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

mur223

Plasmoid wrote: »

I had a bit of back and forth with KBC around statements and getting a specifically worded salary statements. After that, even though I expected the application to be quick (things weren't too complicated, at least from my perspective) they did take more than 10 days...
So I'd say for whatever reason, you're not in an unusual situation.

Thanks for the reply. When you say specifically worded salary statement do you mean the Salary Cert from your employer? Can I ask did you go through a broker or deal with KBC yourself? Our broker had my employer fill our his company salary cert so I presume that will suffice.

limnam

mur223 wrote: »

Our broker had my employer fill our his company salary cert so I presume that will suffice.

Yep, that's it.

Plasmoid

mur223 wrote: »

Thanks for the reply. When you say specifically worded salary statement do you mean the Salary Cert from your employer? Can I ask did you go through a broker or deal with KBC yourself? Our broker had my employer fill our his company salary cert so I presume that will suffice.

I went directly to KBC, and they don't have a specific form or recommended format.
My work had an automated Salary doc that was missing a lot of info, around bonuses and their guaranteed status, and going directly to HR was painful. A manually requested better doc still wasn't enough for KBC.

In the end, I just sent my HR the AIB salary cert, and KBC were perfectly happy with it..

ELM327

Michellenman wrote: »

This can’t be true?! 80% is massive! In my group of friends I don’t think any of us got a cash gift from parents. All late twenties / early 30s living and working in Dublin.

This would depend on the socioeconomic group that you associate with, as well as that of each respective group of parents.


It's possible that none of your circle have received gifts, but other people's circles are made up entirely of gift recipients.


Additionally it would be noteworthy to see how "gift" is defined. According to my bank, I would have received a "gift", however I did not actually receive a gift, I just followed the mortgage broker's advice to notate some cash income as a gift, rather than have to document forex trades

Natashaw88x

fungie wrote: »

I recently put down deposit and I'm so glad we are paying for it fully ourselves with no assistance. Perhaps our folks could of helped us out if we asked but purposefully didn't (I suppose they indirectly helped pay by putting us through school and college etc).

I think that getting a massive hand out from your folks instead of saving yourself shows that you aren't independent. Also, it could come back to haunt you with "Remember when we paid most of your house deposit ...."

Excuse you we are very independent. We’ve saved for ages and we’re fortunate enough to have been gifted also. We pay extremely high rent in Dublin so haven’t had the luxury of being able to save massively every month. I’ve rented for 10 years in Dublin and worked very hard to buy my home, no less than you just because we got a gift.

GingerLily

Natashaw88x wrote: »

Excuse you we are very independent. We’ve saved for ages and we’re fortunate enough to have been gifted also. We pay extremely high rent in Dublin so haven’t had the luxury of being able to save massively every month. I’ve rented for 10 years in Dublin and worked very hard to buy my home, no less than you just because we got a gift.

I know lots of hard working independent people who also got a gift!

Bigmac1euro

Ok, so i need quick help with this one.

Currently saving for a house, looking at buying a house in the 325k region.

Have been saving since July last year and have saved in total €11,800.

Currently saving €1200 per month and paying rent of €1200 per month. (would i have trouble getting more than 3.5 times if needed?)

Now, I could have a new job lined up and if I happened to get it we would be saving €1700 per month but this is not a definite. (No need for more than 3.5)

Solicitors fees and stamp duty would also need to be included.
We are both FTB's. So looking at 90% LTV.

We are hoping to buy next Summer, does this sound right ? Anything I'm forgetting ?
Exactly how much should I aim to have, I'm thinking 37k ??

ELM327

Bigmac1euro wrote: »

Ok, so i need quick help with this one.

Currently saving for a house, looking at buying a house in the 325k region.

Have been saving since July last year and have saved in total €11,800.

Currently saving €1200 per month and paying rent of €1200 per month. (would i have trouble getting more than 3.5 times if needed?)

Now, I could have a new job lined up and if I happened to get it we would be saving €1700 per month but this is not a definite. (No need for more than 3.5)

Solicitors fees and stamp duty would also need to be included.
We are both FTB's. So looking at 90% LTV.

We are hoping to buy next Summer, does this sound right ? Anything I'm forgetting ?
Exactly how much should I aim to have, I'm thinking 37k ??

If you want to buy at 325k you will need to have 32.5k for that, plus 1% stamp duty, plus solicitor fees estimated 2k so 37.5k is probably what you're aiming at


In order to get 325k your combined income will need to be ~93k.

averagejoe123

ELM327 wrote: »

If you want to buy at 325k you will need to have 32.5k for that, plus 1% stamp duty, plus solicitor fees estimated 2k so 37.5k is probably what you're aiming at


In order to get 325k your combined income will need to be ~93k.

