Did anyone borrow towards mortgage deposit?

Victor

Evil-p wrote: »

With all due respect I completely disagree. My mortgage payments are half of what my rent was. It was impossible to save for a deposit but I was more than able to repay my mortgage.

Sure, but the bank may be on the hook for the full amount, which they don't like.

Colonel Claptrap

I'm fairly shocked how many posters have hidden loans from banks, or support this behaviour. Maybe I'm naive but I thought this madness ended 10 years ago.

Skyrimaddict

Just my opinion on when I bought my first house in 2003.

I had saved around 5% of the LTV and I did borrow the rest plus more for a car. I bought a cheaper car then said my parents gave me the rest. They signed a document and no more was ever said.

In the end it worked out very well as my repayment on everything was still if I remember about 55-65% of my rent at the time. And back then rent was very reasonable.

In all honesty while I can see house prices slow and stop soon, I don't see rent dropping by 30% anytime soon. Your numbers above suggest you will be about this much better off

tedpan

Colonel Claptrap wrote:

I'm fairly shocked how many posters have hidden loans from banks, or support this behaviour. Maybe I'm naive but I thought this madness ended 10 years ago.

Unfortunately a bit naive.. The majority of people at work have either had a letter from their parents or had some sort of secret loan. The banks don't care, once they have the deeds, they still own the house until paid. It's not a huge risk for them.

The J Stands for Jay

tedpan wrote: »

Unfortunately a bit naive.. The majority of people at work have either had a letter from their parents or had some sort of secret loan. The banks don't care, once they have the deeds, they still own the house until paid. It's not a huge risk for them.

Bought in 2008 and 2016. Never had any secret loans or mammy letters. Not rich either, just able to manage money like an adult.

tedpan

McGaggs wrote:

Bought in 2008 and 2016. Never had any secret loans or mammy letters. Not rich either, just able to manage money like an adult.

Not many like you around. Most never grow up to adulthood

Manion

deathtocaptcha wrote: »

€1300pm
+ house insurance
+ property tax
+ bins
+ maintenance (i.e. chimney, boiler, guttering, the odd repair or replacement of washing machine / fridge / microwave etc)
+ new furniture cost

There's lots of hidden costs involved with owning a home. Plus there's the risk of house prices dropping significantly, leaving you in negative equity (at some stage) or the risk of losing your job and ending up having to get a job a much further distance away etc...

A lot of that is an argument against buying a property let not against borrowing for a deposit. You could argue that not buying leaves you exposed to potentially being priced out of an area within committing distance to you job. It really depends on personal circumstances.

Colonel Claptrap wrote: »

I'm fairly shocked how many posters have hidden loans from banks, or support this behaviour. Maybe I'm naive but I thought this madness ended 10 years ago.

If you cannot save the deposit don't buy the property might sound like prudent financial advice but it's just the other side of the borrow to hilt mentality. Don't make life decisions based on rules of thumb and intuitively nice sounding things. When we decided to buy a property we did all the sums including stress testing likely life scenarios including changing jobs and interest rate increase. I'd a massive spreadsheet of this. It's fairly straight forward to calculate can you afford the loan repayment. Calculating the total month on month, year on year costs of buying a house is something you should be doing anyway.

Long story short my mortgage repayments are about 65% of what it would cost to Rent a property where I live. My mortgage repayments if anything are coming down due to interest rate competition while rents are steadily increasing. I could not afford to rent where I live now but buying is quiet comfortable.

bleary

Twenty years ago buyers pushed to increase the income multiples from strict 2.5 first income and 1.5 second income.
10 years ago they had moved to 10 times my flatmates income.100% mortgage ,extra loan for fitting out. New tv on credit card and they were talking about getting a new car . When I asked if they could afford the repayments their response was if the bank gives it I must be able to afford it.
That was the reason houses went from 100k to 400 k in ten years. So no ,bank rules are not too strict. They are the only thing stopping eejits inflating prices even more.

__..__

I thought everyone borrowed most of the deposit. An unsaid rule

I don't know anyone personally anyway who didn't.

The J Stands for Jay

bleary wrote: »

Twenty years ago buyers pushed to increase the income multiples from strict 2.5 first income and 1.5 second income.
10 years ago they had moved to 10 times my flatmates income.100% mortgage ,extra loan for fitting out. New tv on credit card and they were talking about getting a new car . When I asked if they could afford the repayments their response was if the bank gives it I must be able to afford it.
That was the reason houses went from 100k to 400 k in ten years. So no ,bank rules are not too strict. They are the only thing stopping eejits inflating prices even more.

To paraphrase Fight Club: we spend money we don't have to buy things we don't need to impress people we don't like.

wally79

bleary wrote: »

Twenty years ago buyers pushed to increase the income multiples from strict 2.5 first income and 1.5 second income.
10 years ago they had moved to 10 times my flatmates income.100% mortgage ,extra loan for fitting out. New tv on credit card and they were talking about getting a new car . When I asked if they could afford the repayments their response was if the bank gives it I must be able to afford it.
That was the reason houses went from 100k to 400 k in ten years. So no ,bank rules are not too strict. They are the only thing stopping eejits inflating prices even more.

Keep the multiples but look at ability to repay I.e. savings each month plus rent rather than a deposit which people with well off parents can bypass

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fg1406

We’ve saved our deposit through hard graft over the past 3 years (and that includes a Dublin rent in the mix) but the bank did go through our finances with a fine tooth comb. I got a cashed an expenses cheque through the credit union where our separate savings accounts are and they questioned even that. I couldn’t even entertain the concept of lying to them about my deposit had I borrowed for it.

budhabob

We bought 2 years ago in Dublin. It was a reasonably quick decision as we were in a lovely house renting for 4 years, and all of a sudden asked to move out - so that was the incentive, along with sky high rents to jump. We had decent savings, but the new rules increased the requirement, so we got a "gift" which we are now paying back over 5 years. While renting we were saving a lot per month, and paying sky high rents. Now that we own, we're paying the mortgage and repaying the "gift" so our outgoings are greatly reduced. To say people shouldn't borrow without knowing the full circumstances is madness.