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

sullydublin

Hi All, Anyone got experience dealing with KBC in relation to a self-employed mortgage and what is the turn around time from completed application to loan offer?

JDD

purpleisafruit wrote: »

Yeah, I'm the last house in the estate so not due to finish until November. Most banks full mortgage offer is only valid for 6 months and a lot can happen in that time

We're buying a house in Clay Farm and Savills are the estate agents. They simply don't allow the subject to mortgage clause. It's such a pain. That said, the houses are timber frame so are built quickly - the builders know that they have to complete within six months of signing contracts.

BOI have also said that they'll extend the loan offer by a couple of months if there's a delay on the build. They'll ask for updated current and savings account statements to make sure that nothing has changed. It's not a great position to be in though, if as the above poster mentioned, circumstances do change on our side and the mortgage offer is withdrawn. We'd lose our entire deposit in that case. It's a risk we have to take though.

aloooof

First-time buyers currently getting around to getting AIP here, but I've a question I'm hoping people can help with.

Currently our combined savings will amount to a 15% - 20% deposit for the houses we're looking at. General consensus is to have an emergency fund of ~6 months salary of the highest earner. Would we be best advised to pay just the 10% deposit that is required for first time buyers and keep the remainder as our emergency fund?

Wondering what people do in practice? I'm keen to give ourselves as big a safety net as possible. We currently don't have any dependents.

Mickiemcfist

aloooof wrote: »

First-time buyers currently getting around to getting AIP here, but I've a question I'm hoping people can help with.

Currently our combined savings will amount to a 15% - 20% deposit for the houses we're looking at. General consensus is to have an emergency fund of ~6 months salary of the highest earner. Would we be best advised to pay just the 10% deposit that is required for first time buyers and keep the remainder as our emergency fund?

Wondering what people do in practice? I'm keen to give ourselves as big a safety net as possible. We currently don't have any dependents.

Being honest, the way this country deal with mortgage debt you're untouchable once you own a house. You really need the safety net if you're renting. Depends on how safe you see your positions really & If you have income protection etc.

GingerLily

Mickiemcfist wrote: »

Being honest, the way this country deal with mortgage debt you're untouchable once you own a house. You really need the safety net if you're renting. Depends on how safe you see your positions really & If you have income protection etc.

This is awful advice. Please do not listen to this

sightband

GingerLily wrote: »

This is awful advice. Please do not listen to this

I didn’t really see any advice given, like it or loathe it what the poster has written is true. We seem to be one of the only counties on this planet where debt isn’t really debt where property is concerned and particularly when it is worth less than what you purchased it for.

Mickiemcfist

GingerLily wrote: »

This is awful advice. Please do not listen to this

What percentage of people putting deposits on houses in 2018 do you actually think keep 6 months salary on hand?

Can you be evicted if you own it? No. Should it be different? Yes.

keane2097

The advice is typically six months expenses rather than six months income.

cloneslad

Don't forget you're going to need a good chunk of cash set aside to put in floors, appliances (if they aren't part of the house sale), beds, sofas, lockers, blinds / curtains, cutlery, different lights if needed, house alarm, etc etc etc the list really does go on.

You're going to need a minimum of 20k to make the house comfortable and then you'll keep going and going to make it a proper home after that.

When we bought our home we didn't take the maximum mortgage we could have - but we also didn't take the minimum considering the amount of deposit we had. We set aside a healthy amount to furnish and make it a proper home, while also making sure the mortgage repayments would be comfortable for us.

chases0102

What kind of % of joint net income would be considered comfortable?

cloneslad

chases0102 wrote: »

What kind of % of joint net income would be considered comfortable?

I didn't look at it as a % of joint income as that's not relevant to us, our income is good bit more than our mortgage payments and bills.

We kept aside an amount we thought would get the house together for us - we priced items in advance, kept an eye in our spending and adjusted future spending on other items (or totally cut them out for some unnecessary items) if we spent more than planned on something that we really wanted.

Make sure you have enough to cover a number of mortgage payments, food bills etc - the general consensus is to keep 6 months worth of expenses set aside as an emergency fund, though I doubt many do when buying their first home. If you are a dual income household you should be fine if one of your salaries covers the mortgage, even if you need to budget and cut out any luxuries, should one of you lose your job.

whatever76

One thing to also consider - you will get better fixed rate if you have 20% deposit - think BOI give 3% and ulster bank announced today 2.8% for an LTV of 80% - so need to weigh that up also in your calculations

JDD

Personally I think the way the Banks underwrite mortgage applications is a sensible one.

