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Exemption from deposit rules.

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  • 31-10-2016 10:35pm
    #1
    Lord Trollington
    Registered Users Posts: 4,412 ✭✭✭


    Hi All, what is the criteria which the banks take into consideration when making people exempt from the central bank deposit rules?


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    #2
    morrga
    Registered Users Posts: 553 ✭✭✭morrga


    Lord Trollington wrote: »
    Hi All, what is the criteria which the banks take into consideration when making people exempt from the central bank deposit rules?

    Salary and repayment ability of the higher mortgage.


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    #3
    con1982
    Registered Users Posts: 515 ✭✭✭con1982


    One banked offered us 4 times salary. We are in the 70-80 loan to value range and the mortgage would be less than our current rent


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    #4
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    con1982 wrote: »
    One banked offered us 4 times salary. We are in the 70-80 loan to value range and the mortgage would be less than our current rent

    OP is asking about deposit exemption not 3.5x salary exemption


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    #5
    Balmed Out
    Registered Users Posts: 4,716 ✭✭✭Balmed Out


    I imagine one would be the expectation of large future increases to salary like a junior doctor.


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    #6
    Mellor
    Registered Users Posts: 39,353 ✭✭✭✭Mellor


    Balmed Out wrote: »
    I imagine one would be the expectation of large future increases to salary like a junior doctor.
    That would help with borrowing >3.5x salary. But it doesn't really improve the situation with deposit. The banks are trying to avoid the risk with LTV ratios that are too high, which is slightly different.


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    #7
    Alter_Ego
    Registered Users Posts: 196 ✭✭Alter_Ego


    If you're a FTB, it is possible to get an exemption from the 20% over 220,000 requirement and instead just apply for 10% flat deposit on the whole amount as an exception, for example €40,000 deposit on €400,000 house.

    I don't think any bank will go below the 10% deposit requirement.

    If you're a FTB and buying a new build (good luck finding one) you can qualify for the government grant which will give you up to 5% tax return as a "cashback". So in the example above you could go for €20,000 deposit, €20,000 "cashback" instead, effectively making this a 95% mortgage.

    I am not sure what the situation is for non-FTB, I presume in some cases you could obtain an exemption from the 20% deposit requirement, but again you'll be expected to have at minimum 10% deposit saved in that case.

    I am sure some mortgage brokers around here can shed some light on it and correct my post if it's inaccurate.


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    #8
    apeking
    Registered Users Posts: 492 ✭✭apeking


    We got an exemption on the LTV to 10% with Ulster Bank, 2nd time buyers


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    #9
    Ayuntamiento
    Registered Users Posts: 346 ✭✭Ayuntamiento


    Balmed Out wrote: »
    I imagine one would be the expectation of large future increases to salary like a junior doctor.

    I can speak from experience in saying that that is definitely not a guarantee! Banks show very little interest in 'potential' future salaries. It's not built into their calculations, and rightly so. Most of them are even slow to take into account the guaranteed overtime that is built into a doctor's salary despite it being current and demonstrable income.

    I've heard that they tend to grant exemptions to those customers who already have high levels of disposable income. Essentially it's used as something to draw in the high earners who will have their pick of loan offers from different banks. They have little interest in giving them to customers who need them the most at the bottom end of the income scales.


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    #10
    HamsterFace
    Closed Accounts Posts: 832 ✭✭✭HamsterFace


    apeking wrote:
    We got an exemption on the LTV to 10% with Ulster Bank, 2nd time buyers


    What was the criteria if you don't mind me asking?

    Myself and my girlfriend are both in well paid public service jobs so I'm hoping this might help us to get an exemption and maybe only be required to have 10% of the house price


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    #11
    Innervision
    Registered Users Posts: 482 ✭✭Innervision


    We were granted a deposit exemption on the basis that we had quite a bit to spare on the 3.5 times LTI criteria, so if you've some leeway there that might help.


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    #12
    Utah
    Closed Accounts Posts: 426 ✭✭Utah


    Innervision wrote: »
    We were granted a deposit exemption on the basis that we had quite a bit to spare on the 3.5 times LTI criteria, so if you've some leeway there that might help.

    We were the same I think.
    We were never actually told why we qualified for the LTV exemption


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    #13
    apeking
    Registered Users Posts: 492 ✭✭apeking


    HamsterFace wrote: »
    What was the criteria if you don't mind me asking?

    Myself and my girlfriend are both in well paid public service jobs so I'm hoping this might help us to get an exemption and maybe only be required to have 10% of the house price

    Not sure what the criteria was but in our case we could show repayment capacity of €1k more than the mortgage repayments were going to be which stood in our favour.


