Saving/Applying for a mortgage 2020-22 Edition

Bubbaclaus

you2008 wrote: »

well. that is very strange, I asked BOI two years ago, got 4.5 times approved ( did not use it as buy did not work out), asked this same guys two years later ( two months ago at BOI), he told me no more 4.5 times due to the central bank new rule for the covid 19 this year, so he is lie to me ?

Either he lied to you or else you misunderstood him. It is not up to the Central Bank as to whether you are offered an exemption or not.

you2008

Bubbaclaus wrote: »

Either he lied to you or else you misunderstood him. It is not up to the Central Bank as to whether you are offered an exemption or not.

Really? that is very interesting, glad I asked here and cleared this confusion.

Many thanks for the feedback.

hanaimai

you2008 wrote: »

Really? that is very interesting, glad I asked here and cleared this confusion.

Many thanks for the feedback.

One potential reason why there might not be any exemptions is due to the lower levels of lending following Covid. Under the Central Bank rules, the banks can exempt a certain percentage of their lending from the 3.5 limit. So the less they lend overall, the less exemptions that are available. So banks probably gave out exemptions under normal lending exemptions early in the year and once Covid hit, they had to stop/greatly lower that since there was such an impact on overall lending.

you2008

hanaimai wrote: »

One potential reason why there might not be any exemptions is due to the lower levels of lending following Covid. Under the Central Bank rules, the banks can exempt a certain percentage of their lending from the 3.5 limit. So the less they lend overall, the less exemptions that are available. So banks probably gave out exemptions under normal lending exemptions early in the year and once Covid hit, they had to stop/greatly lower that since there was such an impact on overall lending.

I was thinking the same as I do know how exemptions works, but he told me there is no chance for the year of 2021 as well based the “new rule”，which seems no one know what he is talking about it.

Cian59

Does anyone know when AIB are looking for a letter confirming you're not on EWSS? Is it before letter of offer or drawdown? Trying to get ahead of it with the boss.

omicron

Cian59 wrote: »

Does anyone know when AIB are looking for a letter confirming you're not on EWSS? Is it before letter of offer or drawdown? Trying to get ahead of it with the boss.

No help to you with AIB but Ulster want the letter 3 times from me, once prior to AIP, one when going to letter of offer and they've told me they will require it a third time just before drawdown.

recyclebin

Is an employer obliged to tell their employees that they are using the EWSS? And would an employer want all the banks knowing it too?

I know Revenue will be publishing this data at a later date but what about the period before then?

Renjit

Cian59 wrote: »

Does anyone know when AIB are looking for a letter confirming you're not on EWSS? Is it before letter of offer or drawdown? Trying to get ahead of it with the boss.

For BOI, post mortgage approval, they will need employer letter confirming not on EWSS few weeks before the drawdown. They will also need updated bank statements and payslips for last 3 months.

poker--addict

Is there any way to predict when a bank might changes its rates? Despite some newer providers entering market is the pandemic likely to mean providers retain high rates due to the uncertainty? Any other factors one could be keeping an eye on? Does Ireland have an equivalent of the U.K. monetary policy committee?

Jasna1982

If I get a promotion in January with a significantly higher salary, can I apply for a mortgage straight away?
I know the banks want to see 6 months of payslips. Do I need a few months on the new salary, or can I apply for a higher mortgage the same month?

HannahR31

Jasna1982 wrote: »

If I get a promotion in January with a significantly higher salary, can I apply for a mortgage straight away?
I know the banks want to see 6 months of payslips. Do I need a few months on the new salary, or can I apply for a higher mortgage the same month?

I'm in a similar boat - starting a promotion in 2 weeks. I've been told I can get a mortgage based on the higher salary immediately just need 1 payslip and updated salary certificate.

But also told it's that way because it's within the same field/company - if it was a completely different job then you'd have to wait.

Jasna1982

HannahR31 wrote: »

I'm in a similar boat - starting a promotion in 2 weeks. I've been told I can get a mortgage based on the higher salary immediately just need 1 payslip and updated salary certificate.

