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

TheShow

chases0102 wrote: »

Hi folks,

In the midst of buying here....just wondering, what is the perceived wisdom about % of monthly net income to go on housing/mortgage? No more than 30%?

Depends on gross income levels. Bigger gross income, means you get a bigger % allowance on the basis that your net disposable income would be sufficient for you and your dependants to live in. Starts at 40% afaik, can go up to 50%or 60% depending on the bank and income levels.

chases0102

Cheers for replies folk. Just thinking on a practical level, what is an acceptable % of monthly money going to housing, or rather what % does it start making living difficult. Mindful of practices 10 years ago, and eager not to overextend

Glen_Quagmire

Do banks consider applicants who are in their probation period in a new job?

I didn't think so but a mate of mine told me he got his mortgage while in probation. He used a broker so not sure if the broker done something to help or what.

GingerLily

Glen_Quagmire wrote: »

Do banks consider applicants who are in their probation period in a new job?

I didn't think so but a mate of mine told me he got his mortgage while in probation. He used a broker so not sure if the broker done something to help or what.

Yes banks will consider most things, but that doesn't mean you will be as likely to be successful in your application!

dev_ire

If anyone contacted BOI and was talking to people who said they would not get a mortgage because they paid cash rent or they wouldn't qualify for an exception or other reasons I would advise applying several times as I just got AIP from them after being told no essentially from two different people.

Also really look into the different rates and weigh up everything (can you overpay, what are the fixed options, can you defer payments, cash back options) as the best one may not look the best.

Rfrip

I met recently with Bank of Ireland and was surprised at how accomadating they seemed. Maybe I’m just incredibly naive. I’ve an overdraft (600) and credit card (800 limit) and they told me they don’t take them into account.
They told me they would calculate my 3.5 my salary on my p60. I just assumed it was my basic salary.I get a annual bonus of between 10 and 12 percent every year, I told them this wasn’t gaurenteed every year but as my last four p60s would show this bonus they would take it into account and use that to calculate the max

Long time lurker of this thread and only starting to get the ball roll on things for myself finally so appreciate every single post here.

izzyflusky

No credit card here or anything but my husband's bonus was taken into account in full when we got AIP. We weren't really expecting it.

Creamy Goodness

Banks have told me they will only take half of my bonus into consideration as it’s not guaranteed and only if I’ve gotten it in the last 3 years (only in the company for 2 so far 2/2). Bloody pity as I’ve a sizeable one at 20%.

Banks only care about overdrafts and credit cards if you can’t afford them. It’s ok to dip into an overdraft every now and again but if you’re living in it, it’s a red flag. Same with a credit card. If you’re carry a balance it’s a red flag (to me if I pay a 1c interest you should not have a credit card).

Remember when looking for a mortgage you’re trying to do one thing, show you can afford it, they don’t necessarily care how your money is spent (within reason, eg if half your take home is squandered at a bookies it’s a different story).

ELM327

BOI took 50% of my bonus into consideration.
I earned over half my base salary in bonus/OT so it was needed.

They based it off P60 and the average over last 3 years multiplied by 0.5.

toby2111

dev_ire wrote: »

If anyone contacted BOI and was talking to people who said they would not get a mortgage because they paid cash rent or they wouldn't qualify for an exception or other reasons I would advise applying several times as I just got AIP from them after being told no essentially from two different people.

Did you get refused twice? We actually got exception of 89.4% from BOI..... Then, a week later, we got turned down for a mortgage (too much risk, as my wife has neg equity on a property she bought with her brother years ago!). Girl we were dealing with fought it all the way, went to head of credit but still got refused.
We've gone to a broker but he's not hopeful because BOI turned us down......Would it be pointless applying again next month?

ELM327

Creamy Goodness wrote: »

Banks have told me they will only take half of my bonus into consideration as it’s not guaranteed and only if I’ve gotten it in the last 3 years (only in the company for 2 so far 2/2). Bloody pity as I’ve a sizeable one at 20%.

Banks only care about overdrafts and credit cards if you can’t afford them. It’s ok to dip into an overdraft every now and again but if you’re living in it, it’s a red flag. Same with a credit card. If you’re carry a balance it’s a red flag (to me if I pay a 1c interest you should not have a credit card).

