# Refused mortgage, what to do?



## Catherine1 (27 Feb 2013)

I have just been refused. 

I think we should go speak to the bank and have a sit down to find out what they want. The application seemed good and we were looking for a small amount. Would having a meeting with the manager achieve anything? Would he at least steer us in the right direction? It is aib and I have read they just do not loan to first time buyers..........,

OH is in bits and wants to give up. I am not so fast to give up and want to know exactly why and what can be done to fix it.

House valued at. 150, got it at 120. 50k deposit. Permanent job in IT at 37k a year. No kids or dependents.

And I have to say it is annoying me. This man saved for his education while his friends were taking on mad boom mortgages. He is truly mister sensible. He saved enough to put himself through four years of college anD buy a car. 27 grand with change. 

He is looking for a small mortgage now for a house for life. 

Makes me far less sorry for those who bought in the boom I can tell you.


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## Bronte (27 Feb 2013)

How many banks did you apply to?  Which bank has refused you.


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## wbbs (27 Feb 2013)

Have you had a look at your ICB report in case there is anything obvious there that may have affected it,   Maybe there is nothing on ICB if he has never borrowed, oddly enough this can be a disadvantage.  Did you try B of I or UB?

It sounds like a reasonable proposition however bank may not tell you the reason for refusal, manager's have practically no say in lending anymore, mainly decided centrally these days.


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## vandriver (27 Feb 2013)

What is net pay per month. Do you work?


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## Kev (27 Feb 2013)

Have got any kind of deposit to put towards the purchase.  The UK is not lending 100% mortgages to first time buyers until they have a 25% deposit and some banks are even asking for higher deposit of 25%.  Not sure if it is the same in Ireland.


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## dloob (27 Feb 2013)

Could be that the amount being borrowed is too small? I've heard of it happening before.


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## Dermot (27 Feb 2013)

Catherine 1. 

Try Bank of Ireland. Have every detail of your history in relation to savings, earnings, qualifications and your current living expanses. 

Are you currently renting and if so have proof of payment either in letter from Landlord or in your current bank statements. 

Have bank statements as far as they go back with you. 

Look organized when doing your interview with the bank. 

Is your partner on contract or permanent?

Have you any possibility of getting work or have you any particular qualification? 

From discussion with employees in AIB and BoI it would appear that BoI will give you a reason for refusal in their code of conduct. 

From my experience there are some very poor managers in AIB and I could back this up. 

Make an appointment with other institutions tomorrow and the best of luck to you.


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## Catherine1 (28 Feb 2013)

The mortgage is being taken out by him alone. We are engaged but not living together (unusual these days probably!). I am giving him the 50k towards the house. His record is impeccable to my eyes. I am out of work so useless lol. He had everything document wise and used a broker for ICS, KBC and AIB, his own bank. So far refused by ICS and AIB. KCB not happy but broker knows a girl there and persuaded her to have another look. ICS said it was refused because of no direct debit for his rent, which he pays in cash. AIB just said he couldn't afford it! But he has had a few complaints against them recently, for overcharging him here and there. As I said, this man is very sensible with his money!

Is it even wrt trying BOI now ICS have refused? Next week we are meeting with Permanent TSB and Ulster bank, in person. 

I think part of the problem is the 50k I am giving him, and not being a relative. I am hoping that by meeting us they will realise we are a serious, steady engaged couple. I think they all think the 50k is a loan he will have to pay back, but just are not saying that. If we meet them they will see my ring at least! I mean, why else would I do this? Will get a letter from my dad or have him on speed dial just in case lol. He is the one who gave me the 50k. 

Any other advice very welcome. Meeting with both next Wednesday. 

Thanks a million.


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## Catherine1 (28 Feb 2013)

Oh, and he got his ICB report and it is totally clean. His credit card is paid every month and his last loan was for 2k in 2006, and he paid it off early. On paper he is the perfect customer (and husband lol).


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## Dave Vanian (28 Feb 2013)

Catherine1 said:


> ICS said it was refused because of no direct debit for his rent, which he pays in cash. AIB just said he couldn't afford it!


