Saving/Applying for a mortgage 2020-22 Edition

markodaly

markodaly wrote: »

An odd question maybe, but what is the deal with applying for a mortgage in Ireland but you already have a mortgage abroad?

I guess you are no longer a first-time buyer and will have to stump up the 20% deposit, but are there any other issues? Say couple earning 100k between them, will they still get the 3.5 times loan?

You'll still be subject to the 3.5 limit (or 4.5 with an exemption), but your existing mortgage will be treated as an additional outgoing and factored into your repayment capacity and stress tests. They'll likely want to see a credit report from the country in question too, to make sure there are no issues on your existing loan.

Interested Observer

markodaly wrote: »

An odd question maybe, but what is the deal with applying for a mortgage in Ireland but you already have a mortgage abroad?

I guess you are no longer a first-time buyer and will have to stump up the 20% deposit, but are there any other issues? Say couple earning 100k between them, will they still get the 3.5 times loan?

Correct.

ILikeBoats

I thought someone might find this useful:

We got AIP from PTSB while one still being on probation in a new job. The caveat being draw down can't happen until a letter stating probation has been passed has been presented. This means you'd probably need to get the timing right.
Just thought it was interesting and I'm sure a few would like to know that it can happen.

Emma2019

The issue is never getting AIP while on probation, its drawing down.

ELM327

CIP4 wrote: »

If you get shift allowance in your job and work all year round on shift do the bank count 100% of the shift allowance salary payment for determining how much you can borrow or is it only partially counted ?

partially.
I used to have this , and it was treated the same as bonuses.
I have a base salary and then my bonus and rsu is another 0.4X to 0.7X my base again on top.


Most banks considered the base in full (as per salary certificate) but generally only 1/3 or 2/3 of the overtime, bonus etc

CalisGirl

markodaly wrote: »

An odd question maybe, but what is the deal with applying for a mortgage in Ireland but you already have a mortgage abroad?

I guess you are no longer a first-time buyer and will have to stump up the 20% deposit, but are there any other issues? Say couple earning 100k between them, will they still get the 3.5 times loan?

Also if your earnings are in non-Euro, AIB and Haven are the only banks that will lend. Your annual income will also be reduced by 20% to factor in exchange rate movements. You'll still get 3.5 times the reduced annual income amount. And most likely one of the conditions of the AIP will be that your non Irish income being used for the deposit will need to be in an Irish Bank account.

So I was dealing with a broker who came back to me today with an amount they'd formally offer me.

From what I gather, from the brief phone call, the banks they're dealing with are being cautious and now only offering 3.5 times your net income (whereas central bank rules would be working off gross income).

I wasn't sure if I was interpreting the phone call correctly or not to be honest, but then she gave me the 'best offer' they could secure, and sure enough, it works out about 3.5 times my net income.

Is this just them telling me I'm a financial disaster? Or is it, as she let on, that a lot of banks are now tightening up and swapping to calculating by net income? Seems a needless kick.

Rebuilding Ireland, here I come

tobsey

[Deleted User] wrote: »

So I was dealing with a broker who came back to me today with an amount they'd formally offer me.

From what I gather, from the brief phone call, the banks they're dealing with are being cautious and now only offering 3.5 times your net income (whereas central bank rules would be working off gross income).

I wasn't sure if I was interpreting the phone call correctly or not to be honest, but then she gave me the 'best offer' they could secure, and sure enough, it works out about 3.5 times my net income.

Is this just them telling me I'm a financial disaster? Or is it, as she let on, that a lot of banks are now tightening up and swapping to calculating by net income? Seems a needless kick.

Rebuilding Ireland, here I come

The banks’ primary concern when issuing mortgage approval is your ability to repay. They decide what they think you can afford. The upper limit of that is the Central Bank rules. So if the bank think you can afford 4x your gross salary they’ll only offer you 3.5x. They may offer you less than 3.5x if they think your existing commitments are too high to afford more than that.

Do you have kids and childcare? Or existing loans or HP agreements you have to pay? That will limit you. My wife and I have 4 kids and we haven’t ever been offered 3.5x. When my wife was part time that really limited us but now she’s gone full time we can afford to trade up without needing the full 3.5x.

