Is it fair to blame the Banks & Government if you cant get mortgage approval?

FutureGuy

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

1. Traveling the world
2. Spending 3-6 years in college
3. Living in Australia for a couple of years
4. Buying new cars
5. Buying the latest smartphones
6. poor family planning
7. Going on expensive holidays every summer
8. Boozing every weekend
9. Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"



Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.


For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".


Cant blame the banks and government for everything, personal responsibility has to play a part, no?

It's not fair, but it's easy and convenient.

- Blame the government, but spend 25k on your wedding a year earlier.
- Blame the government, but too proud to work in a McDonalds part-time to get more money into savings for a mortgage.
- Blame the government, but have a car loan to service your 191 car that replaced your perfectly fine 131 car.
- Blame the government, but spend 60/70 per week on Starbucks and takeaways.

We scrimped and saved for 4 full years. No fancy holiday, cut down on luxury, didn't go on expensive holidays, didn't change car, had a beautifully intimate small wedding for 6,000 euro (inc honeymoon). Bought a house this time last year in a beautiful area where we always wanted to live.

Dempo1

Maybe I musing something iin this whole Housing, Mortgage, First time buyer challenge, Debate. Single, I faced the same challenges back in 2001 when I got my mortgage. From Dublin, I ended up purchasing a humble cottage in Laois. At the time I had little choice as property prices in Dublin jusy beyond my reach. I faced 3 years of daily commute to Dublin and before villages, towns in Kildare we're bypassed, average drive home was 4 hours and I'm not kidding.

There was absolutely no government supports, apart from mortgage interest relief for a few years.

I'm not trying to minimise the challenges first time buyers are facing and there was certainly no investment funds buying up entire estates but little has really changed in Ireland since I took the plunge. I'm not at all sure government can solve these issues.

I should also state back in 2000, Mortgage applications very very complex and strict criteria applied and this long before Central Bank introduced rules after the crash.

One thing I do think might be a game changer is Finance Ireland new 20 year fixed rate mortgages, the state a major stakeholder and perhaps this might be a mechanism were government could offer indirect support with regard to mortgage approvals, applications.

Prices will not decrease, that's just economics but if more people can get manageable fix rate mortgages, this surely could help encourage supply and encourage developments. Worth pointing out Ireland has by far the most expensive mortgages in Europe and this rarely ever addressed and no, its nothing to do with capitalisation requirements of banks, this is a 40 year outrage.

Antares35

FutureGuy wrote: »

It's not fair, but it's easy and convenient.

- Blame the government, but spend 25k on your wedding a year earlier.
- Blame the government, but too proud to work in a McDonalds part-time to get more money into savings for a mortgage.
- Blame the government, but have a car loan to service your 191 car that replaced your perfectly fine 131 car.
- Blame the government, but spend 60/70 per week on Starbucks and takeaways.

We scrimped and saved for 4 full years. No fancy holiday, cut down on luxury, didn't go on expensive holidays, didn't change car, had a beautifully intimate small wedding for 6,000 (inc honeymoon). Bought a house this time last year in a beautiful area where we always wanted to live.

I've a friend and a sibling like that. Literally change their cars for new ones every year and still complain about the fact they "can't afford to buy". I could do with upgrading my own car because of all the baby stuff we have to cart around but I wouldn't even think about it until we draw down our mortgage, which will likely be in a few months.

Parents gave me money a while ago which they said would have been what they'd contribute to our wedding costs (we are engaged but couldn't plan a wedding because of covid and other factors). In the end I shrugged off the idea of a wedding for the next while and invested the gift instead. It's tripled in value now and will be a large chunk towards deposit, solicitor fees, redecorating etc. Our plan now is to keep the wedding small and only have our close friends and family at it.

elefant

It's a great illustration of just how dysfunctional the housing market is that it's being floated by anyone as a perfectly reasonable step for people years into their careers, in well-paying jobs, to move back home to their parents for a couple of years to afford to buy. So grim.

is_that_so

elefant wrote: »

It's a great illustration of just how dysfunctional the housing market is that it's being floated by anyone as a perfectly reasonable step for people years into their careers, in well-paying jobs, to move back home to their parents for a couple of years to afford to buy. So grim.