Remember when looking for a mortgage you’re trying to do one thing, show you can afford it, they don’t necessarily care how your money is spent (within reason, eg if half your take home is squandered at a bookies it’s a different story).

Got approved with 6k credit card (12k limit) and 7k car loan (was 15k to begin with) outstanding, with BOI. No missed payments, perhaps that was the issue.

dev_ire

toby2111 wrote: »

Did you get refused twice? We actually got exception of 89.4% from BOI..... Then, a week later, we got turned down for a mortgage (too much risk, as my wife has neg equity on a property she bought with her brother years ago!). Girl we were dealing with fought it all the way, went to head of credit but still got refused.
We've gone to a broker but he's not hopeful because BOI turned us down......Would it be pointless applying again next month?

This was over the phone but yes was told I would not get anything except the 3.5 times mortgage. But 3rd time was much better answered eveything but I had AIB approval at that stage so maybe that swayed them but I showed no proof of that.

CIP4

ELM327 wrote: »

Got approved with 6k credit card (12k limit) and 7k car loan (was 15k to begin with) outstanding, with BOI. No missed payments, perhaps that was the issue.

Could you still get the full 3.5 times salary amount for the mortgage or do they cap it at less because of the car loan ?

ELM327

CIP4 wrote: »

Could you still get the full 3.5 times salary amount for the mortgage or do they cap it at less because of the car loan ?

You can get 3.5 times your salary (including the pro rate bonus figures as outlined) and subtracted the net debt of carloan + credt card outstanding.

chases0102

About to pull the trigger on a New Build for my partner and our daughter....Needless to say, I'm a mess of excitement and outright nerves.

Our mortgage repayments will be 32% of our net income. I'm terrified that we'll be under so much pressure - but then again, maybe I'm overthinking things! Would appreciate any advice/opinion.

It's such a huge investment, has me very distracted.

Interested Observer

ELM327 wrote: »

You can get 3.5 times your salary (including the pro rate bonus figures as outlined) and subtracted the net debt of carloan + credt card outstanding.

I've spoken to a couple of banks and have gotten AIP from one of them and none of them ever said anything like this. You just need to demonstrate your capacity to repay all your monthly debts. I have a car loan and a personal loan but myself and my partner still got 4.2 times our combined salary.

Villa05

chases0102 wrote:

Our mortgage repayments will be 32% of our net income. I'm terrified that we'll be under so much pressure - but then again, maybe I'm overthinking things! Would appreciate any advice/opinion.

I would recommend fixing your mortgage interest rate for the maximum length of time. Go for 10 years. It looks like the interest rate cycle is about to change. I reckon the best ever fixed rates are available now but not for much longer

chases0102

Had thought about going for ten alright. The 32% of our net was based on 5 year fixed. The perceived wisdom is rates are only going one way - up.

ELM327

Interested Observer wrote: »

I've spoken to a couple of banks and have gotten AIP from one of them and none of them ever said anything like this. You just need to demonstrate your capacity to repay all your monthly debts. I have a car loan and a personal loan but myself and my partner still got 4.2 times our combined salary.

They didnt say it to me until the underwriters came back. AIP is easy to get, actual approval from the underwriters is another story.
Capacity to repay was never an issue - clean ICB going back years, perfect credit report never missed a repayment etc.

I do get the feeling that with mortgages not only does it depend on which bank you speak to, but then which advisor too, and which underwriter.

izzyflusky

ELM327 wrote: »

They didnt say it to me until the underwriters came back. AIP is easy to get, actual approval from the underwriters is another story.
Capacity to repay was never an issue - clean ICB going back years, perfect credit report never missed a repayment etc.

I do get the feeling that with mortgages not only does it depend on which bank you speak to, but then which advisor too, and which underwriter.

I would have thought all forms go to the underwriters for AIP. Mine certainly did, they don't look for all of the info for formal approval, mostly the house's details.

ELM327

izzyflusky wrote: »

I would have thought all forms go to the underwriters for AIP. Mine certainly did, they don't look for all of the info for formal approval, mostly the house's details.

No, I was sent AIP with a cursory review not - afaik anyway - done by the underwriters. It was a 30 minute phone call and once the documents were provided I was posted AIP.

