Currently buying/selling a house? How is it going? READ MOD NOTE POST #1

Red Silurian

Paul_Mc1988 wrote: »

Sorry your wrong again. It was Bannasidhe who was refused. My comment was in reply to woody who was not disqualified he just needed a letter. A very simple letter that would take a few minutes out of his mother's day to get signed.

There is no such thing as being overly cautious when it comes to loaning 100s of thousands to people and ensuring you have all angles covered.

I know a couple who have been saving 1500+ per month every year and are looking to borrow about 3 times their combined income, deposit has been ready to go for the last 12 months etc etc

Mortgage refused by every bank they applied to because there was outstanding finance of about €400 from a TV one of them bought 13 years ago on credit and for various reasons it was not paid off until a few weeks ago

The bank is arguing that it's a 12 year default on a loan and because of this they will be doing the same on their mortgage.

That to me is being overly cautious... And very ironic considering what the banks did to the country 13 years ago

L1011

That'll be gone off the CCR a lot quicker than 12 years - 12 months and they should try again - and this is something everyone looking to buy needs to check first basically.

Some people got away with murder (many times €400) in terms of hire purchase, store finance etc that never made it to the old ICB system. The CCR is still less extensive than the private credit systems used in many other countries that would even cover phone bills and the like.

Red Silurian

L1011 wrote: »

That'll be gone off the CCR a lot quicker than 12 years - 12 months and they should try again - and this is something everyone looking to buy needs to check first basically.

Some people got away with murder (many times €400) in terms of hire purchase, store finance etc that never made it to the old ICB system. The CCR is still less extensive than the private credit systems used in many other countries that would even cover phone bills and the like.

It wasn't CCR it was the ICB, apparently it stays on that record for 5 years

My point though is just about the banks being overly cautious

Another example of this is how they consider the entertainment industry to be "high risk" despite firstly that it is picking up and secondly it should be well back in full swing by the time the mortgage gets paid off

Paul_Mc1988

Bannasidhe wrote: »

I agree, and was nagging my friend to instruct broker to make multiple applications but they were both so sure....

Broker is now doing those multiple applications and friend is hoping vendor will be patient.

Bannasidhe you were you tell you friend to instruct the broker and its poor form on his part.

Avant are new to the market and are able to offer the lowest rates by far as they cherrypick their mortgage holders. This cherrypicking means they will have lower default rates going forward and as such will keep them in the position they're in. If they see the slightest blip they don't proceed

Red Silurian

Red Silurian wrote: »

I know a couple who have been saving 1500+ per month every year and are looking to borrow about 3 times their combined income, deposit has been ready to go for the last 12 months etc etc

Mortgage refused by every bank they applied to because there was outstanding finance of about €400 from a TV one of them bought 13 years ago on credit and for various reasons it was not paid off until a few weeks ago

The bank is arguing that it's a 12 year default on a loan and because of this they will be doing the same on their mortgage.

That to me is being overly cautious... And very ironic considering what the banks did to the country 13 years ago

Don't agree with you on much, Red, but I do on this.

They are being overly cautious, putting in place too many hoops, and doing society a disservice. FTB's need help to get on the property ladder.....not stupid blockers put in their way around historic finance or familial gifts, when savings track records and affordability can be demonstrated

I guess its because humans have been taken out of the process, and its all scoring and "computer says no" approaches.

Dodge

[Deleted User] wrote: »

Don't agree with you on much, Red, but I do on this.

They are being overly cautious, putting in place too many hoops, and doing society a disservice. FTB's need help to get on the property ladder.....not stupid blockers put in their way around historic finance or familial gifts, when savings track records and affordability can be demonstrated

I guess its because humans have been taken out of the process, and its all scoring and "computer says no" approaches.

Without being facetious, it was human decisions at banks giving out first time mortgages to all and sundry that caused what you deem to be an over cautious approach

The problem in the housing market here is supply, not banks tightening their lending criteria

I got turned down by a broker because they said the financial institutions they dealt with were tightening up and were using my net income instead of my gross, to work out my 3.5x loan offer. So they "offered" me a silly amount that wouldn't buy anything. Caught me off guard a bit to be honest as, on paper anyway, i figured I'd be a good candidate.


In relation to gifts, I thought I read recently that the rule on gifts was that they can be used towards the deposit, but that 30% of the deposit must come from "earned income"?