You could view it as grim or as a practical solution. If it solves that problem what's actually wrong with it? If someone is so concerned about what others might think they may not be quite so grown up just yet.

namloc1980

is_that_so wrote: »

You could view it as grim or as a practical solution. If it solves that problem what's actually wrong with it? If someone is so concerned about what others might think they may not be quite so grown up just yet.

And for those where it isn't an option? Tough luck is it?

Antares35

is_that_so wrote: »

You could view it as grim or as a practical solution. If it solves that problem what's actually wrong with it? If someone is so concerned about what others might think they may not be quite so grown up just yet.

Nobody is saying they won't do it because of what others think, but it isn't a viable option for many people.

Antares35

namloc1980 wrote: »

And for those where it isn't an option? Tough luck is it?

Apparently one should also be able to rent and save for a house, no two houses, if they can't bunk with their parents. They just need to stop spending all their money on iphones, something something... avocado.

Das Reich

Who can work remotely and is young can buy in this lovely French speaking town in Southern Italy (no one knows exactly why they speak French and when they arrived) mass emigration to Canada left the town empty and nice houses for around 20k.

https://www.idealista.it/vendita-case/faeto-foggia/?ordine=prezzi-asc

elefant

is_that_so wrote: »

You could view it as grim or as a practical solution. If it solves that problem what's actually wrong with it? If someone is so concerned about what others might think they may not be quite so grown up just yet.

Having fully grown men and women return to living with their parents out of financial necessity, while working in well-paid jobs, is clearly a regressive step.

It's grim that the 'practical solution' means sacrificing independence.

SnuggyBear

namloc1980 wrote: »

And for those where it isn't an option? Tough luck is it?

No they have other options. We have one example of a guy on this thread who earns 50k in Dublin and got approval for a mortgage and can buy in Dublin. Then we have someone claiming doctors can't afford to buy a house, lol.

Donald Trump

FutureGuy wrote: »

It's not fair, but it's easy and convenient.

- Blame the government, but spend 25k on your wedding a year earlier.
- Blame the government, but too proud to work in a McDonalds part-time to get more money into savings for a mortgage.
- Blame the government, but have a car loan to service your 191 car that replaced your perfectly fine 131 car.
- Blame the government, but spend 60/70 per week on Starbucks and takeaways.

We scrimped and saved for 4 full years. No fancy holiday, cut down on luxury, didn't go on expensive holidays, didn't change car, had a beautifully intimate small wedding for 6,000 euro (inc honeymoon). Bought a house this time last year in a beautiful area where we always wanted to live.

While there is of course an element of truth to this for some people it is often just a form or self-congratulation by those espousing it. When their starting position might not be comparable in any sense to those they are giving the advice to

SnuggyBear

elefant wrote: »

Having fully grown men and women return to living with their parents out of financial necessity, while working in well-paid jobs, is clearly a regressive step.

It's grim that the 'practical solution' means sacrificing independence.

I was asked how I bought a house on 24k a year and I explained how. Not sure in what world 24k is a well paid job. If a couple on 100k to 120k combined living in any part of the country can't buy a house its on them. Regardless of being able to move back home.

Wanderer78

SnuggyBear wrote: »

I was asked how I bought a house on 24k a year and I explained how. Not sure in what world 24k is a well paid job. If a couple on 100k to 120k combined living in any part of the country can't buy a house its on them. Regardless of being able to move back home.

...no its not, theres clearly something very deeply gone wrong regarding property and land, financialisation of our economies has failed

SnuggyBear

Anyone ever watch those shows on rte where a guy helps people with money management? Says everything you need to know. Absolute idiots with money and clueless to how bad they are until it's pointed out to them.