 
Sounds like the issue could be no evidence of ability to make the monthly repayments.  If he pays his rent in cash, presumably it doesn't appear on the bank statements.  Does he have regular monthly savings appearing on the bank statements?  

If not, he'll need to set his rent up as a Standing Order and set his savings up as a monthly Standing Order and then try again in six months or more when he can show a history of being able to repay the proposed mortgage.


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## Bronte (28 Feb 2013)

There are two main issues here. 

The 50 K deposit is being provided by an unrelated party. There is a single applicant who is providing zero deposit, and is showing zero savings. There is an issue that the applicant will somehow 'owe' Catherine the 50K. Also an issue is does her 50K mean she has some kind of 'equity' in a property. 

Look at it this way Catherine, if he were to go ahead and purchase it and then you split up wouldn't you be angry and try and get your 50K back. 

Second issue is apparently lack of proof of monthly rent. You've been told this, but I think the real reason is the source of the deposit. Surely your fiance can prove by bank withdrawals, by lease, by receipts that he is in fact paying rent. I mean a landlord can easily confirm that he has received rent of x monthly on time for the last 6 months etc. 

Question for you. Why would you put up 50K in a property you will not own?

Just went back on this, the 50 source is even worse as it's coming from the OP's dad.  Second question for you Catherine.  Why would your dad lend you money to give to your fiance to purchase a house solely in your fiance's name?


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## wbbs (28 Feb 2013)

Not as clear cut as it first appeared.

I can now see where the bank is coming from and yes the deposit is certainly an issue.  Why are applying for mortgage in his name only?  I understand you are not employed and you would then become a dependant for the purposes of underwriting but it would help with the deposit issue.  

Where is the protection for you or your Dad in this?   This is what the underwriters are asking themselves.

Just noticed your reply on another poster's query, you can't wait to hand back the keys of your own property to bank!!!  Presume that is the reason for no joint application so. It gets less like a good prop for the bank by the minute.


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## Brendan Burgess (28 Feb 2013)

Surely if your father is giving you a present of €50k, you should be using it to reduce your own negative equity rather than giving a present of it to your boyfriend? 

Brendan


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## Luternau (28 Feb 2013)

I would second Brendan on using the 50k to fund your existing home Mortgage! 

*I have some questions;*

What about the house that was willed to your BF's father, who wishes to give it to your BF?
Could this house/site be sold?
Was bank told about that? 
(Perhaps there are concerns about tax liability on this-which is a draw on income?)
Do you live in your own mortgaged house at present?
Are you making any payments on this at present-perhaps Interest only?
Have you got a plan for dealing with this situation/property?
Could this not be both your homes-(if this is practical) rather than have your OH/BF paying rent to someone else?
Has he not got a rent book to prove outgoings?
The absence of any savings is strange if he is so good with money-did all this just go on a car?

*On the positive side;*

If you don't get the house you refer to, there will be other houses
You could both be happy in a rented house.
You could rent out your own house and live with OH


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## Brendan Burgess (28 Feb 2013)

Excellent points Luternau which prompt another issue...

If you gift €50,000 to your boyfriend, he will have to pay €11,500  CAT  ( 33% of  the excess over €15,000)

It is much better for you to lend it to him and then forgive the loan when you get married. 

But overall, he should be renting until he can afford to buy a house on his own. 

If you split up, how will he be able to repay the €50,000 to you? 

Brendan


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## Jim2007 (28 Feb 2013)

wbbs said:


> Just noticed your reply on another poster's query, you can't wait to hand back the keys of your own property to bank!!!  Presume that is the reason for no joint application so. It gets less like a good prop for the bank by the minute.



And another one:



Catherine1 said:


> My Bfs father was left a property by his uncle in the 80's. Probate was done but the deeds never transferred into his name. Now..... He needs to sell this property. It has been valued at 80k and the money is to go to his son, my bf. my question is regarding tax....... What needs to be paid and by whom? What is the best way to approach this, as the deeds are still in the name of the long deceased uncle of my Bfs father.....



