Mortgage Refused - Gobsmacked!

[sadie]

They are lending responsibly to families with children, but still lending far too much to first time buyers (in my view). We were told by the first person we could get 130k so that's what we asked for. We only want 100k over 25yrs which would be around 550 a month (give or take). We are currently paying 700 in rent per month, which we are still finding difficult I might add that's why I want the smallest mortgage we can get away with to still keep some savings for emergency.

 

[Bubbles34]

OK, this is wrong. They approved you on a mortgage that you are not going to be able to repay. This is what got us in trouble i the first pace and it is dishartening to see that AIB is now lending governament money at a loss...

Cheers,

nadnerB

why would he not be able to repay that exactly?

 

[michaelm]

We're single-income (five kids) and keeping an eye out for a house in a specific area with a view to trading-up. I might be looking for up to 5x gross salary . . but this thread has put a slight dent in my steely confidence.

 

[Kemo_Sabe]

sadie, the banks are doing you a favour

if your target home is 275 now (200 savings plus 75k mortgage), it'll be less than 200k within the next two years. You won't ever need a mortgage.

sit tight and good luck

 

[sullivk]

That does seem a bit strange! I got my mortgage approval in principle for €180k yesterday from AIB.
I'm single, earn €36k per year and have 1 child. It is over 35 years though so maybe that's why!

 

[Yellow Belly]

That does seem a bit strange! I got my mortgage approval in principle for €180k yesterday from AIB.
I'm single, earn €36k per year and have 1 child. It is over 35 years though so maybe that's why!

Don't count your chickens unfortunatley AIP's (approval in principle) isn't worth the paper it is printed on. You are never sure of anything until you get your full loan offer sanction received by your solicitor.

Just be careful- many banks at the moment are declining loans trying to get full loan offer even though they have been previously AIP'd.

 

[Mr DT]

We only want 100k over 25yrs which would be around 550 a month (give or take). We are currently paying 700 in rent per month, which we are still finding difficult I might add that's why I want the smallest mortgage we can get away with to still keep some savings for emergency.

You are finding rent of 700 difficult. Then I would suggest you will find the costs of owning a house with a 500 per month mortgage difficult. (+ Insurance, life insurance, maintance, making it your own etc)

Hence this could be the banks problem?

 

[nadnerB]

why would he not be able to repay that exactly?

Simply because they are lending this customer a 5.72 multiplier of his salary that is evidently irresponsible lending.
Considering that the money they are lending is my money too, I am entitled to be angry about it. Anything else?

Cheers,

nadnerB

 

[sadie]

Re: Mortgage Refused - Gobsmacked! -Update

I'd originally posted here about being refused a mortgage outright by one Bank - single income family, 2 kids, salary 40k.
We successfully applied for and got approval from another bank in the meantime for 100k (2.5 x income). That's full approval for 3 months having submitted all the documents etc.

 

[Robbie_C]

I see how it may seem like dicrimination but an important factor to remember is that the 200K savings does not come into the equation at all. The reason for this is that if you had €2million in savings but you were committed to spending the €2 million on top of the mortgage then as soon as you trade up the €2 million is gone or in this case the €200k is gone and basically what you are left with is a one income family with 2 kids paying back a mortgage. The bank is assesing the ability of the one income approx €40K to repay the mortgage as the €200k will be gone as soon as you trade up.

I can understand this from the banks point of view, giving the current climate but I do sympatise with your situation and im sure some banks wil help you out.

 

[Bronte]

Re: Mortgage Refused - Gobsmacked! -Update

I'd originally posted here about being refused a mortgage outright by one Bank - single income family, 2 kids, salary 40k.
We successfully applied for and got approval from another bank in the meantime for 100k (2.5 x income). That's full approval for 3 months having submitted all the documents etc.

That's great Sadie, well done. If you're going for variable keep an eye on the rates and fix before they go up again as these extraordinary low rates won't be with us forever. If on variable and you can afford more than the 500 a month try and chip away any extra you have. It can be a better way of saving.