Wanderer78

SnuggyBear wrote: »

Anyone ever watch those shows on rte where a guy helps people with money management? Says everything you need to know. Absolute idiots with money and clueless to how bad they are until it's pointed out to them.

....yes some humans do indeed struggle with money matters, but no, not all do, some are extremely good with their money, yet still find themselves unable to provide themselves with their most critical of needs, in particular property related, theres clearly something deep at fault here

am_zarathustra

Very few people can/will up sticks like that. Also to run the country we need teachers, nurses, guards, accountants, bin men........we need these people in the same regions we need doctors, programmers, finance specialists etc.

The state needs to build themselves, and cheaply on state land. Then the impetuous for foreign groups to enter the market to rent to councils is gone and these houses can go to regular mortgage holders at a reasonable price.

I completely agree with some of what's being said, I'm just sale agreed and we definitely sacrificed to get here (and got a bit lucky which sped up the process), no car, holidays for a couple of days in Ireland, extra work where we could, would love to get married but just can't until after drawdown. But we are also lucky in that we have very stable jobs, not on huge money but comfortable. The lack of supply for single people is an issue, there should be housing stock of small 1 and 2 beds available but again these all go to invesent funds essentially.

Neither point is wrong, people need to sacrifice generally to get a mortgage, be that the sacrifice of building a good, stable career and savings or the holidays/cars etc but in the same token the large number of investment funds mean it is difficult in certain markets to get access to what should be possible.

Antares35

SnuggyBear wrote: »

Anyone ever watch those shows on rte where a guy helps people with money management? Says everything you need to know. Absolute idiots with money and clueless to how bad they are until it's pointed out to them.

Do you base all your beliefs on anecdotal evidence? I bought a house on a low wage therefore anyone can. I saw some people on a TV show who are bad with money therefore everyone who can't buy a house is bad with money etc.

And FWIW, I will be buying in a few months, so I'm not particularly in one camp and jumping to defend my spending habits. I just think you are way too simplistic in your approach.

elefant

SnuggyBear wrote: »

I was asked how I bought a house on 24k a year and I explained how. Not sure in what world 24k is a well paid job. If a couple on 100k to 120k combined living in any part of the country can't buy a house its on them. Regardless of being able to move back home.

A single man or woman on 60k a year looking for a home to buy in Dublin isn't getting far while paying Dublin rent. I feel despondent for my friends and family in Ireland in this kind of situation. They're expected to grow up, mature and quit any youthful frivolities on one hand, and infantalise themselves by sacrificing their adult independence and personal freedom on the other.

I'm not having a go at you, by the way. It seems from your reply that it may have come off that way. Suggesting that people move back in with their parents to save is a very common trope in these discussions on boards.

greenfarm

I agree with OP, we baby young adults for way too long now and act like old age doesnt happen

We call 24 year olds kids and think 40 is still young.

In reality 24 is almost past absolute peak fertility for women and 40 is middle age if your extremely lucky to make it to 80.

Thats no fault of our generation, in school we are not thought about money and ease it brings to life and we dont talk about old age and diseases. Most people in Ireland by age 50 have some kind of co-morbidity and health is declining rapidly.

We need to hurry up and stop having 4 year college courses that could be done in 2.

SnuggyBear

Antares35 wrote: »

Do you base all your beliefs on anecdotal evidence? I bought a house on a low wage therefore anyone can. I saw some people on a TV show who are bad with money therefore everyone who can't buy a house is bad with money etc.

And FWIW, I will be buying in a few months, so I'm not particularly in one camp and jumping to defend my spending habits. I just think you are way too simplistic in your approach.

What can I say I'm a simplistic kinda guy I go off what I see and do. I don't buy that a doctor or even someone on 50k can't buy a house. Hard yes, but it's the biggest purchase of your life why should it be easy.

Wanderer78

greenfarm wrote: »

I agree with OP, we baby young adults for way too long now and act like old age doesnt happen

We call 24 year olds kids and think 40 is still young.

In reality 24 is almost past absolute peak fertility for women and 40 is middle age if your extremely lucky to make it to 80.