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    #14
    Sebastian Dangerfield
    Registered Users Posts: 1,816 ✭✭✭Sebastian Dangerfield


    We recently got approved for a flat 10% with PTSB. Not sure what criteria that was based on, I assume × earnings. My advise is to speak to a broker, ours spoke with the banks first to find out if it was a runner, and one in particular encouraged us to proceed


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    #15
    Brego888
    Registered Users Posts: 1,321 ✭✭✭Brego888


    People think the banks are doing them a great favour in giving a deposit exemption when in reality that means taking out a bigger mortgage which makes the bank more money and is more expense for the mortgage holder.


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    #16
    Ayuntamiento
    Registered Users Posts: 346 ✭✭Ayuntamiento


    Brego888 wrote: »
    People think the banks are doing them a great favour in giving a deposit exemption when in reality that means taking out a bigger mortgage which makes the bank more money and is more expense for the mortgage holder.

    Wow I never thought about that....:rolleyes: :D:D

    I doubt there's too many remaining at this time of the year unfortunately.


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    #17
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Brego888 wrote: »
    People think the banks are doing them a great favour in giving a deposit exemption when in reality that means taking out a bigger mortgage which makes the bank more money and is more expense for the mortgage holder.

    In general, an exemption is given to a higher earner who has spare capacity in qualifying for the 3.5 LTI. It's more a case of someone buying a 300k property with 30k deposit when they have an income of 100k rather than someone at the lower end overextending themselves.


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    #18
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #19
    Rew
    Moderators, Sports Moderators Posts: 8,679 Mod ✭✭✭✭Rew


    We got one, no existing debt, rent is equivalent to the mortgage and strong savings record. That said they want us to most of our own cash still not just 10% meaning that if we go ahead it mould be a 16% or more deposit.


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    #20
    Sebastian Dangerfield
    Registered Users Posts: 1,816 ✭✭✭Sebastian Dangerfield


    Brego888 wrote: »
    People think the banks are doing them a great favour in giving a deposit exemption when in reality that means taking out a bigger mortgage which makes the bank more money and is more expense for the mortgage holder.

    Fine with me - I wanted to get my house sorted and avoid another years rent and 12 months spiralling house prices, so I understand there is a cost to that


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    #21
    Utah
    Closed Accounts Posts: 426 ✭✭Utah


    Sebastian Dangerfield wrote: »
    Fine with me - I wanted to get my house sorted and avoid another years rent and 12 months spiralling house prices, so I understand there is a cost to that

    Also fine with me. I understand we will have to pay more back but the perfect house was available at the right time for our circumstances


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    #22
    Ayuntamiento
    Registered Users Posts: 346 ✭✭Ayuntamiento


    Utah wrote: »
    Also fine with me. I understand we will have to pay more back but the perfect house was available at the right time for our circumstances

    Considering it's a debt that's taken out over 35yrs+ I wouldn't be getting too worked up over an extra €20-50k on the overall amount.
    In fact, if you can borrow the exact amount that you need for a long-term home, you'll save yourself all the costs associated with trading up in the future.


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    #23
    Lord Trollington
    Registered Users Posts: 4,412 ✭✭✭Lord Trollington


    Ayuntamiento wrote: »
    Considering it's a debt that's taken out over 35yrs+ I wouldn't be getting too worked up over an extra €20-50k on the overall amount.
    In fact, if you can borrow the exact amount that you need for a long-term home, you'll save yourself all the costs associated with trading up in the future.

    How much are you earning that you can afford to not get worked up about an extra €50k deposit? €50k is a lot of money to hand over in one go - I could put that €50k away for my girls schooling and college future . I could use it to pay their current crèche fees which are €2k a month .

    I could use it for a family holiday , he'll I could throw it all on black if I was that way inclined .

    You see I'm buying a family home with absolutely no thoughts and trading up or down in future . It's a home for me my wife and kids, not an investment to make a quick buck . Been renting the last 10 years now since I moved out of home when I was 20 I want a home now I feel.


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    #24
    Ayuntamiento
    Registered Users Posts: 346 ✭✭Ayuntamiento


    Lord Trollington wrote: »
    How much are you earning that you can afford to not get worked up about an extra €50k deposit? €50k is a lot of money to hand over in one go - I could put that €50k away for my girls schooling and college future . I could use it to pay their current crèche fees which are €2k a month .

    I could use it for a family holiday , he'll I could throw it all on black if I was that way inclined .

    You see I'm buying a family home with absolutely no thoughts and trading up or down in future . It's a home for me my wife and kids, not an investment to make a quick buck . Been renting the last 10 years now since I moved out of home when I was 20 I want a home now I feel.

    What I meant is that if the bank give you a deposit exemption then you might suddenly have an extra 50k to spend on a property. That extra 50k would only equate to 5k in terms of the deposit you'd need to put up.
    If that 50k was the difference between buying a house that will tide you over for the next few years versus buying a forever home that you'll never have to leave, then it's well worth it.


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