The actual approval was different, I had to explain every transaction on my account, why did I withdraw money, buy things, move between savings accounts, sell/buy shares etc.

Interested Observer

ELM327 wrote: »

They didnt say it to me until the underwriters came back. AIP is easy to get, actual approval from the underwriters is another story.
Capacity to repay was never an issue - clean ICB going back years, perfect credit report never missed a repayment etc.

I do get the feeling that with mortgages not only does it depend on which bank you speak to, but then which advisor too, and which underwriter.

I appreciate AIP is different to final draw down but you get AIP via an underwriter. I had to provide up to date statements for all my loans etc so the bank is well aware of them, and as I said there was never a suggestion of what you've said above. Think about all the extra work it would cause for everyone involved if they give you AIP for a certain amount, you go look for houses and go sale agreed based on that, only for them to come back to you and say "oh wait, that was too much, we have to do everything again", would be crazy. Maybe it does depend on who you talk to.

Edit - what you've described above, a 30 min phone call followed by a letter is nothing like the process we followed. I've already been quizzed on a lot of my transactions, deposits, withdrawals etc. I have emails from our point of contact in the bank saying our application is with the underwriter.

ELM327

Interested Observer wrote: »

I appreciate AIP is different to final draw down but you get AIP via an underwriter. I had to provide up to date statements for all my loans etc so the bank is well aware of them, and as I said there was never a suggestion of what you've said above. Think about all the extra work it would cause for everyone involved if they give you AIP for a certain amount, you go look for houses and go sale agreed based on that, only for them to come back to you and say "oh wait, that was too much, we have to do everything again", would be crazy. Maybe it does depend on who you talk to.

It is crazy. I agree. And very frustrating.
But that was what I was enduring and why this process took so long for me.

bush

Got approved for 3.5 my salary from PTSB today. Delighted. It pays to go to all the banks cos I basically got turned down by ulster bank and got offered a good bit less than 3.5 from AIB. Im booked into BOI tomorrow but I cant see them offering me anything better.
This thread and forum has been very helpful over the last year of saving and researching.

JDD

When we met with our BOI advisor she said that some people go through the cursory process i.e. the 30 min phone call and then you submit current, savings and loan (if any) statements. Again, I think that just goes to an advisor, not underwriting. To me, that's not an AIP - that's the equivalent of doing an online calculator. For us, because we weren't straightforward, the advisor said that our application had to go through the full rigour of underwriting before any AIP could issue. I was happy enough with that, because I didn't want to bid on any properties without knowing for sure that we could get the approval. I don't think we need to provide anything else to BOI now, unless we go over our 6 month approval limit (and they'll only allow a month or two) in which case we need to submit updated current account statements and 3 recent payslips.

izzyflusky

My AIP definitely went to an underwriter (i enquired half way through the process with my broker and was told and underwriter had been assigned at that stage) , I sent in all my documentation, had to explain transactions, etc. It took 10 working days and all we had to do afterwards is send the house details once sale agreed and get valuation done to obtain formal offer.

Interested Observer

I've looked up the email we received, "full assessment with an underwriter" is the exact phrasing used, in relation to our application which we have now received AIP for.

I don't believe at all that the amount we can borrow will now be reduced based on my outstanding loans.

dellas1979

bush wrote: »

Got approved for 3.5 my salary from PTSB today. Delighted. It pays to go to all the banks cos I basically got turned down by ulster bank and got offered a good bit less than 3.5 from AIB. Im booked into BOI tomorrow but I cant see them offering me anything better.
This thread and forum has been very helpful over the last year of saving and researching.

Well, AIB would only offer me a 25 year mortgage. BOI offered me 30.

It really does depend on needs etc.

Cuddlesworth

Interested Observer wrote: »

I've looked up the email we received, "full assessment with an underwriter" is the exact phrasing used, in relation to our application which we have now received AIP for.

I don't believe at all that the amount we can borrow will now be reduced based on my outstanding loans.

When dealing with exemptions I would not be so certain. Its not a loan offer and they don't have to honour it.

Interested Observer

Cuddlesworth wrote: »

When dealing with exemptions I would not be so certain. Its not a loan offer and they don't have to honour it.

I know that yes. All the letters they've sent us are pretty clear on that.