Thats no fault of our generation, in school we are not thought about money and ease it brings to life and we dont talk about old age and diseases. Most people in Ireland by age 50 have some kind of co-morbidity and health is declining rapidly.

We need to hurry up and stop having 4 year college courses that could be done in 2.

.....or maybe stop indebting people, so they can provide themselves with their most critical of needs

Wanderer78

SnuggyBear wrote: »

What can I say I'm a simplistic kinda guy I go off what I see and do. I don't buy that a doctor or even someone on 50k can't buy a house. Hard yes, but it's the biggest purchase of your life why should it be easy.

you re unwilling to accept that something catastrophic is failing in our most critical of needs, most obvious being property

Antares35

greenfarm wrote: »

In reality 24 is almost past absolute peak fertility for women.

We should all panic procreate at 23. That will make it easier to get a house

smurgen

FutureGuy wrote: »

It's not fair, but it's easy and convenient.

- Blame the government, but spend 25k on your wedding a year earlier.
- Blame the government, but too proud to work in a McDonalds part-time to get more money into savings for a mortgage.
- Blame the government, but have a car loan to service your 191 car that replaced your perfectly fine 131 car.
- Blame the government, but spend 60/70 per week on Starbucks and takeaways.

We scrimped and saved for 4 full years. No fancy holiday, cut down on luxury, didn't go on expensive holidays, didn't change car, had a beautifully intimate small wedding for 6,000 euro (inc honeymoon). Bought a house this time last year in a beautiful area where we always wanted to live.

You're anecdotal storylines are just that. I know if sensible couples on good wages - professional who are looking at having to take out giant mortgages to buy average,very very average houses. That's completely dysfunctional. And that's not even including those who are completely priced out of the market now. Eat all the rice you want and spend nought on entertainment for the next 10 years but someone working in a low paying job isn't getting their own house in this country.
The issue is the houses are just not worth it. We're a low density country and there's no real reason for the houses to be the price they are. It's simply financial engineering that's got people either paying cruel rents of signing up for massive mortgages.

timeToLive

JizzBeans wrote: »

If the current generation of first time buyers have spent their 20's doing things like....

1. Traveling the world
2. Spending 3-6 years in college
3. Living in Australia for a couple of years
4. Buying new cars
5. Buying the latest smartphones
6. poor family planning
7. Going on expensive holidays every summer
8. Boozing every weekend
9. Moving out with friends to live the life

Then they shouldn't expect to get mortgage approval in their 30's now because they are "ready to settle down"



Are people really surprised at the recent ERSI report findings? There is nothing inherently wrong with these activities as such, but they are not exactly compatible with saving for a deposit either.


For most ordinary people, home ownership is a long and difficult journey, takes years of planning, saving, sacrifice etc. Its not something you decide to undertake on a whim because your are "getting on".


Cant blame the banks and government for everything, personal responsibility has to play a part, no?

Why would you want to blame people instead of the banks and the government? Why should people suffer for a decade just to buy a house?

Donald Trump

Antares35 wrote: »

SnuggyBear wrote: »

Anyone ever watch those shows on rte where a guy helps people with money management? Says everything you need to know. Absolute idiots with money and clueless to how bad they are until it's pointed out to them.

Do you base all your beliefs on anecdotal evidence? I bought a house on a low wage therefore anyone can. I saw some people on a TV show who are bad with money therefore everyone who can't buy a house is bad with money etc.

And FWIW, I will be buying in a few months, so I'm not particularly in one camp and jumping to defend my spending habits. I just think you are way too simplistic in your approach.

Well SnuggyBear, here is part of my downtrodden story. If I was able to do this then everyone else should be too.



I was in the position of looking for my first career job after the crash here just over a decade ago. There didn't seem to be a lot going on in Ireland so I had to make the huge sacrifice to uproot myself to go to a foreign country. You know, it was terrible - being relatively young and single and having to go to a nice city in a wealthy country with great connectivity back to home. But I gallantly made the sacrifice.