Green Mile

@KKV, that’s not normal.
Peoples net can change based on lot of factors like extra/or reduction in tax credits, medical expense reimbursements, additional voluntary pension contributions, even having a bicycle or bus pass can change your net pay.
I would go to another broker if I got that phone call, you shouldn’t be treated differently than everyone else.

Paul_Mc1988

Green Mile wrote: »

@KKV, that’s not normal.
Peoples net can change based on lot of factors like extra/or reduction in tax credits, medical expense reimbursements, additional voluntary pension contributions, even having a bicycle or bus pass can change your net pay.
I would go to another broker if I got that phone call, you shouldn’t be treated differently than everyone else.

Yes they should and quite frankly everyone should as we all have different circumstances. They could have defaulted on a loan and have 8 kids for all you know and be a single parent. Your post has no factual merit.

Emma2019

3.5 net income isnt par for the course though.

If you've a decent savings pattern and excess income and no big loan commitments/kids then 3.5 gross is the standard.

But it all comes down to your personal circumstances. 3.5 isnt guaranteed by any stretch.

brianc27

[Deleted User] wrote: »

So I was dealing with a broker who came back to me today with an amount they'd formally offer me.

From what I gather, from the brief phone call, the banks they're dealing with are being cautious and now only offering 3.5 times your net income (whereas central bank rules would be working off gross income).

I wasn't sure if I was interpreting the phone call correctly or not to be honest, but then she gave me the 'best offer' they could secure, and sure enough, it works out about 3.5 times my net income.

Is this just them telling me I'm a financial disaster? Or is it, as she let on, that a lot of banks are now tightening up and swapping to calculating by net income? Seems a needless kick.

Rebuilding Ireland, here I come

I've never heard of that, mine was almost exactly 3.5 gross income and 50% of bonuses

markodaly

true-or-false wrote: »

You'll still be subject to the 3.5 limit (or 4.5 with an exemption), but your existing mortgage will be treated as an additional outgoing and factored into your repayment capacity and stress tests. They'll likely want to see a credit report from the country in question too, to make sure there are no issues on your existing loan.

Would they see rental income on this other property as something to offset against the repayments or the Loan to Value ratio on the property itself?

Would there be a cut off where they would give a flat out no?

tobsey

tobsey wrote: »

Do you have kids and childcare? Or existing loans or HP agreements you have to pay? That will limit you. My wife and I have 4 kids and we haven’t ever been offered 3.5x. When my wife was part time that really limited us but now she’s gone full time we can afford to trade up without needing the full 3.5x.

This is the annoying thing - I have practically zero outgoings. No kids, no childcare, no ex-wife I've to give money to, no loans or debts of any kind.


I had an €80k loan with the credit union that was supposed to be repaid at €670 over 15 years, but I managed to clear that in 4 years. Worked out I paid about 1,800 per month and I still kept my car on the road, had food/drink, paid the heating bills, etc.


But the mortgage I want would be for about 180k, which would mean (assuming 4% over 30 years) monthly repayments of €860. It's bizarre.




Problem for me is I'm looking at a very specific house, and I loosely know the owner. It's supposed to be coming up for sale, as he's sorting out getting valuations done on it, etc. and now I've wasted the best part of three weeks with a broker, assuming I'd be alright. I'll apply to Rebuilding Ireland and see what happens. Hopefully they'll at least give me an approval amount that I can work with, so i can at least get to making an offer on the house (I'm probably being optimistic).

CIP4

Deleted User wrote: »

This is the annoying thing - I have practically zero outgoings. No kids, no childcare, no ex-wife I've to give money to, no loans or debts of any kind.


I had an €80k loan with the credit union that was supposed to be repaid at €670 over 15 years, but I managed to clear that in 4 years. Worked out I paid about 1,800 per month and I still kept my car on the road, had food/drink, paid the heating bills, etc.


But the mortgage I want would be for about 180k, which would mean (assuming 4% over 30 years) monthly repayments of €860. It's bizarre.




Problem for me is I'm looking at a very specific house, and I loosely know the owner. It's supposed to be coming up for sale, as he's sorting out getting valuations done on it, etc. and now I've wasted the best part of three weeks with a broker, assuming I'd be alright. I'll apply to Rebuilding Ireland and see what happens. Hopefully they'll at least give me an approval amount that I can work with, so i can at least get to making an offer on the house (I'm probably being optimistic).