After my frustrating broker experience above, I applied for Rebuilding Ireland, and when I mentioned a gift, they immediately said I needed a letter, sent in with my application, that detailed who the gift was from, how much it was for, and stating that it is a gift and is being given to me with no obligation or expectation to repay it.

They never mentioned anything about saying that the gifter didn't want a 'share' in the property, but I would have assumed that when you're going through the rigmarole of buying with the solicitor, you can't just randomly decide to stick another name on the title out of the blue, anyway? And without their name on the paperwork, I'd have thought that no one could have a share in your property? I also assume the lender would notice another name appearing late in the day, and refuse drawdown anyway?


Same Dundalk-based Finance Ireland broker I was chatting to are charging people €250 (refunded on drawdown) from 1st July onwards, too, it seems, to handle your application. Another needless kick.

Jafin

Deleted User wrote: »

I got turned down by a broker because they said the financial institutions they dealt with were tightening up and were using my net income instead of my gross, to work out my 3.5x loan offer. So they "offered" me a silly amount that wouldn't buy anything. Caught me off guard a bit to be honest as, on paper anyway, i figured I'd be a good candidate.


In relation to gifts, I thought I read recently that the rule on gifts was that they can be used towards the deposit, but that 30% of the deposit must come from "earned income"?

After my frustrating broker experience above, I applied for Rebuilding Ireland, and when I mentioned a gift, they immediately said I needed a letter, sent in with my application, that detailed who the gift was from, how much it was for, and stating that it is a gift and is being given to me with no obligation or expectation to repay it.

They never mentioned anything about saying that the gifter didn't want a 'share' in the property, but I would have assumed that when you're going through the rigmarole of buying with the solicitor, you can't just randomly decide to stick another name on the title out of the blue, anyway? And without their name on the paperwork, I'd have thought that no one could have a share in your property? I also assume the lender would notice another name appearing late in the day, and refuse drawdown anyway?


Same Dundalk-based Finance Ireland broker I was chatting to are charging people €250 (refunded on drawdown) from 1st July onwards, too, it seems, to handle your application. Another needless kick.

Having a letter that says there is no obligation to repay the gift is the same as saying that the gifter has no claim on/share in the property. No need to specify both things - just saying there is no obligation to repay it covers both.

Dodge

Dodge wrote: »

Without being facetious, it was human decisions at banks giving out first time mortgages to all and sundry that caused what you deem to be an over cautious approach

The problem in the housing market here is supply, not banks tightening their lending criteria

I don’t disagree, but this ain’t the sensible middle ground

Dodge

You’re making loads of assumptions there. Every lender will look for that letter saying the person who gifted you the money has no claim to the property. It’s that simple. This has been the practice for at least 15-20 years

As for the the ‘rules’ you’ve read about deposit and gifts. They don’t exist. Different lenders have their own criteria. There is no rule

So here's one for ye..

Seller is selling house. Gives it to EA who puts it on the market and bidding war ensues. Nothing outrageous but for the area it's about right. Two top bidders level out around the same price. One bids 1k more than the other and the other calls it a day.

EA then approaches underbidder and says if you can make up part of your offer in cash, and go "sale agreed" for a lesser amount, Seller may consider you to sell to.

Can I ask what the advantage is here? From what I gather, the house is a principle primary residence (ie; the seller's home) so as far as I am aware, there is no tax due? (as far as I am aware, and I'm open to correction here, you pay tax on profits arising from the sale of a house that's not your main home, but you don't pay anything on your home)?

optogirl

Deleted User wrote: »

So here's one for ye..

Seller is selling house. Gives it to EA who puts it on the market and bidding war ensues. Nothing outrageous but for the area it's about right. Two top bidders level out around the same price. One bids 1k more than the other and the other calls it a day.

EA then approaches underbidder and says if you can make up part of your offer in cash, and go "sale agreed" for a lesser amount, Seller may consider you to sell to.

Can I ask what the advantage is here? From what I gather, the house is a principle primary residence (ie; the seller's home) so as far as I am aware, there is no tax due? (as far as I am aware, and I'm open to correction here, you pay tax on profits arising from the sale of a house that's not your main home, but you don't pay anything on your home)?

I would also be interested to hear people's opinions on this one. We have approval via the Rebuilding Ireland Home Loan which means we are capped at 320k and cannot offer one cent above. During a couple of bidding wars friends & relatives told us to ask the vendor if he would take additional money in cash but put the sale through at 320 so we could use the council loan. We weren't comfortable with it as it sounds dodgy to me but not actually sure of the legality of it?

