Combined salary: €53k; AIB will lend us only €44k

[tommyryan55]

Hello everyone,

I recently attempted to switch from PTSB (3.80%) to AIB (3.10), here are some of the fact and figures and the result.

Me:

Private Sector

Gross Salary: €29,000

Overtime: €2,500 approx (not guaranteed but regular)

Bonus: €1,300 (not guaranteed but regular)

VHI: Mine paid for, €1,000 towards my dependents


My Wife:

Civil Service

Gross Salary: €23375, on max salary scale of €38,000

2 Children under 4 in full time crèche.

Bought our house for €115,000 in September 2013, mortgage taken was €92,000 (LTV 80%).

I have been over paying our mortgage so at present the balance is approx. €73,000. I asked AIB for €70,000 as the value of our house would be approx. €140,000 now.

We have no debt besides our mortgage, we save on average €400 a month, our childcare costs are €850 a month.

Now I knew it would be tight with AIBs net disposable income rules but after 3 weeks of “assessment” they offer us an amount of €44,000.

So if you have children and a modest income forget about switching, as the likes of AIB treat childcare costs as if they were a loan.

If I left my children with relatives and spend the childcare cost of drink, clothes, etc we would get the mortgage amount we asked for!! In the words of AIB we had a “strong applications its just the net disposable income rules”

Regards


T

 

[gnf_ireland]

Yes @tommyryan55 I have mentioned this previously in a number of posts on switching numbers. I genuinely believe those who are in the early stages of family life will struggle to switch due to child care costs. Same applies to those who start a family before applying for a mortgage !

Some have suggested here that the assessment needs to be more scientific. Someone who has had a mortgage for 5 years (for example) and not missed a payment should be classified as a lower risk than someone who has never had one (all other things being equal). I believe the risk assessment by lenders in Ireland could be improved dramatically, relatively easily !

Sorry to hear about your situation though. You will probably need to wait until the kids start school and the childcare bill reduces somewhat

 

[Bronte]

What I get from this is don't tell them you is for childcare and say granny is minding them for free. Classical case of needing to know what the banks want on their forms before you apply.

 

[sonandheir]

Hi Tommy, I have tried to switch and have no childcare costs(mrs heir minds them so her income is affected) I have a rock solid mortgage and have overpaid by €20,000 in last 3 years. Ltv would be close to 50% now, tried several banks, no joy. I've 4 small kids.

I'm trying to leverage ptsb to give me one of their fixed rates for new customers (I've told them I'm ready to switch AIP with several banks etc ). Not getting much traction though, keep getting told they are reviewing rates and will contact me soon with offer. I won't hold my breath.

 

[tommyryan55]

What I get from this is don't tell them you is for childcare and say granny is minding them for free. Classical case of needing to know what the banks want on their forms before you apply.

.

Unfortunately the creche fees are paid by standing order, cash payments are not accepted. If I reduced my 4 years olds hours and got my mother to mind her for a month of so AIB suggested they could proceed, hardly long term underwriting in practice.

 

[tommyryan55]

Hi Tommy, I have tried to switch and have no childcare costs(mrs heir minds them so her income is affected) I have a rock solid mortgage and have overpaid by €20,000 in last 3 years. Ltv would be close to 50% now, tried several banks, no joy. I've 4 small kids.

I'm trying to leverage ptsb to give me one of their fixed rates for new customers (I've told them I'm ready to switch AIP with several banks etc ). Not getting much traction though, keep getting told they are reviewing rates and will contact me soon with offer. I won't hold my breath.[/QUOTE

Do you mind me asking what other banks you applied to?