So if the boyfriend is about to come in to around 80K and you have 50K, why the need for a loan at all... this whole think is starting to sound flaky!!!


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## Dermot (28 Feb 2013)

I totally agree with the last 7 posts.  It would be very helpful to everyone if posters originating a thread would give all the facts at the outset.  Catherine 1's thread being an example. Her BF's loan application looks quite different now than it did originally. Yes Catherine 1 has been frank in her answers as the thread developed but it would have helped if most of this information was given at the start. This is not a lecture to Catherine 1 as it happens quite frequently


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## Brendan Burgess (28 Feb 2013)

Hi Dermot

Will you draft a new Posting Guideline encapsulating all that? 

Brendan


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## Dermot (28 Feb 2013)

Will do that later on and I would be happy to it edited where it is found to be lacking in detail


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## AgathaC (28 Feb 2013)

Re new guideline, perhaps something like,'please include all relevant information', and give an example in the posting guideline of what is meant by 'relevant' information.


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## Catherine1 (3 Mar 2013)

*Rep*



Dermot said:


> Is this a single or joint application. Single
> Type of Property. 2/3 bedroom house/apartment. 3 bed house
> Value of Property 150k
> Amount of Mortgage 80k
> ...


Hope this helps to clarify things!


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## Catherine1 (3 Mar 2013)

I have replied to dermot's thread to the best of my ability. An awful lot of questions here but I will try to answer the main ones. I am not trying to tell lies, just looking for advice.
I am not on the application as I would be a liability. I am living in a house with negative equity of about 20k. It was a cheapie when bought in the boom for 114k. It was bought with my aunt who now has cancer, and she was the one who took out the mortgage of which I never saw a penny. I signed up for it though, obviously, and feel free to shout at me for my stupidity!
I live in Galway, my fiancée in dublin. I am a fully qualified teacher with a first class honours mastered degree, so employable of jobs were available in rural Galway. Hopefully closer to Dublin I would have a better chance of finding employment.
My OH pays rent to his Dad. He saves on average 6to7k a year. A mortgage of this size 500 to 600 a month would not be a huge problem for him, even without trying. The house is in perfect condition, and I have most of the furniture we would need.


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## Catherine1 (3 Mar 2013)

*Legal*

I did see a solicitor, and he agrees with you that I am mad to hand over 50k. But I trust this man and am happy with the arrangement.


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## Brendan Burgess (4 Mar 2013)

Hi Catherine

Did you trust your Aunt as well? Why did you sign a joint mortgage with her?  

In fact, the reason doesn't matter. You have a mortgage for which you are jointly responsible and you should prioritise the servicing of this mortgage. 

Brendan


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## Bronte (4 Mar 2013)

Catherine1 said:


> I am not on the application as I would be a liability. I am living in a house with negative equity of about 20k. It was a cheapie when bought in the boom for 114k. It was bought with my aunt and she was the one who took out the mortgage of which I never saw a penny.
> 
> My OH pays rent to his Dad. He saves on average 6to7k a year.
> 
> A mortgage of this size 500 to 600 a month would not be a huge problem for him, even without trying.


 
It's quite amazing how you left out these important details when looking for advice.

*Catherine's house with aunt*

The house you live in, who owns it? Who is paying the mortgage? Is it only your aunt on the mortgage? You mention your own financial circumstances are dire in the other thread. Yet you have 50K. You also mention that you cannot wait to hand back the keys? Can you clarify what you are trying to do?


*OH's application*

I presume the fact your OH is paying rent to his dad is part of the problem with the bank application. As in they don't believe he's paying rent at all. There are not many people who live at home and pay so much in rent?

He is on 37K, so 80K mortgage on that on it's own looks ok. 

Also you mentioned elsewhere that your OH is due to get 80K from a property of his father - is this also true?

Is it correct that out of the 150K house purchase, 50K is from you (via your father) and 20 K is from your OH. Also he is only employed a year and a half, does the bank have an issue with that?