I lived in a relatively cheap studio and having just come from being a poor student/academic, I was fairly frugal. I don't drink or smoke and didn't buy a car. Still I would have saved what I would conservatively estimate to have been over 50k Euro equivalent in my first year.



No avocado toast (It helped that I didn't even know what an avocado looked like at the time). Sure if I can do it, everyone can do it. And if one can't save over 50k in their first job then they are obviously an idiot with money and a loser. All it took was me not knowing what avocados were and some will power and me just being great with money. Or just me being great in general. If I was able to do it, then why can't everyone else. There was obviously no luck or fortunate circumstances or timing involved in my hardship story.



Am I doing it right?

thomas 123

timeToLive wrote: »

Why would you want to blame people instead of the banks and the government? Why should people suffer for a decade just to buy a house?

And paying back the large mortgage 35- 40 years after getting the LOAN -

SnuggyBear

Donald Trump wrote: »

Am I doing it right?

Ye

is_that_so

namloc1980 wrote: »

And for those where it isn't an option? Tough luck is it?

Whoever you are there is a way to address things you can control, your savings and deposit. Throwing your hands up or feeling sorry for people will not do that.
Two couples I knew bought in the early noughties, one would not move in until the spare room was decorated. It was easier for them with one in the bank and a rock bottom fixed loan. The other couple bought where they could, in the massive estates of North Dublin but both are addicted to saving. So much so that they were able to sell up and move back into the city closer to grandparents after seven years.

is_that_so

Antares35 wrote: »

Nobody is saying they won't do it because of what others think, but it isn't a viable option for many people.

Then you need to look for an option that can work for you even if that option might make for a long commute. Everything needs to be on the table.

is_that_so

thomas 123 wrote: »

And paying back the large mortgage 35- 40 years after getting the LOAN -

That's how loans work! Do you have a different solution?

Wanderer78

is_that_so wrote: »

Then you need to look for an option that can work for you even if that option might make for a long commute.

...sometimes this also isnt an option, as it would have a negative effect on your and your families well being

Donald Trump

greenfarm wrote: »

I agree with OP, we baby young adults for way too long now and act like old age doesnt happen

We call 24 year olds kids and think 40 is still young.

In reality 24 is almost past absolute peak fertility for women and 40 is middle age if your extremely lucky to make it to 80.

Thats no fault of our generation, in school we are not thought about money and ease it brings to life and we dont talk about old age and diseases. Most people in Ireland by age 50 have some kind of co-morbidity and health is declining rapidly.

We need to hurry up and stop having 4 year college courses that could be done in 2.

Well greenfarm, there may be indeed some people for who they hit their personal peak of maturity by 24 who cease developing physically, mentally or emotionally beyond that point. You may even include yourself in that cohort if you wish.


Personally, I wouldn't have considered myself to have stopped learning at 24.

is_that_so

Wanderer78 wrote: »

...sometimes this also isnt an option, as it would have a negative effect on your and your families well being

Not sure what you mean here but you really don't know until you've looked hard at everything. Finger pointing is never a solution anyway even if there are systemic problems.

Wanderer78

is_that_so wrote: »

Not sure what you mean here but you really don't know until you've looked hard at everything. Finger pointing is never a solution anyway even if there are problems.

id imagine most in this predicament do and have looked at all possibilities, and are quickly running out of options, theres clearly something catastrophically failing in regards property, something is at fault, and we must clearly identify these faults, and rectify them immediately

smurgen

is_that_so wrote: »

Not sure what you mean here but you really don't know until you've looked hard at everything. Finger pointing is never a solution anyway even if there are systemic problems.

What in God's name are you even saying? Just gibberish.

is_that_so

Wanderer78 wrote: »

id imagine most in this predicament do and have looked at all possibilities, and are quickly running out of options, theres clearly something catastrophically failing in regards property, something is at fault, and we must clearly identify these faults, and rectify them immediately

Immediately unfortunately means 2-5 years at least and no wild promises from certain quarters will change that.

thomas 123

is_that_so wrote: »

That's how loans work! Do you have a different solution?

