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10% deposit "not enough"

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  • 06-08-2017 9:55pm
    #1
    schmig
    Registered Users Posts: 22 ✭


    Hi,

    Just fishing for opinions/whether anyone else has experienced this?

    - Have made mortgage application for place am sale agreed on.
    - Bank pushing me for several years to take a mortgage.
    - Combined earnings with partner comfortably within threshold.
    - We are first time buyers, and have the 10% deposit saved.

    Very surprised to be told by loan manager, "they (underwriters) will not be happy with, you should show quite a bit more money for your loan to be successful". They're looking for more like a 13% deposit. House is not in Leinster and is relatively modest in price.

    Any opinions?


Comments

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    #2
    godtabh
    Moderators, Science, Health & Environment Moderators Posts: 23,218 Mod ✭✭✭✭godtabh


    Do what they say or go else where. Simple really


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    #3
    traveller0101
    Registered Users Posts: 122 ✭✭traveller0101


    I think they want to see more than 10% because there are other things to pay for like stamp duty, solicitors fee etc.. so you NEED more than 10% of the property value when purchasing a house


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    #4
    LirW
    Registered Users Posts: 4,825 ✭✭✭LirW


    You need to cover all your legal fees, which are approx 3-5k, depending on the house price.
    Also if you're in a rural area, some banks want to see higher deposits for houses that are rural.


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    #5
    schmig
    Registered Users Posts: 22 ✭schmig


    Cheers all, have the above covered...just curious as to the change of tune .


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    #6
    CIARAN_BOYLE
    Registered Users Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    While there are legal limits saying deposits must be a certain level there is no reason that banks should give all people the best possible loan.

    In this case the bank has decided that you or your partner or your property carry a slight extra risk and are adjusting on that basis.

    Thank you for giving me greater faith in our banking system by sharing your story.


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    The 10% deposit for first time buyers- is a minimum deposit.
    Individual lenders will use it as a yard stick- but will, for underwriting purposes look at other factors.
    So- a 1 bed apartment in a rural local can need up to a 50% deposit.
    A 1 bed apartment in Dublin is generally a 20-25% deposit.
    A 2-3 bed semi in Dublin will tend to be the 10% on the nose.
    A 2-3 bed in a rural area- might be 15%

    Etc. etc

    Its an exercise in risk management for a prospective lender.
    They want to insulate themselves against potential falls in the value of the asset on which the amount they are lending you is secured.

    What you have experienced is standard practice- nothing out of the ordinary.


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