First time mortgage application & property advice

0gac3yjefb5sv7

I have to disagree here. 80k is definitely not a common salary - maybe when you are in your 40s/50s but the majority I guess would earn between 20-40k. I don't know many jobs that you can earn 80k without 10/20 year's experience.

deisedays

apologies
Wrong end of the stick by me!
I suppose what's happening is when few properties are for sale folks with this earning capacity will have first pick on property.
By the way I think that there is something radically wrong if Mr John and Joan Soap on average wages can't afford to buy a house but must rent.
Surely we know enough of our history to recognise the damage caused by landlordism in this country. Do we want to repeat the mistakes of the past and have the majority of peasants rack rented by the gentry for life?

SarahMollie

Pheonix10 wrote: »

I have to disagree here. 80k is definitely not a common salary - maybe when you are in your 40s/50s but the majority I guess would earn between 20-40k. I don't know many jobs that you can earn 80k without 10/20 year's experience.

I think its all a matter of your own experience. It wouldn't be unusual in my social circle. Including bonus, I earn more than that, and I'm still a little shy of my 30th birthday.

I'd go so far as to say that anything less than €40k would be considered very low. I'd estimate salaries in my group of friends range from €50/90k, so some couples can definitely get approved for big mortgages.

SarahMollie

I know its difficult for Irish people to adjust to the idea of long term renting, but maybe thats the way forward for a lot of people. Its ingrained into the Irish mindset that buying a home is a rite of passage, but why? If you look to France/Germany, people rent their whole lives and its normal.

I accept we'd need a radical overhaul of the rental market for this to happen, including sensible rent levels, professional landlords, security for tenants etc.

Despite how a lot of people feel, its not an automatic right to be able to buy a house.

**accepts hypocrisy of being both Irish and a home owner while writing the above**

Elessar

SarahMollie wrote: »

I think its all a matter of your own experience. It wouldn't be unusual in my social circle. Including bonus, I earn more than that, and I'm still a little shy of my 30th birthday.

I'd go so far as to say that anything less than €40k would be considered very low. I'd estimate salaries in my group of friends range from €50/90k, so some couples can definitely get approved for big mortgages.

Exactly. Depends on industry of course but someone with skills and experience can earn those figures quite easily. A friend of mine recently started a new job at 85k, he's 32 with 6 years experience in his field (also certified) - this is IT. Companies were almost throwing money at him to sign.

SarahMollie

Elessar wrote: »

Exactly. Depends on industry of course but someone with skills and experience can earn those figures quite easily. A friend of mine recently started a new job at 85k, he's 32 with 6 years experience in his field (also certified) - this is IT. Companies were almost throwing money at him to sign.

Yeah I work for an IT company (not technical, but I have a masters degree and am well qualified for what I do), my OH is an Engineer, educated to PhD level, and works in renewable energy.

I realize that doesn't make us John+Jane Bloggs, but we're hardly unicorns either.

SarahMollie

SarahMollie wrote: »

I think its all a matter of your own experience. It wouldn't be unusual in my social circle. Including bonus, I earn more than that, and I'm still a little shy of my 30th birthday. ........

No doubt, however one can surely recognise that only a minority of people in their late 20s earn salaries in excess of €80k/annum. I'm fully accepting it might well be the norm in your social circle.

Some stats grabbed from NERI on households.

33% of households have a gross income of less than €27,000
62% of households have a gross income of less than €50,000
The top 20% of households have a gross income of more than €80,000 per annum
12% of household have a gross income above €100,000 per annum

The above includes workers, pensioners, the unemployed etc. as far as I know.

Every household isn't going to be able to afford to own the house they live in - renting, social & council housing etc. will all be required to house the nation.

SarahMollie

Augeo wrote: »

No doubt, however one can surely recognise that only a minority of people in their late 20s earn salaries in excess of €80k/annum. I'm fully accepting it might well be the norm in your social circle.

Yep, can absolutely accept I'm doing well, but I think some of the estimates given by previous posters on the lower end of the scale sound extremely low. Obviously people earn maybe €25/30k starting out, but once you've 5+ years experience, I would think you'd need to be seeing your income rise in that period.

SarahMollie

Deleted User wrote: »

Some stats grabbed from NERI on households.

33% of households have a gross income of less than €27,000
62% of households have a gross income of less than €50,000
The top 20% of households have a gross income of more than €80,000 per annum
12% of household have a gross income above €100,000 per annum

The above includes workers, pensioners, the unemployed etc. as far as I know.

Every household isn't going to be able to afford to own the house they live in - renting, social & council housing etc. will all be required to house the nation.