*Gift of 50K - is it a good idea*

What is your logic for advancing 50K to your OH ? I realise he's your fiance but you could lose the 50K. Is the bank not asking about the source of this money? Do they not think it is odd? Do you not think your solicitors advice not to do this should be listened to? Do you think your solicitor has very good reasons for advising you not to proceed? 


Catherine for your own sake as you will be identified - please delete the references to the employer etc.


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## Brendan Burgess (4 Mar 2013)

Bronte said:


> Catherine for your own sake as you will be identified - please delete the references to the employer etc.



Good point Bronte. I have deleted it.


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## Catherine1 (5 Mar 2013)

*Thanks all*

For deleting stuff etc, and all the advice. To clarify, my dad offered me 50k to get a new home and start a new life with my fiance. He will not put that 50k into the house I currently occupy as it would be throwing good money after bad. So using the 50k to clear the current mortgage is not even an option. My dad wants to see me settled and happy, not stuck here miserable, basically. The money is not in my account but will be transferred on signing of the contracts to the new house. I trust my man, my dad clearly trusts him also. I don't see how that would concern a bank though? 
Yes, I trusted my aunt. It was not her fault she lost her job and got cancer. Woman doesn't even drink or smoke! The mortgage he is currently seeking would be possible, scraping all sides of the barrell, even if we were both unemployed. That is the whole point. I never want to be in this position again and want a home for life.


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## Bronte (5 Mar 2013)

Catherine1 said:


> He will not put that 50k into the house I currently occupy as it would be throwing good money after bad.
> 
> Yes, I trusted my aunt.


 
It's quite ironic Catherine that you already took a risk on property with a relation, your aunt, and lost. And yet you together with your father think it's a good idea to get involved again, with property, with a non relation. And to do this you have an amazingly convoluted trail of money. And you're wondering why any of this is the banks business. 

I do not understand your fathers logic at all. 

Wouldn't be a bit surprised if you're back on here in a couple of years asking how do you get the 50K of your dad's out of a house that neither he or you own.


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## Luternau (5 Mar 2013)

You don't need to own a property to live together. Why scrape the barrel to do so -your words. The solution is to rent in the short term.

You are going to have to deal with your current property problem. It unbelievable that you think you can just get married, move on and forget about it.


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## emeralds (5 Mar 2013)

I think you and your partner need to grow up and stand on your own two feet and not be relying on fathers to bail you out..


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## 44brendan (5 Mar 2013)

Some of the above comments are a little unfair to the OP, in my opinion
The boyfriend "trust" issue is something we all needed to address, when we decided that our partner was someone that we were prepared to spend the rest of our life with. i.e. my wife moved into a house owned by me in our initial years together and contributed to the mrtgage without ever having a direct interest in the property.
The purchase and joint mortgage with the Aunt was a mistake in hindsight. Like most property transactions at that time, it would have presented an opportunity to get on the property ladder. It was unfortunate that the Aunt became sick and lost her job. I don't see it as being fair to regard this as an example of "too much trust"!
The current property has negative equity attaching and Catherine has no interest in living there. Even as a Banker, I see no obligation on Catherine to apply the 50K gift from her father in reduction of the negative equity. This gift is too help her start a new life in a new location!!
From a tax/other perspective it would be advisable to put a legal agreement in place in respect of the proposed 50K contribution to the new house purchase. This could easily be set up by a solicitor and would formalise the arrangement as a loan rather than a gift. 
Finally BoI seem to be the most flexible mortgage lender at present. Your BF should give them a try. Worst case scenario is a refusal. Even then, it would not be the end of the world if he rented an independent property (not from his father) for a year or two and then re-considered the mortgage option.


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## The Oggster (6 Mar 2013)

I think you need to address your current property first. Is your Aunt still living there? Is it a joint mortgage with you?

If it's just in her name and she had to give up work through illness, does her mortgage insurance not cover repayments?


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## Catherine1 (10 Mar 2013)

*In principle*

Got the mortgage in principle. Thanks for all input and comments. I am not going to go into any more personal details. I will probably have a million more questions before the house is actually bought!


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