But also told it's that way because it's within the same field/company - if it was a completely different job then you'd have to wait.

Good to know, thanks! I'm even staying in the same team
So I'd just need to wait for 1 updated payslip.

tadgho

Does being on an incremental pay scale (public sector job with very high job security) hold any value when applying for mortgage, or will your current salary right now only determine how much you can borrow?

HannahR31

tadgho wrote: »

Does being on an incremental pay scale (public sector job with very high job security) hold any value when applying for mortgage, or will your current salary right now only determine how much you can borrow?

ICS Mortgages and Finance Ireland both do a public sector mortgage where they will take your basic salary to be 2 points up the pay scale and will work off that. As far as I know they're the only ones who will look at this.

Luca G

Hi I'm currently saving for a mortgage. Another year of saving if all goes to plan should have enough for a mortgage.
I have a granny flat rented out that I got built awhile ago on the side of my mothers house its paid off.

Should I put the rent i get from it into my savings account with the money I have been saving for a mortgage or leave it out.

I know it could impact how much I can borrow. But if I put it in along with my savings i should be able to get a mortgage in less then a year.

Anastasia_

Hi all,

I'm currently mortgage approved and have found a house, but I'm a bit worried about my budget. After bills (including everything, food, transport, health insurance etc) I would be left with around €200 a week as discretionary income. Is this a very low amount? I feel like it is but bank etc are happy with it.

I think it is because I am a single applicant and not taking into account income from rent a room, as I don't want to be tied to doing that. I've always been a saver and just think that it's a crazily low amount. What is the usual discretionary income people are left with at the end of the week?

poker--addict

That will vary wildly Anastasia. If the bank is happy, even in current times, I would feel very comfortable. The alternative is you continue to pay a fortune in rent with no abilty to rent a room. All things being equal your earnings may increase over time, and you will rent the room at least some of the time.

Renjit

Anastasia_ wrote: »

Hi all,

I'm currently mortgage approved and have found a house, but I'm a bit worried about my budget. After bills (including everything, food, transport, health insurance etc) I would be left with around €200 a week as discretionary income. Is this a very low amount? I feel like it is but bank etc are happy with it.

I think it is because I am a single applicant and not taking into account income from rent a room, as I don't want to be tied to doing that. I've always been a saver and just think that it's a crazily low amount. What is the usual discretionary income people are left with at the end of the week?

Would you have some savings set aside as rainy day fund. or someone from your family able to help you in that case? Go ahead then. I would ideally look for 3k-5k savings in place at any time for single person.

Renjit

Jasna1982 wrote: »

If I get a promotion in January with a significantly higher salary, can I apply for a mortgage straight away?
I know the banks want to see 6 months of payslips. Do I need a few months on the new salary, or can I apply for a higher mortgage the same month?

Bank looks at your salary certificate to assess for lending criteria. Payslips are secondary in nature, for reconciling your bank statements.

Renjit

HannahR31 wrote: »

I'm in a similar boat - starting a promotion in 2 weeks. I've been told I can get a mortgage based on the higher salary immediately just need 1 payslip and updated salary certificate.

But also told it's that way because it's within the same field/company - if it was a completely different job then you'd have to wait.

Even with different job if your salary certificate shows that you are not on probation, it should be fine. However, it is very unlikely that at new job you will have probation waiver.

pooch90

HannahR31 wrote: »

ICS Mortgages and Finance Ireland both do a public sector mortgage where they will take your basic salary to be 2 points up the pay scale and will work off that. As far as I know they're the only ones who will look at this.

Just to add, their wait times are astronomical atm. It took us 6 weeks to get an answer from ICS (which was a crap offer) and then FI came back with better (they take children's allowance into account too apparently) after 3 weeks but our broker had to escalate our case and it hasn't been fully approved yet.

