HELP NEEDED: Sale agreed but bank refuses to give us the mortgage

Black_Knight

JeffKenna wrote: »

Have a serious think if you really want this house and at the current price. If so, I'd try and approach the buyer and explain the situation. See if they will reduce the price by €15k and head to the credit union for the remaining €20k.

Sounds to me like the last thing they need is another loan. A 28k gift and an exemption sounds pretty out of their comfort zone to me.

340k sounds like their max they can buy at without the exemption, and assuming they had 37k of a deposit together that's about 300k max they can borrow. At 3.5 times their salary that's about 42k salary each. 2.5k income a month assuming a small pension contribution.
Napkin maths it's about 1300 a month of a mortgage for their 372k property. Then house and life insurance on top of that. At least 1400 a month, which would be 28% of their take home pay, which is pretty high. Throwing on another loan repayment on that wouldn't be advisable.

Another assumption I'm making is they only have the minimum deposit, meaning only 9k of it is from their own savings, which isn't great when your talking about using a loan to finance a loan.

I'm sure I've caused offence along the way. It's not my intent.

boege

OP,
As other have said, this is not a time to stretch yourself financially when there is the looming possibility of a deep global recession. The fact that the banks are already pulling back their horns tells you what they are thinking about the future.

Do a projection with at least one of you losing your job and see what happens financially. If you can survive that then maybe go back with a lowball offer.

However, my advice is let this period of uncertainty pass. This is no time to gamble with your financial future. God knows we saw enough of that back in the nauties!

wildwillow

You are stretched to the limit and had huge help for the deposit. You should be on your knees thanking the bank for giving you pause and a way out of the deal. Get your deposit back, wait for the inevitable price drop and save in the meantime.
My neighbour closed his sale just before the lockdown and is so delighted as he knows he would not achieve his reasonable price for ages if it went back on the market.
Do not ever become emotional about a house. It's possible to alter almost any house to your requirements.

Pivot Eoin

Yeah tbh I'd count yourself lucky that they didn't give you this exemption.

If you had got this exemption and even 1 of you lost your income even temporarily you could have been in serious trouble.

un5byh7sqpd2x0

ted1 wrote: »

Aren’t deposits refundable

Only the booking deposit is, once the contracts are signed, the balance of the 10% deposit is paid over and the whole lot is non refundable at that stage.

Empty_Space

My advice is count yourself lucky.
The banks know well what's coming and in looking out for themselves, have indirectly looked out for you.
Many near the end of last crisis were not so lucky

amyed198

Thanks to the people who have replied. We got very emotional yesterday and didn't stop for a breather.

We have slept on it and decided to go back to the drawing board are not borrow more to get the property.

Our only concern is that prices may rise with the next 6 months due to limited supply, we have a feeling prices may drop over the longer term but we really need somewhere within the next 6 months as we are paying a fortune on rent.

listermint

amyed198 wrote: »

Thanks to the people who have replied. We got very emotional yesterday and didn't stop for a breather.

We have slept on it and decided to go back to the drawing board are not borrow more to get the property.

Our only concern is that prices may rise with the next 6 months due to limited supply, we have a feeling prices may drop over the longer term but we really need somewhere within the next 6 months as we are paying a fortune on rent.

Prices aren't rising and I'd suggest you shop around on rent because that's taking a hit too.

ladystardust

amyed198 wrote: »

Thanks to the people who have replied. We got very emotional yesterday and didn't stop for a breather.

We have slept on it and decided to go back to the drawing board are not borrow more to get the property.

Our only concern is that prices may rise with the next 6 months due to limited supply, we have a feeling prices may drop over the longer term but we really need somewhere within the next 6 months as we are paying a fortune on rent.

We are in a similar position. We had the day you had a few weeks ago. I dont envy anyone that. Well done for taking a breather and thinking about it. Best of luck!

wildwillow

Well done for making that decision. Keep saving, keep looking and your ideal house will come along. Be glad that you are not having sleepless nights over money.
House prices won't rise for the very reason that you have had to step back. Banks are not going to lend money recklessly this time round.
Review your requirements for renting as well. You may be able to get a cheaper place or renegotiate the rent.
Good luck for the future and be proud of yourselves.

Claw Hammer

Elliana Salmon Jib wrote: »

Only the booking deposit is, once the contracts are signed, the balance of the 10% deposit is paid over and the whole lot is non refundable at that stage.

It is all refundable until the vendor signs the contract.