TessC

Deleted User wrote: »

I got turned down by a broker because they said the financial institutions they dealt with were tightening up and were using my net income instead of my gross, to work out my 3.5x loan offer. So they "offered" me a silly amount that wouldn't buy anything. Caught me off guard a bit to be honest as, on paper anyway, i figured I'd be a good candidate.

KKV, are you self-employed? Because it sounds like you mean net profit rather than net income.

javaboy

optogirl wrote: »

I would also be interested to hear people's opinions on this one. We have approval via the Rebuilding Ireland Home Loan which means we are capped at 320k and cannot offer one cent above. During a couple of bidding wars friends & relatives told us to ask the vendor if he would take additional money in cash but put the sale through at 320 so we could use the council loan. We weren't comfortable with it as it sounds dodgy to me but not actually sure of the legality of it?

There's underpayment of stamp duty for a start.

Dodge

Dodge wrote: »

You’re making loads of assumptions there. Every lender will look for that letter saying the person who gifted you the money has no claim to the property. It’s that simple. This has been the practice for at least 15-20 years

As for the the ‘rules’ you’ve read about deposit and gifts. They don’t exist. Different lenders have their own criteria. There is no rule

You're posting that as though I don't already know about the gift letter being standard? Are you confusing me with someone else?




And yeah, it seems BoI, Finance Ireland, Rebuilding Ireland and KBC are all expecting that 30% of your deposit is earned income. At least from my experience with chatting to them. Maybe I should have PM'ed this info to you first, to make sure it's worthy of posting in the thread. :rolleyes:

TessC

TessC wrote: »

KKV, are you self-employed? Because it sounds like you mean net profit rather than net income.

Sorry, profit, yes, my apologies. Although they did say income to me, i assume they meant profit. Same thing, really, I suppose.

L1011

Red Silurian wrote: »

It wasn't CCR it was the ICB, apparently it stays on that record for 5 years

My point though is just about the banks being overly cautious

Another example of this is how they consider the entertainment industry to be "high risk" despite firstly that it is picking up and secondly it should be well back in full swing by the time the mortgage gets paid off

Very few finance houses are ICB members, so that's effectively bad luck but again, applying again in a year should work

The entertainment industry has always been considered high risk, it isn't pandemic related.

javaboy

javaboy wrote: »

There's underpayment of stamp duty for a start.

But underpaying stamp duty benefits the buyer, rather than the seller (who seems to be the one putting the wheels in motion to do this)?

optogirl

javaboy wrote: »

There's underpayment of stamp duty for a start.

Yeah - I was surprised that it was said to us once but it actually happened about 5 times in the course of chatting about it with people. It just raised massive alarm bells for me. Why would we want to get ourselves embroiled in something like that and why is that the way people think?

javaboy

Deleted User wrote: »

But underpaying stamp duty benefits the buyer, rather than the seller (who seems to be the one putting the wheels in motion to do this)?

There could be other advantages to the seller or the EA. Maybe it's PPR now but wasn't always and there's partial CGT.
Or the agent doesn't want to disclose the full commission with their company or wants to avoid paying tax on it.
Maybe there's a divorce involved and they're trying to pocket cash without the ex getting it.

Either way, I expect it's illegal for the tax evasion reasons and the buyer and seller are both party to it regardless of who is benefitting.

Dodge

[Deleted User] wrote: »

You're posting that as though I don't already know about the gift letter being standard? Are you confusing me with someone else?

If you know it’s standard why all the questions marks here?

[Deleted User] wrote: »

They never mentioned anything about saying that the gifter didn't want a 'share' in the property, but I would have assumed that when you're going through the rigmarole of buying with the solicitor, you can't just randomly decide to stick another name on the title out of the blue, anyway? And without their name on the paperwork, I'd have thought that no one could have a share in your property? I also assume the lender would notice another name appearing late in the day, and refuse drawdown anyway?

