reasonable requirement?

macJc

Myself and my partner have recently been looking into getting a mortgage. We delicated ourselves to saving towards a mortgage for the last few years and saved everything we could. Cleared our car loans. Never buy any luxury items, never go on holidays etc. We are in a pretty good position fanancially with a more than required deposit. Looking at what we can easily and comfortably afford is good.
Were the down fall for us is the fact We have 3 kids. This seemingly drastically drops the monthly figure you can afford to repay comfortably. Basically, I find this way of calculation extremely unfair and the fact we have children is all the more reason we worked so hard to have our own home, but this is looking unlikely now despite our savings etc as u wouldnt buy a site for the amount they say we can comfortably repay, never mind a house. I find this unfair as any young childless couple taking out a mortgage, will in most cases end up having theyre own children aswell sometime over the period of there mortgage.

Have the banks not thought this through or am i missing out on something here?

brendan86

macJc wrote: »

Myself and my partner have recently been looking into getting a mortgage. We delicated ourselves to saving towards a mortgage for the last few years and saved everything we could. Cleared our car loans. Never buy any luxury items, never go on holidays etc. We are in a pretty good position fanancially with a more than required deposit. Looking at what we can easily and comfortably afford is good.
Were the down fall for us is the fact We have 3 kids. This seemingly drastically drops the monthly figure you can afford to repay comfortably. Basically, I find this way of calculation extremely unfair and the fact we have children is all the more reason we worked so hard to have our own home, but this is looking unlikely now despite our savings etc as u wouldnt buy a site for the amount they say we can comfortably repay, never mind a house. I find this unfair as any young childless couple taking out a mortgage, will in most cases end up having theyre own children aswell sometime over the period of there mortgage.

Have the banks not thought this through or am i missing out on something here?

I may be shot down very quick here but why do you have to tell them you have 3 children? Why not only declare 1?

How would they find out? Maybe there's a trail of child allowance?

Jim2007

macJc wrote: »

Have the banks not thought this through or am i missing out on something here?

Is up to the bank to ensure that you have the ability to meet your commitments, it does not matter about others because they are not the ones paying your mortgage. So yes of course they need to consider your responsibility towards you children.

The rules applied by the banks are either legal requirements or based on their general experience in similar cases. You should also keep in mind that rates are probably at their lowest point right now, if the rates were to double or treble over the next 10 years would be able to handle it?

I know everyone likes to own their own home, but if you are having difficulty reaching the required levels, I'd advise extreme causing, because you are exposing your family to financial risk beyond the norm and that has not gone so well for most families.

macJc

Jim2007 wrote: »

Is up to the bank to ensure that you have the ability to meet your commitments, it does not matter about others because they are not the ones paying your mortgage. So yes of course they need to consider your responsibility towards you children.

The rules applied by the banks are either legal requirements or based on their general experience in similar cases. You should also keep in mind that rates are probably at their lowest point right now, if the rates were to double or treble over the next 10 years would be able to handle it?

I know everyone likes to own their own home, but if you are having difficulty reaching the required levels, I'd advise extreme causing, because you are exposing your family to financial risk beyond the norm and that has not gone so well for most families.

Thanks for your reply. You make some good points about other families stretching themselves beyond the norm. And i definately never want us to end up in any situation like that. I dont want to pay any thing beyond 30/35 percent of our current income, even when taking into consideration the stress test. The mortgage we require isnt massive. 145,000 possibly, we have savings and gifted for the rest of the cost. The thing is though we are well over and beyond the requirements at the moment, after payin childcare fees (which we wont be after this year, as they be in school and i work around school hours) we have prefect rent payments (that would be more then mortgage repayments, with the current interest rates) and saving the same amount we pay on rent on a monthly basis, and have money left in our accounts at the end of every month.

I understand they take children into account for ability to repay, but i feel we have shown we have the ability as we have demonstrated this over a 5 year period.
I just feel we will never have a chance to own our own property no matter how hard we try 🙄

Trish56

Lenders require a married couple to have approx. €2100 plus €250 per dependent (net disposable income) left over after stressed repayments and childcare and any short term loan repayments. Please don't make an application and leave out your dependents as bank will pick up your children's allowance on your bank statements. You could however since you wont be paying it from next year pay your childcare by cash and apply after 6 months. How much you qualify for will depend on your joint income and based on net disposable income above which with 3 dependents would be €2850.

You mentioned partner rather than husband so if you're not married can the higher earner not apply for a mortgage in his/her name.

macJc wrote: »

Thanks for your reply. You make some good points about other families stretching themselves beyond the norm. And i definately never want us to end up in any situation like that. I dont want to pay any thing beyond 30/35 percent of our current income, even when taking into consideration the stress test. The mortgage we require isnt massive. 145,000 possibly, we have savings and gifted for the rest of the cost. The thing is though we are well over and beyond the requirements at the moment, after payin childcare fees (which we wont be after this year, as they be in school and i work around school hours) we have prefect rent payments (that would be more then mortgage repayments, with the current interest rates) and saving the same amount we pay on rent on a monthly basis, and have money left in our accounts at the end of every month.

I understand they take children into account for ability to repay, but i feel we have shown we have the ability as we have demonstrated this over a 5 year period.
I just feel we will never have a chance to own our own property no matter how hard we try ��

Lux23

Maybe you need to wait until they are all in school because the creche/baby minder fees might take a bit chunk out of your ability to pay.

Duncanwooly

Could you not save for another year, and then you'll be in a better position. Out of curiosity, have the bank told you what they will lend you ? One or two of the credit unions also do mortgages, have you looked at one of them ?