Wow, actually thats shocking. Yes I can definitely see how a lot of people will never afford to own if this is the case - you couldn't afford to save for the deposit by the looks of things.

I guess it goes to show the extent of the divide between Dublin and the rest of the country, because even €50k for a household in Dublin would be very low in my opinion, and you certainly wouldn't be buying property.

0gac3yjefb5sv7

25/30k is not extremely low. It's quite normal for many service level jobs, barmen, waiters, hairdressers, secretary's. Obviously you are in the minority. After 5 years experience in most jobs it might rise to 40-50k but definitely not up to 80k in most roles.

omb0wyn5ehpij9

SarahMollie wrote: »

Yep, can absolutely accept I'm doing well, but I think some of the estimates given by previous posters on the lower end of the scale sound extremely low. Obviously people earn maybe €25/30k starting out, but once you've 5+ years experience, I would think you'd need to be seeing your income rise in that period.

As far as I can remember, for 2014 the average salary was 35k and the median was 29k. Not sure of the 2015 figures, but compare that to the price of property and people will have no hope of ever buying

SarahMollie

SarahMollie wrote: »

Yep, can absolutely accept I'm doing well, but I think some of the estimates given by previous posters on the lower end of the scale sound extremely low. Obviously people earn maybe €25/30k starting out, but once you've 5+ years experience, I would think you'd need to be seeing your income rise in that period.

The estimates aren't necessarily low - everyone has a different experience and extrapolates from that.
Your post is based on assumptions.

SarahMollie

BDJW wrote: »

As far as I can remember, for 2014 the average salary was 35k and the median was 29k. Not sure of the 2015 figures, but compare that to the price of property and people will have no hope of ever buying

Yeah well depends on where you live I suppose. OP earns below this but his numbers add up from a cursory glance, but thats based on the cost of living in Sligo.

Definitely true to say you wouldn't be buying much in Dublin on those numbers.

SarahMollie

SarahMollie wrote: »

Yep, can absolutely accept I'm doing well, but I think some of the estimates given by previous posters on the lower end of the scale sound extremely low. Obviously people earn maybe €25/30k starting out, but once you've 5+ years experience, I would think you'd need to be seeing your income rise in that period.

Again that makes sense for those in careers who progress. There are loads and loads of people who go through their working life in roles where experience doesn't equate to their salary increasing beyond inflation.

Santy2015

My salary and my OH salary add up to 43k in north county cork. We are well within our means and save 1600 a month. We can afford to get a house but obviously if we were on that salary living in cork city you'd struggle to find anything at all and especially not Dublin or the commuter counties Kildare Wicklow Meath. We are lucky that house prices i. Our area are steady but would be screwed of we lived in a city. I work in retail and she works in childcare. Not the best paying jobs but I'm on some sort of salary scale but it'll never go above 40k of imagine

deisedays

Are peeps here talking about gross salaries (I.e. Before tax) or take home pay?

Santy2015

Before tax, that's how they calculate how much you can borrow. 3.5 times gross salary

athtrasna

Mod note

Folks this is Accommodation and Property, not who gets paid how much and what average earnings are. There's a work and jobs forum if you want to discuss such things.

SarahMollie

S.M.H wrote: »

Hi all. I'm a 28 year old male in the North West of Ireland on an income of 27k per annum and the (idea of the) buying bug has hit me in. I hope to apply for a first mortgage in the next 6 months so this could be an interesting journey....

Financial Background:
I've spent about 6/8 months bumping up finances the CA and the past 10 weeks I've set up a DD of €200 per week to go from my CA to Savings. In those 10 weeks I've obviously saved €2,000 but my CA capital has also risen €1,000 in the same period - hopefully proving that my day to day CA shouldn't be affected if I continue to pump €200 per week into a mortgage (even if it's unlikely I'd commit to such high repayments)
I've no credit cards, never had an overdraft, never been in debt and no dependents.
Essentially I have followed advice directed toward FTBs thus far.

Bottom line, I have saved close to €10,000 (8k in CA / 2k in savings - regular payments)

What property I'm seeking?:
An apartment or house in or after the 60/100k mark. I'm also open minded to entering the rental property market while occupying the property. Most likely purchasing in Sligo.

Other factors:
I've a permanent position for over a year in an established company and expect my wage to increase. My debt free next of kin could be a guarantor on any mortgage I go for.
A mortgage of €80,000 over 25/30 years is fine by me

---

1- Based on the above how far away would I be from securing a mortgage for say €80,000.
2- Which lender is favorable for first time buyers?
3- Is the 10% deposit guidelines for FTBs something lenders will stand by/honour based on what you know?
4- What hidden aspects of mortgage application should I be looking out for from lenders?
5- Anything else?