And yeah, it seems BoI, Finance Ireland, Rebuilding Ireland and KBC are all expecting that 30% of your deposit is earned income. At least from my experience with chatting to them. Maybe I should have PM'ed this info to you first, to make sure it's worthy of posting in the thread. :rolleyes:

Again, I’m not trying not to get personal here but you’ve posted about having problems getting a mortgage and yet you seem so sure of these ‘rules’. I was trying to be helpful by offering some insight here

It’s OK if you don’t want to listen to me and of course feel free to ignore me completely . I hope you get the mortgage you want soon though. I’ve no issues with you at all

Red Silurian

optogirl wrote: »

I would also be interested to hear people's opinions on this one. We have approval via the Rebuilding Ireland Home Loan which means we are capped at 320k and cannot offer one cent above. During a couple of bidding wars friends & relatives told us to ask the vendor if he would take additional money in cash but put the sale through at 320 so we could use the council loan. We weren't comfortable with it as it sounds dodgy to me but not actually sure of the legality of it?

I'm not familiar with RIHL but is 320 your maximum loan amount or your maximum buy price? I know if we get a mortgage approval of 360,000 we can realistically bid up to 400,000 because we have 40k saved and every € we save on top of that puts up our max offer amount

TessC

Deleted User wrote: »

Sorry, profit, yes, my apologies. Although they did say income to me, i assume they meant profit. Same thing, really, I suppose.

The terminology definitely gets confusing. Net profit for a self-employed person is equivalent to gross income for PAYE. They're both income before tax. They definitely shouldn't be using your net income for the 3.5x figure if you're self-employed.

Sweet.Science

optogirl wrote: »

I would also be interested to hear people's opinions on this one. We have approval via the Rebuilding Ireland Home Loan which means we are capped at 320k and cannot offer one cent above. During a couple of bidding wars friends & relatives told us to ask the vendor if he would take additional money in cash but put the sale through at 320 so we could use the council loan. We weren't comfortable with it as it sounds dodgy to me but not actually sure of the legality of it?

I would try it in your position . Maybe put the details in a letter to the vendor explaining your situation

However it's a buyers market and they prob won't engage

Best chance of them accepting it would be a house in probate

TessC

TessC wrote: »

The terminology definitely gets confusing. Net profit for a self-employed person is equivalent to gross income for PAYE. They're both income before tax. They definitely shouldn't be using your net income for the 3.5x figure if you're self-employed.

I think that's a bit off.. Perhaps I'm wrong, but I am under the impression that net income and net profit are the same thing, worded differently?


If you give me 100k to paint a picture, and it costs me 20k to do it, I've made 80k. 80k is my net income and net profit, as both are the same number, with different names put on them?


I also was under the impression that Central Bank rules are 3.5* your gross income (ie; before tax), so in theory, after charging you 100k for the painting and spending 20k to paint it, i'd still be getting 350k anyway?

Wandering2021

Offer put in. Heard nothing for 24 hours. We are bidding against another party. Wonder what will happen :S

Dodge

Dodge wrote: »

If you know it’s standard why all the questions marks here?


Again, I’m not trying not to get personal here but you’ve posted about having problems getting a mortgage and yet you seem so sure of these ‘rules’. I was trying to be helpful by offering some insight here

The question marks are more aimed at the different reasons or avenues that the lender is looking at in terms of the gift letter. I know, factually, that a gift letter is required.

It’s OK if you don’t want to listen to me and of course feel free to ignore me completely . I hope you get the mortgage you want soon though. I’ve no issues with you at all

I just felt you came across a bit snide, but it's probably my reading of the post wrongly, though, to be fair. I apologies for being a bit of a dick in return.

TessC

Deleted User wrote: »

I think that's a bit off.. Perhaps I'm wrong, but I am under the impression that net income and net profit are the same thing, worded differently?


If you give me 100k to paint a picture, and it costs me 20k to do it, I've made 80k. 80k is my net income and net profit, as both are the same number, with different names put on them?


I also was under the impression that Central Bank rules are 3.5* your gross income (ie; before tax), so in theory, after charging you 100k for the painting and spending 20k to paint it, i'd still be getting 350k anyway?

As far as I understand it, using your example, 100k is your gross profit. 80k is your net profit (profit less expenses). Tax the 80k and what's left is your net income (profit less expenses and tax). Net profit is used for the 3.5x calculation so you'd get 280k.

Red Silurian

Wandering2021 wrote: »

Offer put in. Heard nothing for 24 hours. We are bidding against another party. Wonder what will happen :S

Relax, sit down and watch some telly and try not to think about it until you get the phone call from the EA

A known tactic of estate agents is to be quiet for a period in order to get some nerves running, if you come across too eager you could find yourself bidding against a ghost bidder so jsut kick back and relax the mind

Wandering2021

Thank you Red! The voice of reason I needed right now

I will be patient!