Equity Release

mccartj5

Hi,

Looking to do some home improvements and thought the best way to get capital was to do an equity release on my home.

Contacted my lender, went through the whole calculation process, income, loans, dependents, savings etc. I was surprised when they said that I fell short of the limits by 480 a month, despite being able to save over 600 a month at the moment.

I was looking to borrow 30k and for calculations sake I would pay it back over the remainder of the mortgage which is 26 years. That would make the monthly repayments very low. As mentioned being able to save over 600 a month would have meant I easily meet the criteria. It sounds like a computer says no answer I was given.

Basically my question is, does that sound right? And is it worth my while getting back onto my lender and looking to speak to someone higher up or would I be wasting my time?

Trish56

You have to qualify for a mortgage under the lenders policy and criteria. Looks like you're failing under NDI = net disposable income. After stressed mortgage repayments and any other loan repayments and childcare you need to have €2050 per couple plus €250 per child net income per month.

mccartj5

Thanks Thrish56,

Seems a bit crazy given that I can clearly pay the existing mortgage and have been for many years. It's not like this is a second mortgage, it will replace the existing one and increase slightly (if at all as the interest rate is likely to reduce) so I can't understand why I would need so much disposable income.

That's banks I guess, they're either throwing money and every Tom, Dick and Harry or making the ones who can afford it bend over backwards. Not much has changed

mel.b

Trish56 wrote: »

You have to qualify for a mortgage under the lenders policy and criteria. Looks like you're failing under NDI = net disposable income. After stressed mortgage repayments and any other loan repayments and childcare you need to have €2050 per couple plus €250 per child net income per month.

Trish, do you know with AIB what their stress rate is and what the NDI is for a single person? I'm also looking at the possibility of an equity release for home improvements later in the year. Do you have to take out the equity release for the same length of time that remains on your mortgage, or can it be for a shorter period?

mccartj5

mel.b wrote: »

Trish, do you know with AIB what their stress rate is and what the NDI is for a single person? I'm also looking at the possibility of an equity release for home improvements later in the year. Do you have to take out the equity release for the same length of time that remains on your mortgage, or can it be for a shorter period?

It can be between 5 and 30 years I believe, don't know about AIB's stress test but I'm sure it is also ridiculous

Trish56

Hi Mel, AIB stress rate is 5.15% and NDI for a single person is €1400. As far as I'm aware you can take out an equity release loan for a shorter period than what's outstanding on your mortgage.

mel.b wrote: »

Trish, do you know with AIB what their stress rate is and what the NDI is for a single person? I'm also looking at the possibility of an equity release for home improvements later in the year. Do you have to take out the equity release for the same length of time that remains on your mortgage, or can it be for a shorter period?

mel.b

Trish56 wrote: »

Hi Mel, AIB stress rate is 5.15% and NDI for a single person is €1400. As far as I'm aware you can take out an equity release loan for a shorter period than what's outstanding on your mortgage.

Thanks Trish that is helpful. One more question - do they calculate the stressed rate off your remaining balance and years, or from the original amount taken out and original years?

Trish56

Calculations would be done on the balance and term o/s.

mel.b wrote: »

Thanks Trish that is helpful. One more question - do they calculate the stressed rate off your remaining balance and years, or from the original amount taken out and original years?

Noodles81

Hi I'm looking to release equity too for home improvements. However I'm on sick leave at the minute due to a chronic disease, would I be eligible and if so would I even get new mortgage protection insurance? I've about 80,000 in equity and I'm in a permanent state job. My partner is not on the mortgage. Could he be put on the new refinanced one?

Sorry for highjacking your post OP.