Jimson

Whats the banks view on bonuses, do they take these into account as part of the 3.5 rule. Say if I got 6% last year and 9% this year of my salary what way does it work?

Black_Knight

Jimson wrote: »

Whats the banks view on bonuses, do they take these into account as part of the 3.5 rule. Say if I got 6% last year and 9% this year of my salary what way does it work?

I think unless it's guaranteed then it's not counted.

stampydmonkey

Jimson wrote: »

Whats the banks view on bonuses, do they take these into account as part of the 3.5 rule. Say if I got 6% last year and 9% this year of my salary what way does it work?

We have AIP from BOI and KBC. I have a similar set up on bonuses. My bonus % varies but the payment is guaranteed. Both banks averaged the last 3 years and only considered 50% of it.

Anastasia_

poker--addict wrote: »

That will vary wildly Anastasia. If the bank is happy, even in current times, I would feel very comfortable. The alternative is you continue to pay a fortune in rent with no abilty to rent a room. All things being equal your earnings may increase over time, and you will rent the room at least some of the time.

Thanks Poker Addict. I'm 23 and living at home, so I suppose it's just an option to me as opposed to a way of getting out of paying rent. I'm on an incremental scale so my earnings will increase. I do desperately want to get out of home but don't want to leave myself with nothing at the end of the week either for a few years.

Renjit wrote: »

Would you have some savings set aside as rainy day fund. or someone from your family able to help you in that case? Go ahead then. I would ideally look for 3k-5k savings in place at any time for single person.

It would be leaving me with about 10k in savings. I'm a complete worrier so wouldn't leave myself with anything less than that! What would worry me is that I don't feel like I'd be left with enough to continue on saving more than €50 or €60 a week, which I feel is nothing.

Billythekid19

Anastasia_ wrote: »

Hi all,

I'm currently mortgage approved and have found a house, but I'm a bit worried about my budget. After bills (including everything, food, transport, health insurance etc) I would be left with around €200 a week as discretionary income. Is this a very low amount? I feel like it is but bank etc are happy with it.

I think it is because I am a single applicant and not taking into account income from rent a room, as I don't want to be tied to doing that. I've always been a saver and just think that it's a crazily low amount. What is the usual discretionary income people are left with at the end of the week?

200 euro a week is not a lot in this country. Suppose your boiler goes in the middle of winter, the replacement could run into thousands of euro. It is recommended by many financial advisors that your mortgage repayments are no more than 25- 30% of your gross income.

RedXIV

Billythekid19 wrote: »

200 euro a week is not a lot in this country. Suppose your boiler goes in the middle of winter, the replacement could run into thousands of euro. It is recommended by many financial advisors that your mortgage repayments are no more than 25- 30% of your gross income.

To be fair, she mentioned she's kept 10k as savings and is a worrier. In my mind, she's been very prudent so far, and will likely remain so, and since she has that cushion to hand for contingencies, I believe she should be fine. Especially since she's on incremental wages which suggests that her position will only get better and better

itsusuallyjazz

Jasna1982 wrote: »

Good to know, thanks! I'm even staying in the same team
So I'd just need to wait for 1 updated payslip.

I got a promotion and applied for mortgage with one payslip on new wages and got AIP

poker--addict

Anastasia_ wrote: »

I do desperately want to get out of home but don't want to leave myself with nothing at the end of the week either for a few years.

I would not view it as a way out of home, and instead view it as an investment. In reality, if renting a room you wont be living on the breadline anyway. If you are close to home, you always have the fall back of moving back home for a year and renting out.

If you do happen to have a few months or even a few years where you have to be careful with the pennies, that is not necessary a bad thing, and usually pays off in droves compared with those who live for the weekend. I'd rather have a house if it meant skipping the odd session or day at the races.:)

Pete123456

Had a chat with AIB, they’re subtracting €3600 from your net wages for a joint application, less any loans or dependents. If you can afford the stress tested mortgage payment with what is left over, you will qualify for an exception to the 3.5x LTI... tough enough!