€2100 per month as living expenses for a couple. Add €250 per child. Add any fixed expenses i.e. loan repayments and/or childcare. See how much you have leftover. That's your stress tested mortgage repayment.

Go to the myhome website and use their mortgage calculator. If you got the BOI 3% 5 year fixed mortgage, then you need to stress test the mortgage payment by an additional 2%. So put in the amount of years you want to pay off the mortgage in (most people put in the amount of years it will be until you retire i.e. 65, though when our generation retire we will more likely be 70), and put in 5% as the interest rate. Then just play around with the numbers until your monthly mortgage repayment is that leftover figure. That's the amount you can afford to borrow. Add in your 10% deposit and voila, that's your budget for when you go home shopping.

emc87

Just looking for a bit of advice on choosing a mortgage package. I know interest rates are due to rise over the next few years, so I'm keen to fix my rate for as long as possible.

PTSB offer a 3 year fixed at 3.3% and a 5 year fixed at 3.4%. The cash difference to me between the two would be about around €30 a month, so that's €1k more that I would be paying over the first 3 years if I went for the 5 year option. The broker has said that the 3 year rate is the most popular, but I was just wondering if I would save more in the long term if I went for the 5 year option (although I'd be paying more i the first 3 years). I know that nobody has a crystal ball, but I'm finding it hard to find info on how much interest rates are expected to rise over the next 5 years. Does anyone have any thoughts?

ELM327

That's crystal ball territory.

Best rates on the market - for me anyway - were with BOI. 3% fixed for 5 years or 3.5% fixed for 10 years.

Essien

Is it hard to switch mortgage provider after a few years?

For example: I'd prefer to fix for ~5 years. BOI offer the best fixed rate deal for me but their variable rates are very high. Would I be able to get the mortgage with them then switch after the fixed term? (assuming there's a better deal available then)

Also, does it cost more to go through a broker? I'm happy enough to shop around and I'm confident I can find the best deal, would a broker give me anything extra?

ELM327

Essien wrote: »

Is it hard to switch mortgage provider after a few years?

For example: I'd prefer to fix for ~5 years. BOI offer the best fixed rate deal for me but their variable rates are very high. Would I be able to get the mortgage with them then switch after the fixed term? (assuming there's a better deal available then)

Also, does it cost more to go through a broker? I'm happy enough to shop around and I'm confident I can find the best deal, would a broker give me anything extra?

Switching is easy (without sounding like the TV ad). Just contact the new bank at the end of your fixed term.

Brokers are generally free as they are paid by the banks. Don't pay for a broker.

dubstepper

Just wondering about LTI exemptions. We have 40% of the value of the house we want to buy, is around 4 achievable? What are the limits?

GingerLily

dubstepper wrote: »

Just wondering about LTI exemptions. We have 40% of the value of the house we want to buy, is around 4 achievable? What are the limits?

There's is a number of criteria, based on what other expenses do you have. What is your disposable income after the mortgage payment? Do you have children? Do you have loans?
I would say though that your LTV would definitely help for an exemption, but there is more than one criteria!

TheShow

dubstepper wrote: »

Just wondering about LTI exemptions. We have 40% of the value of the house we want to buy, is around 4 achievable? What are the limits?

Depends on the bank, as long as all other requirements are met (ability to repay within the required ratio, sufficient Net Disposable income for adults and dependants & deposit) you should be ok, I'd be getting into the bank as quick as possible though before all the exception quotas get used up.

Bawnmore

Anyone here a contractor who has been through the mortgage process? I'm currently in a salaried position, but have been offered a 12 month contract role which will very likely move to a salaried role after that time. I've discussed our requirement for mortgage with the new company, and they'd be happy to provide a letter of intention to create the role after the initial 12 months is finished.

I can see why this would still be seen as a risk for a lender, but does anyone have any experience with this? I've spoken with a broker we're in discussion with also, and he has advised it shouldn't be an issue as I've been in full time employment for more than 12 months, but I'm not convinced.

honerbright

Currently researching for a Solicitor in the Cork area, has anyone got any recommendations? Cheers!