But do you already own a home and you are moving up ? Is the rebuilding Ireland Mortgage not only for first time buyers that meet certain criteria ?

Paul_Mc1988

CIP4 wrote: »

But do you already own a home and you are moving up ? Is the rebuilding Ireland Mortgage not only for first time buyers that meet certain criteria ?

Yeah I'm thinking the same. I can't figure out why somebody would take out that big a loan if not for a property.

CIP4

CIP4 wrote: »

But do you already own a home and you are moving up ? Is the rebuilding Ireland Mortgage not only for first time buyers that meet certain criteria ?

No, I'm a first time buyer. I do realise that Rebuilding Ireland is for first timers, and they have criteria for who can apply (I am eligible, thankfully).

I am just annoyed at the real low-ball offer made to me. Surely others are in similar boats, yet property is selling like it's no one's business. I can't make the connection there.

Almost everyone seems to be stifled in some form or another (PAYE people's companies availing of TWSS seems to be a common reason people aren't getting approved, and self employed people having a rough 2020 due to PUP/Covid), on top of that, banks (based on my experience this week) are tightening up the belt on people for no apparent reason.. but yet houses are selling left, right and centre. It's bizarre.

Ikozma

Would I have a better chance of getting a mortgage if I sell my current home or if I rent it out, I'd prefer to rent it out, would that effect my ability to get a mortgage in anyway or could it actually improve my chances

CIP4

Deleted User wrote: »

No, I'm a first time buyer. I do realise that Rebuilding Ireland is for first timers, and they have criteria for who can apply (I am eligible, thankfully).

I am just annoyed at the real low-ball offer made to me. Surely others are in similar boats, yet property is selling like it's no one's business. I can't make the connection there.

Almost everyone seems to be stifled in some form or another (PAYE people's companies availing of TWSS seems to be a common reason people aren't getting approved, and self employed people having a rough 2020 due to PUP/Covid), on top of that, banks (based on my experience this week) are tightening up the belt on people for no apparent reason.. but yet houses are selling left, right and centre. It's bizarre.

Yes market is completely crazy has been since last year. I put offers on a few house like what I felt were strong offers and still got out bid 30 and 40k. There was one house in particular I got out bid by like 40k on but it was a fixer upper and I was going to do all the work myself and I reckoned cost of house plus materials it would be just about about worth it (no labour added) in other words I had strong money on it. I ended up out bid 40k on it and the person that bought it has absolutely no DIY skills and is getting a builder to do everything made absolutely no financial to me

I gave up on trying to get something the end of last year my mortgage approval is out now so I am going to reapply in about a month and hopefully try get more money as I have a higher paying job now and Start into the madness of trying to buy again. It’s tough going you find a house you like and 10 others like it and the crazy bidding wars start. Auctioneers absolutely loving it trying to drive up the price as much as they can it will be all worth it in the end I hope.

Dodge

[Deleted User] wrote: »

but yet houses are selling left, right and centre. It's bizarre.

Less houses are selling, so it’s not that they’re selling ‘left right and centre’, it’s that’s the ones that do are bing snapped up

And affordability is the only thing that matters to a bank. The central bank limit is just that. A limit. In my experience (ie talking to friends etc), most don’t get the max they think they’re entitled to. They get what rhe bank will offer them

If you don’t like that offer, try other banks

Dodge

Dodge wrote: »

Less houses are selling, so it’s not that they’re selling ‘left right and centre’, it’s that’s the ones that do are bing snapped up

The point I was making is that anything that's up for sale, is selling, or at least has been until very recently, at silly prices. Loads and loads of people are in a situation wherein they can't drawdown on a mortgage, often due to issues beyond their control, yet house prices are edging higher than anytime since the height of the boom.

If you don’t like that offer, try other banks

I was dealing with a broker, who work with several banks/lenders, and the broker informed me that all of the lenders are tightening up on the amounts they'll lend, and to who (hence them using net income instead of gross to calculate an offer for me).


As a result, I am now trying Rebuilding Ireland. AKA: "The loan of last resort".

Dodge

[Deleted User] wrote: »

The point I was making is that anything that's up for sale, is selling, or at least has been until very recently, at silly prices. Loads and loads of people are in a situation wherein they can't drawdown on a mortgage, often due to issues beyond their control, yet house prices are edging higher than anytime since the height of the boom.