Thanks in advance

OK so getting back on track.

As someone who's bought in the past 6 months, this is my take.

I don't see any issue with you getting the mortgage you're looking for. The only thing is that they might ask you to demonstrate savings for a little bit longer, but I don't think it would prevent a preapproval.

Obviously shop around (maybe use a broker?). Honestly word of mouth was huge for me in who I ultimately worked with.

I'd transfer most of the money into your savings account, and only keep a running balance in your current account. I think they look at this as more sensible (which it is, as you don't earn any interest on current account, and also the money is just safer in savings). You need to demonstrate that every month you are saving enough to cover repayments when stress tested (I'd say market rate +2%) so work out what this is and put this aside every month.

You will need to save a bit longer, because you don't only have to have your deposit in cash, but you also need to have legal fees, valuation costs, survey if required and stamp duty, and you need to show that after paying for all this, you can still afford to live. Another few months should be ok. You will definitely need the 10% deposit. I've heard of banks giving exceptions based on upping the 3.5 times income, but never accepting a lower deposit.


I didnt find many "hidden aspects" to my mortgage, there was nothing in there i didnt expect. You will obviously be expected to maintain mortgage protection insurance, but this can be quite low on a monthly basis, and for €80k, probably negligible.

After all is said and done, i did end up spending more than I'd anticipated, but it wasnt anything to do with my mortgage. You'd arguable be wise to have significant savings to cover moving in, as the list of things you'll need to have is extensive.

Do you have any of the following? Or would you need to buy everything new? Could you borrow/take second hand from friends/family?

Bed(s) and bedding
TV
Sofa
Dining Table
Kitchen ware and utensils
Pots and pans
Kettle/Toaster/Microwave
Hoover
Curtains (I still don't even have all my curtains!)

Buying all of the above can easily add up!

The way (I hope) it will work out for me is that I've now bought all of these things and taken the hit on the upfront costs, so that from now on my monthly outgoings will be less than when i was renting. But make no mistake, the last few months have been very expensive!

Naid23

Had a meeting with the bank on Saturday to discuss our options and we were hoping to get our approval in principal. Bit of an unforeseen issue was my partners age meaning we could only get a 30 year mortgage which was grand as we would easily make the higher payments.
What i wasnt expecting was that we required a higher deposit then we anticipated as we would have to take a shorter term time.

Has anyone ever heard of this before? Its about 3K more then we were assuming we need under the new rules, which will put us like 2 months behind.

Jen44

I don't understand why a shorter term would affect your deposit? is it because you are borrowing more money then you originally intended? I suppose what im asking is, is it that the percentage deposit is till the same 10% or the 20% if ye are movers and that you now have to borrow more money then you intended? I may be being stupid here but I cant figure out why your deposit would change?

Naid23

Jen44 wrote: »

I don't understand why a shorter term would affect your deposit? is it because you are borrowing more money then you originally intended? I suppose what im asking is, is it that the percentage deposit is till the same 10% or the 20% if ye are movers and that you now have to borrow more money then you intended? I may be being stupid here but I cant figure out why your deposit would change?

I honestly dont understand it either. We got the quote based on the max we want to borrow for a house which is 275k and we are first time buyers so we worked it out as 33K deposit required but we were told we would need 35K.
She also quoted us for a price of 250k - deposit would be 30k which is again 2k over the new rules.

The way she phased it was that because of the shorter term =higher deposit. Never heard of it before so doesnt make a whole lot of sense.

Jen44

never heard that before.

john the one

So i have been given a closing date for the house to swap hands, does it usually happen on the day or is the possibility that it will happen before or after?

SarahMollie

john the one wrote: »

So i have been given a closing date for the house to swap hands, does it usually happen on the day or is the possibility that it will happen before or after?

I wouldnt hold this as gospel. Is this the first date you've seen after contracts have been exchanged. Back in July I was given a date of the 7th of September, but due to things being missing, solicitors going back and forth, additional information sought by the bank etc, we didnt actually close until late October.

I was given a few other suggested closing dates during the interim, but I'd say that until contracts are signed and mortgage is drawn down, any date they give is just a guess.

Once you've advanced that far in the process, they should be accurate enough, but I'd still imagine it could always slip by a few days.

Parchment

SarahMollie wrote: »

Yep, can absolutely accept I'm doing well, but I think some of the estimates given by previous posters on the lower end of the scale sound extremely low. Obviously people earn maybe €25/30k starting out, but once you've 5+ years experience, I would think you'd need to be seeing your income rise in that period.

Wow. snotty much? "extremely low" happens to be my income.