Applying for a Mortgage

amrt

Myself and my partner are hoping to apply for a mortgage in a few months as we are applying for planning permission. We are both in full time employment and earn around €30k each. We have saved around €25k saved and both have regular savings each month of €800 between us in an account we set up last year. I have a car loan with around €2k left and have around €1500 of a credit card bill which I am hoping to have cleared in the next few months. We don’t have any other bills as we both live at home. I am just wondering what are our chances of getting a mortgage in today’s climate or is there anything we could be doing now before we apply to improve our chances?

cat123456

It sounds like you are in a good position for a mortgage. Are the jobs permanent? They need to be to get the mortgage. Also, are you paying rent? This + the 800pm will be looked at as part of your ability to repay. Max you can borrow is 3.5 times salary so 210k. The repayment on this is roughly 1000 per month (figure not accurate!) so bank want to see that you can repay this + stress tested another couple of %. It will make life easier if you clear the loan and credit card bill.

cat123456

Just reread that. If you are living at home the 800 savings per month only will go towards your assessment so the bank will let you borrow the equivalent of whatever that amounts to. I reckon it will be less than your max allowed (210k) The only way to get that up is to save another few hundred a month or pay rent. I remember our savings and rent added up to the exact repayment amount but we were still offered less after the stress test.

bbudab

Sounds good, just remember your monthly repayments will also be based on how old you will be on your next birthday. The age of retirement is 65. So if you are 36 on your next birthday, you will be making repayments over 29 years.

seamus

One of the big things you can do right now is keep your bank account clean and regular. Avoid massive random cash withdrawals - €40 and €100 here and there is fine but if you seem to randomly take €500 out of the account once a month, the bank may ask questions about what that is and what it's being spent on.

If either of you do any gambling, keep it a million miles away from your bank account. A sniff of any payments into or out of the account to online gambling sites and you can forget about a mortgage.

joey100

If your not paying some form of rent on top of that 800 euro a month between you I would say you will need to get saving more. Me and my partner recently got a mortgage, I had 4000 euro car loan and she had 3000 car loan, living with my parents so paying no real rent. But we were saving around 2200 a month, pretty much every penny was saved. You need to show you can pay the mortgage and all bills that will come with the house as well as be able to pay an increase in the mortgage interest rates if they rise.

Jen44

I would agree with others and try save somewhere more like 1k- 1.5k a month between you if possible as they will calculate your monthly payments at a stressed interest rate of usually 1.5% higher then what the current variable rate is. I suppose it will depend on what kind of mortgage you are hoping to get too but obviously the more your ability to save the better

Sala

seamus wrote: »

If either of you do any gambling, keep it a million miles away from your bank account. A sniff of any payments into or out of the account to online gambling sites and you can forget about a mortgage.

I heard this before and in our case it's not true- we have a bit of gambling on one of our accounts and they never mentioned it at all

Flatzie_poo

Sala wrote: »

I heard this before and in our case it's not true- we have a bit of gambling on one of our accounts and they never mentioned it at all

Same here - also used Laser/Visa in bars and it didn't effect mine!

Rackstar

Sala wrote: »

I heard this before and in our case it's not true- we have a bit of gambling on one of our accounts and they never mentioned it at all

Was talking to a mortgage advisor recently and he told me that he recently got a mortgage for a guy who had multiple daily transactions to online gambling services.

Slunk

As others have said. You need to save more if your not renting. While we were renting and saving we had total outgoings of around 1500 (rent + savings) and it still wasn't easy even though this should easily cover the mortgage payment