You will only need a combined salary of around €83k for a €325k house where you have a 10% deposit.

el Fenomeno

If you're buying a new build and Help-to-Buy is still available next year, the breakdown would be:

5% of 325k = €16,250 from you
5% of 325k = €16,250 from Help-To-Buy
1% Stamp Duty - 325k minus VAT = €286,343.6 * 1% = €2,863.43
Solicitors Prof Fees = Estimate €1500 - €2000 (best to estimate high)
Other Fees = approx. €1,500

So that'd be approx. €23,000 you'd need.

If Help to Buy is gone, or you're not buying a new build, then it would be:

10% of 325k = €32,500
1% Stamp Duty = €3,250
Solicitors Prof Fees = Estimate €1500 - €2000
Other Fees = Approx. €1,500

So that'd be close to €40k. I'm only familiar with the purchase process for new builds, so apologies if my estimates re: other fees is incorrect.

ELM23 wrote:

In order to get 325k your combined income will need to be ~93k.

They'd only need a mortgage on 90% of the 325k, which means they would need a combined salary of ~ €83.5k.

Exemptions can be given up to 4.5 times salary, so if you got the full exemption of 4.5, then a combined salary of €65k would do.

No idea what your repayment capacity is like - €1700 savings + €1200 rent would indicate a pretty good capacity, but no idea what other outgoings you have.

awec

Depending on what you get included with the house when you buy it, you'll probably need the guts of 20k to kit it out with floors, blinds, tiling etc.

voluntary

el Fenomeno wrote: »

No idea what your repayment capacity is like - €1700 savings + €1200 rent would indicate a pretty good capacity, but no idea what other outgoings you have.

Aa a rule of thumb when estimating the max monthly repayments, take the average montly savings PLUS montly rent currently paid MINUS ~4k/12=350 (for an average home expenses while owning vs renting) then reduce this amount by ~ 30% to give space for interest rates hikes, unexpected expenses, employment changes etc.

In the given examle 1200+1200=2400; 2400-350=2050; 2050*70%=1435 per month.
So, with 10% deposit and 325k house you're talking 25+ years mortgage.

Exceptions from the 3.5x rule are easier to get in the first 3 months of each year, so one may consider waiting until January to apply for one.

EDIT: 1700 vs 1200 would push the max monthly repayment to 1645, so he could reduce the mortgage term to 20+ years (from 25+)

voluntary

awec wrote: »

Depending on what you get included with the house when you buy it, you'll probably need the guts of 20k to kit it out with floors, blinds, tiling etc.

Ah... second hand homes would already have floors and kitchens. 100 euro mattress from Argos + some second hand furnitures from the 'FREE' section on adverts and you're good to go for a nice start

Bigmac1euro

Cheers for all the helpful replies. Following this thread for about a year.
More info on this than anywhere else tbh.
I won’t be going down the new build route I’m purchasing 2nd hand.
Answers all are very helpful think I was going the right direction anyway.

awec

voluntary wrote: »

Ah... second hand homes would already have floors and kitchens. 100 euro mattress from Argos + some second hand furnitures from the 'FREE' section on adverts and you're good to go for a nice start

If he buys second hand he'll need the extra 16k for his deposit then.

wally79

FYI for all

AIB are cutting fixed rates for all new and existing customers

https://www.rte.ie/news/business/2019/0409/1041514-aib-mortgage-rates/

mur223

Anyone who went with KBC: How long does the loan pack take to be sent out to your solicitor once the valuation is complete? Thanks!

big syke

mur223 wrote: »

Anyone who went with KBC: How long does the loan pack take to be sent out to your solicitor once the valuation is complete? Thanks!

Valuation competed on 28th and loan requested on 29th Mar, pack sent on 8th

ELM327

averagejoe123 wrote: »

You will only need a combined salary of around €83k for a €325k house where you have a 10% deposit.

This was not how it worked when I got my mortgage in Q1 last year.
I needed 10% of the purchase price but my 3.5X was based on the purchase price total and not the mortgage amount. This was for KBC, AIB, BOI and one or two others.


Only brokers seemed to offer the method you described

Interested Observer

ELM327 wrote: »

This was not how it worked when I got my mortgage in Q1 last year.
I needed 10% of the purchase price but my 3.5X was based on the purchase price total and not the mortgage amount. This was for KBC, AIB, BOI and one or two others.


Only brokers seemed to offer the method you described

This is not the Central Bank guideline. You can borrow 3.5x your salary.

