'd be below 80% LTV by the time that fixed term is up, but of course the value of the house could drop due to factors outside our control and we could be stuck on BOIs variable rate for example which is dreadful. If we do get below 80% LTV then (at the moment) there are some pretty attractive rates out there to fix again, e.g. could go with KBC for 10 years at 2.99%.

But again who knows what the market will be like in 5/6 years, in terms of what the banks are offering and property values.

Remember that if you fix a lot of banks will not allow overpayments or perhaps only one lump sum a year. Make sure you check that out.

aloooof

tommythecat wrote: »

How the Eff did you get a tracker 8 years ago?!! Very lucky!! If you are on a tracker then you are better off either saving or investing your money. With a really low interest rate, you are already paying a fair bit off your capital i would assume. But if you want to protect yourself against interest rate rises then obviously overpaying now will keep reducing your repayments. But remember to increase your overpayment by whatever it decreases by each month to keep bringing the term down over the course of the loan.

Curious how this works in practice. Do you have to setup the overpayment amount with the lender, or can we setup an overall payment amount?

For example, taking your previous figures, it seems like there are 2 options.
1. Mortgage is 1000. We setup an overpayment amount of 200.
Next month mortgage is 999, which would mean we automatically pay 1199?

Or could we set it up with the lender as follows:
2. Mortgage is 1000 we decide to pay 1200 every month.
Next month mortgage is 999 but we still pay 1200?

Which approach do the lenders accommodate?

tommythecat

aloooof wrote: »

Curious how this works in practice. Do you have to setup the overpayment amount with the lender, or can we setup an overall payment amount?

For example, taking your previous figures, it seems like there are 2 options.
1. Mortgage is 1000. We setup an overpayment amount of 200.
Next month mortgage is 999, which would mean we automatically pay 1199?

Or could we set it up with the lender as follows:
2. Mortgage is 1000 we decide to pay 1200 every month.
Next month mortgage is 999 but we still pay 1200?

Which approach do the lenders accommodate?

Hi,
Essentially you need to do this manually. The bank won't look after this for you. I have the mortgage account number so i just deposit the figure adjustment at the end of the month.
So as an example
1. Mortgage is 1000 taken via DD. I then manually transfer the overpayment of 200 via online banking to the mortgage account.
Next month the repayment drops to 999. I then manually transfer the overpayment of 201. And so on... It just takes 3 minutes
This keeps it simple and it means if i have a bad month i can just not overpay and i can also overpay more if i have it lying around! fat chance!

aloooof

tommythecat wrote: »

Hi,
Essentially you need to do this manually. The bank won't look after this for you. I have the mortgage account number so i just deposit the figure adjustment at the end of the month.
So as an example
1. Mortgage is 1000 taken via DD. I then manually transfer the overpayment of 200 via online banking to the mortgage account.
Next month the repayment drops to 999. I then manually transfer the overpayment of 201. And so on... It just takes 3 minutes
This keeps it simple and it means if i have a bad month i can just not overpay and i can also overpay more if i have it lying around! fat chance!

Perfect, thanks a million for the explanation.

Jacinta086

Hi everyone,

After ALOT of saving we found out this week that we have successfully bid on a property.
We are first time buyers and so a bit clueless as to the minefield that is to come.

I wondered if anyone could recommend;
1. A good solicitor (we are buying an existing build in Dublin 15)?
2. What i need to make sure is included in our legal fees quote; land registry fees, search fees, closing search fees...anything else?
3. We need to do a structural survey - can anyone recommend a good surveyor and accredited valuer (not sure if you can get someone to do both!)

Cuddlesworth

tommythecat wrote: »

And I should just say that overpaying saves you the most money in the first years of the Loan. Towards the end of the loan you are mainly paying off the capital so very little interest. You are mainly paying interest in the first years so thats why the overpayments that come off the capital really save you a lot of cash in the long run.

300k loan over 30 years at 3% interest, total interest paid is 155,323.

Overpayment of 200 Euros per month starting at month 1.

Reducing the term - Extra payments of 57,400 and savings of 34,427 with a end date of September 2041(6year reduction). Total Interest paid is 120,904.

Reducing the payments - Extra payments of 71,674, savings of 17,842 and a term reduction of 1 month. (for maths reasons)

Like the other post said, if you transfer the same amount each month regardless of the loan type, eg 1400 per month on a 1200 month payment, then it will effectively do both. But you really only see a proper payment reduction around 20 years in.

Eg the above loan is a repayment of 1265 a month, 10 years of overpayment of 1465 per month(1265+200) leaves a new monthly payment amount of 830 quid a month serviced on the loan.

You may the most interest at the start, so overpaying early when possible is the best option.

Interested Observer

Central Bank are releasing a review of the mortgage rules on deposit %, loan amount to salary etc today. I don't think changes are expected (well, Goodbody's don't think changes are expected) but will have an impact on people in this thread if they do change. I know I'd be in trouble for a deposit if they went back to the old 10% up to 220k rule.

keane2097

https://www.rte.ie/news/2017/1128/923291-central-bank-mortgage-review/

zl1whqvjs75cdy

keane2097 wrote: »

https://www.rte.ie/news/2017/1128/923291-central-bank-mortgage-review/

No great changes then. Thank God. Last thing I need is legislation rocking the precarious boat I'm in.

toby2111

Have they made it slightly harder for second time buyers to buy? Maybe I've read it wrong but seems it'll now be harder to get an exemption. Hoping to get LTV exemption early next year but am worried that it'll be even harder now to get one...