I was dealing with a broker, who work with several banks/lenders, and the broker informed me that all of the lenders are tightening up on the amounts they'll lend, and to who (hence them using net income instead of gross to calculate an offer for me).


As a result, I am now trying Rebuilding Ireland. AKA: "The loan of last resort".

I just think you’re exaggerating the ‘loads and loads’ of people can’t draw down. As you can see enough people can draw down to buy the houses. It’s not that surprising

Dodge

Dodge wrote: »

I just think you’re exaggerating the ‘loads and loads’ of people can’t draw down. As you can see enough people can draw down to buy the houses. It’s not that surprising

But it's true. I know a few people personally (anecdotal, of course) that have been given AIP and then once they like the look of a house and send in their documents, it falls apart on them.


Also, houses going sale agreed, and then re-appearing again, or sales falling through because of people going sale agreed with the best of intentions, and then either realising they're paying over the odds and getting cold feet, or the bank stifling their drawdown efforts, and the sale falls apart.


I do a bit of work for Auctioneers and the general story is that the last 6 months have been very 'turbulent'.


Perhaps it's not happening in Dublin City Centre, but it is happening.

Emma2019

If you're not getting the loan you want I would try I ll the institutions independently of your broker. I've seen a lot of people say they got higher amounts independently than going through a broker and lots of others saying they got more via a broker after trying direct. Shouldn't be the case but two bites of the cherry does seem to yield different results for some.

Depending on your CoCo rebuilding ireland can take months. I saw a guy who submitted everything to Meath Coco in May and they gave him a meeting in December! Some will definitely be way quicker (e.g. weeks for AIP in Cork city I think)

I'd also always apply direct with your actual bank. Dont know if its because they look at more than the 6 months they're supposed to but have seen some think there was no point trying AIB and then having a breeze of getting approval because it was their usual bank.

ELM327

Ignore the broker.
We've gotten two approvals from two different banks for the full 3.5X our gross salary including 50% of bonuses too. Apply directly. If you're not looking for a CBI exemption and have proven repayment capacity you'll get more direct.

ec18

Deleted User wrote: »

But it's true. I know a few people personally (anecdotal, of course) that have been given AIP and then once they like the look of a house and send in their documents, it falls apart on them.


.

just on this there is going to be a reason that it falls apart on these people. Blaming the banks is lovely and all.

But last time (The crash) they were complained about for a lack of prudence and now 'people' complaining about an abundance of prudence.

Ash3011

Anyone know how long it's taking to go from AIP to full loan offer at the moment? All outstanding documents are sent in now, valuation done etc. so keen to know waiting times.

boredatwork82

Anyone having issues with KBC?

Was due to drawdown on Friday. On Thursday they said all was good. My solicitor arranged everything. On Friday no sign of money, my solicitor rang to be told an issue. At this late stage KBC have amended all the criteria to make it unachievable. All information they were provided at both AIP and official approval has not changed. But they have decided not to accept it.

Anyone else having issues? A part of me thinks that with the exit out of the Irish market they are trying to not issue anymore mortgages.

BronsonTB

boredatwork82 wrote: »

Anyone having issues with KBC?

Was due to drawdown on Friday. On Thursday they said all was good. My solicitor arranged everything. On Friday no sign of money, my solicitor rang to be told an issue. At this late stage KBC have amended all the criteria to make it unachievable. All information they were provided at both AIP and official approval has not changed. But they have decided not to accept it.

Anyone else having issues? A part of me thinks that with the exit out of the Irish market they are trying to not issue anymore mortgages.

Downside, always a troublesome bank to get over the line...just how they tend to operate. On the upside your interest rate is lower than others.
(I'd also imagine staff morale internally is at rock bottom since the leaving announcement & it won't be long till they officially stop accepting new business)

ec18

boredatwork82 wrote: »

Anyone having issues with KBC?

Was due to drawdown on Friday. On Thursday they said all was good. My solicitor arranged everything. On Friday no sign of money, my solicitor rang to be told an issue. At this late stage KBC have amended all the criteria to make it unachievable. All information they were provided at both AIP and official approval has not changed. But they have decided not to accept it.

Anyone else having issues? A part of me thinks that with the exit out of the Irish market they are trying to not issue anymore mortgages.

what criteria did they change?