Interested Observer

Essien wrote: »

Is it hard to switch mortgage provider after a few years?

For example: I'd prefer to fix for ~5 years. BOI offer the best fixed rate deal for me but their variable rates are very high. Would I be able to get the mortgage with them then switch after the fixed term? (assuming there's a better deal available then)

Also, does it cost more to go through a broker? I'm happy enough to shop around and I'm confident I can find the best deal, would a broker give me anything extra?

ELM327 wrote: »

Switching is easy (without sounding like the TV ad). Just contact the new bank at the end of your fixed term.

Brokers are generally free as they are paid by the banks. Don't pay for a broker.

1) Just worth mentioning that you need to engage your solicitor again to switch mortgage so you'll incur legal fees

2) Essien - if you go with BOI fixed for 5 years, once your fixed term expires you know you can just fix with BOI again immediately right? You can stay with them and never end up on their insane variable rate.

Essien

Interested Observer wrote: »

2) Essien - if you go with BOI fixed for 5 years, once your fixed term expires you know you can just fix with BOI again immediately right? You can stay with them and never end up on their insane variable rate.

I can hardly fix again for today's rate though can I?

Presumably I'd have to take the best fixed rate at the time, no?

Interested Observer

Essien wrote: »

I can hardly fix again for today's rate though can I?

Presumably I'd have to take the best fixed rate at the time, no?

Yeah of course it would be the rate of the day.

Bargain_Hound

Question about the BOI loan offer process. I've just signed contracts for a new build and signed the BOI mortgage offer. Only afterwards I noticed on the loan offer 'Conditions precedent': A valuation required.

Am I required to complete a valuation now or when the build is complete? Not due to complete for another 6 months. I know PTSB wanted a valuation before they would even issue the loan offer where as BOI have already issued the loan offer/pack.

Creamy Goodness

I've got AIP with AIB (recently promoted so I'll have to go back and show new earnings and savings) however there's a new build upcoming that I think I'm going to go for. My question is if I put down a booking deposit (€7000) it's going to be out of my savings, bringing me down from 52k total to 45k and then wanting 10% of house price by 21 days. Will this affect my ability to get the mortgage? I'm just a little bit weary paying things out of the savings only for the bank to refuse the mortgage.

My plan was to buy a house for €350k, have 52k savings and hoping for €17.5K with Help To Buy. The AIP is for €282k (before new earnings). Do these figures work out or am I pushing myself too much?

conf101

Creamy Goodness wrote: »

I've got AIP with AIB (recently promoted so I'll have to go back and show new earnings and savings) however there's a new build upcoming that I think I'm going to go for. My question is if I put down a booking deposit (€7000) it's going to be out of my savings, bringing me down from 52k total to 45k. Will this affect my ability to get the mortgage? I'm just a little bit weary paying things out of the savings only for the bank to refuse the mortgage.

My plan was to buy a house for €350k, have 52k savings and hoping for €17.5K with Help To Buy. The AIP is for €282k (before new earnings). Do these figures work out or am I pushing myself too much?

The figures you've given there come to a total of 351,500, which would leave you with 1500 left over after the cost of the house. That won't cover solicitor fees/stamp duty/etc. The bank will only give you a loan offer if they see you can cover the cost of the house plus these fees.

You'll either need to get a higher mortgage, build up your own savings a bit more, or buy a cheaper house.

On the 7k deposit, I think the bank should be fine with this, but might be worth checking in advance with your mortgage adviser. We did that before paying our deposit and it wasn't an issue.

Creamy Goodness

the houses will be sold off plan, I'd have the solicitor fees and stamp duty and surveyors etc. covered by the time it comes to signing. Currently saving 1.5k a month. the houses aren't due to be finished by september/october. would that satisfy the bank?

purpleisafruit

Creamy Goodness wrote: »

the houses will be sold off plan, I'd have the solicitor fees and stamp duty and surveyors etc. covered by the time it comes to signing. Currently saving 1.5k a month. the houses aren't due to be finished by september/october. would that satisfy the bank?

I'm in a similar situation to you. I would recommend talking to the bank. They had no issue with us paying booking deposit from savings.