ELM327

Interested Observer wrote: »

This is not the Central Bank guideline. You can borrow 3.5x your salary.

That was my initial understanding too however it did not seem to be that of the banks I applied to. (It didnt matter in the end of the day as I only borrowed 1.8X my salary in the end anyway, but I'm curious as we're looking to move into a bigger house now and the 3.5X becomes more important)

Bigmac1euro

Interested Observer wrote: »

This is not the Central Bank guideline. You can borrow 3.5x your salary.

Really hoping this is the case. Otherwise I’m pi55ing in the wind. I could clearly make the repayments showing my saving capability.

hanaimai

Bigmac1euro wrote: »

Really hoping this is the case. Otherwise I’m pi55ing in the wind. I could clearly make the repayments showing my saving capability.

It's absolutely 3.5 times your income (max unless you get an exemption) up to a maximum of 90% of the purchase price of the property (unless you get a deposit exemption). If a lender isn't giving you the full 3.5 times your salary it's because you don't meet the affordability requirements for whatever reason (e.g. dependents, not enough savings, other loans etc. etc.)

Interested Observer

Guidelines are here: https://www.centralbank.ie/consumer-hub/explainers/what-are-the-mortgage-measures

"So for example, a couple with a combined income of €100,000 you can borrow up to a maximum of €350,000"

Couldn't be clearer.

Bigmac1euro

hanaimai wrote: »

It's absolutely 3.5 times your income (max unless you get an exemption) up to a maximum of 90% of the purchase price of the property (unless you get a deposit exemption). If a lender isn't giving you the full 3.5 times your salary it's because you don't meet the affordability requirements for whatever reason (e.g. dependents, not enough savings, other loans etc. etc.)

Grand!
We’ve no dependants.
We’ve no outstanding loans.
No credit cards either.

awec

ELM327 wrote: »

This was not how it worked when I got my mortgage in Q1 last year.
I needed 10% of the purchase price but my 3.5X was based on the purchase price total and not the mortgage amount. This was for KBC, AIB, BOI and one or two others.


Only brokers seemed to offer the method you described

This makes no sense, and definitely isn't correct.

For a bank, if you borrow 350,000 the affordability calculations are exactly the same no matter if you buy a 400,000 house or a 1,000,000 house. Once you are paying at least 10% of the cost yourself, the bank does not care how much of your own money you put into the house purchase.

Likewise, if you were buying a 350,000 house and only applying for a mortgage of 100k, but your joint income was 50k then under your thinking the person would be refused.

The 3.5 max is related to the amount you borrow, since that's the bit you need to actually afford to pay back.

ELM327

I hasten to add it was not my thinking, it was what I experienced in Q1 last year/Q4 2017.
My initial reading was exactly as you have all stated.

Hopefully this is correct as (moving to a second property) we will only need 80% LTV so that means our 3.5 multiplier will be based on the 80% and not property value.

awec

ELM327 wrote: »

I hasten to add it was not my thinking, it was what I experienced in Q1 last year/Q4 2017.
My initial reading was exactly as you have all stated.

Hopefully this is correct as (moving to a second property) we will only need 80% LTV so that means our 3.5 multiplier will be based on the 80% and not property value.

You must have picked it up wrong, because there's no way that's what you were told by the banks.

Thargor

For a single guy with no dependents, no loans, no debt and a 40-50% deposit saved (not sure if that makes a difference), do you need to have a long term permanent job to get approval?

I'm asking because I've had this permanent pensionable job for 5 years but I see a lot of 12 month contracts out there for the same job but 25% higher salary. I'd like to go for them but if it costs me a chance at a house then I'm not interested...

ELM327

awec wrote: »

You must have picked it up wrong, because there's no way that's what you were told by the banks.

Perhaps I took it up wrongly and didnt question as I wasn't needing 3.5 times anyway. This thread is positive for me so, gives more funds available for my next house as it's 3.5X+D = P now as opposed to 3.5X=P+D where X is mortgage amount, P is purchase price and D is deposit.

20PP in the difference!

Thargor wrote: »

For a single guy with no dependents, no loans, no debt and a 40-50% deposit saved (not sure if that makes a difference), do you need to have a long term permanent job to get approval?

I'm asking because I've had this permanent pensionable job for 5 years but I see a lot of 12 month contracts out there for the same job but 25% higher salary. I'd like to go for them but if it costs me a chance at a house then I'm not interested...

2 years permanency is the standard. You can use consecutive contracts as part of the permanency but banks will not allow you draw down unless you are permanent afair