Okay so we are forgetting the drastic rise in house prices and wage stagnation on this thread - noted.

Wanderer78

is_that_so wrote: »

Immediately unfortunately means 2-5 years at least and no wild promises from certain quarters will change that.

its been clearly obvious for many years now, even pre 08, that something catastrophic is failing in regards property, we havent reacted to these failures at all, in fact we ve been trying to default to previous failed approaches.....

is_that_so

thomas 123 wrote: »

Okay so we are forgetting the drastic rise in house prices and wage stagnation on this thread - noted.

Well, if that had been in your post we wouldn't have! You can't expect posters to join dots that are only in your head!

thomas 123

is_that_so wrote: »

Well, if that had been in your post we wouldn't have! You can't expect posters to join dots that are only in your head!

Would you believe - it’s not a big secret.

Bobtheman

I can't believe the poster thinks this. The op.
We have the second highest mortgage rates in the EU because the government won't move on arrears.
There is of course the fact that tracker mortgages ain't profitable by the banks. A lot of people got those in later stages of the boom
The state has also failed to keep social housing going even to start it again properly.
Why? I'm not so sure.
The state takes 60k off every house built.
It would immediately inject supply if the builder was told to take 60k off every house he builds with certain price guarantee. A mechanism could be found

Amazing what this state can do if it has a mind to do it.

is_that_so

Wanderer78 wrote: »

its been clearly obvious for many years now, even pre 08, that something catastrophic is failing in regards property, we havent reacted to these failures at all, in fact we ve been trying to default to previous failed approaches.....

Part of that is ingrained though as many of us will not embrace apartment living, a prerequisite for greater density and keeping people closer to amenities and work.

Wanderer78

is_that_so wrote: »

Part of that is ingrained though as many of us will not embrace apartment living, a prerequisite for greater density and keeping people closer to amenities and work.

apartment living is only for some, but not for all, i know i personally couldnt do it, i require space, peace and quiet, and a garden is critical also, we re clearly experiencing much deeper problems in regards property

thomas 123

is_that_so wrote: »

Part of that is ingrained though as many of us will not embrace apartment living, a prerequisite for greater density and keeping people closer to amenities and work.

A house in the countryside and an apartment in any city in the country are fairly similar in price to be fair.

Look on daft, look at cork or limerick, or even Dublin - how many apartments are for sale and for how much?

is_that_so

Wanderer78 wrote: »

apartment living is only for some, but not for all, i know i personally couldnt do it, i require space, peace and quiet, and a garden is critical also, we re clearly experiencing much deeper problems in regards property

That is fair enough but if we want to address the huge low density problem and providing that 15 minute city idea more will need to.

Bobtheman

But one thing I'd like to say is that it was never ever easy to buy a house in Ireland bar the boom
We have had a dysfunctional housing market since about 1998.
Before that you had to get on your hands and knees to get a mortgage. The banks only really began moving into mortgage lending in the 1990s. Before that it was mainly building societies.
High mortgage rates and unemployment in the 1980s.
There is a huge sense of entitlement for those under 35. In my day we were never sure we'd own anything. The spectre of forced emigration was always there.
If you went bankrupt it was a 12 year process.
So let's stop Pretending this generation has it the hardest.
Ireland has generally been a poorly managed state that gets by with foreign investment. Pure and simple.

is_that_so

thomas 123 wrote: »

A house in the countryside and an apartment in any city in the country are fairly similar in price to be fair.

Look on daft, look at cork or limerick, or even Dublin - how many apartments are for sale and for how much?

Yeah, but that's a different planning issue and cost.

Wanderer78

is_that_so wrote: »

That is fair enough but if we want to address the huge low density problem and providing that 15 minute city idea more will need to.

what if we dont want to, who said we all do? a critical element of property is the emotional needs for its occupants, this is regularly omitted in such debates