# Mortgage for how many times your salary these days?



## tronman (19 Aug 2010)

Hi all,

Myself and my wife are looking to go for a mortgage in the next year. Assuming we have no loans, debts, etc by that stage and with a joint income of 60k, what type of mortgage would be qualify for do you think? We're First Time Buyers. I've seen posters on here mention that banks will only give out 2.5 times your salary, but on calculators such as Permanent TSB you can see 4 or 5 times mentioned. We're hoping to buy a house in the region of 310k so with a 25k deposit that will leave us needing 285k to borrow. Getting worried now seeing figures like 2.5 times! Do you think we have a chance of getting what we need?


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## NorfBank (19 Aug 2010)

How much are you paying in rent each month? How much are you saving on top of that?


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## JohnJay (19 Aug 2010)

BOI and AIB recently approved me in principle for between 4 and 4.5 times my salary (Single application). I am now waiting for a loan offer from AIB for less than I was offered (about 4 times my salary) as I dont need the full amount for the property I am buying

Edit: the figures you are giving above say that you will need close to 92% mortgage. This will limit you to fewer borrowers as most lenders will now only give 85/90%


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## fizzelina (19 Aug 2010)

We got only 90% mortgage could not get more, and it was 2.5 times our joint salary. Like you we had no other debts or loans.


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## ncr (19 Aug 2010)

Why not check out loan finance from your local authority - their variable rate is 2.812% incl mortgage protection insurance. I've taken the info below from the Department of the Environment's website.  However, the maximum house purchase loan available is €220,000.  You should also check with a broker if you qualify for a home choice loan - a Government initiative to help first time buyers who cannot get sufficient loan finance from the main banks.  Check out the home choice loan website.

To be eligible to apply for a house purchase loan, the applicant(s) must be:

A first time buyer  (as defined by Section 92B of the Stamp Duties Consolidation Act, 1999 (as amended) i.e. a person, (or, where there is more than one buyer, each of such persons)):
who has not on any previous occasion, either individually or jointly, purchased or built on his/her own behalf a house (in Ireland or elsewhere) and
where the property purchased is occupied by the purchaser, or a person on his behalf, as his/her only or principal place of residence and
where no rent, other than rent under the rent-a-room-scheme, is derived from the property for five years after the date of the current purchase.

Aged between 18 and 70 years;
Earning under €50,000 as a single applicant and under €75,000 as joint applicant;
In the case of the primary earner on the application, in continuous employment for at least two years (this can be self employment) and the second applicant must have at least one year. Certain exceptions can be considered; and
Have been refused a loan by both a bank and a building society.


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## TonyD (19 Aug 2010)

I think it all depends on your wages, you have your net pay of €2,000 say and how much of that can make up your mortgage repayment, ideally around 33% I believe, but things seem to changing every day. But good luck with the search and the ultimate purchase.


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## tronman (20 Aug 2010)

Hi,

Rent is 1000 per month and saving about 1000 per month on top of that.




NorfBank said:


> How much are you paying in rent each month? How much are you saving on top of that?


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## Maynooth (20 Aug 2010)

Why are you worried you will only get 2.5 times salary? You should be over the moon about this. 

If the banks use that as a rule then the house you othewise would be paying 4-5x salary is now going to sell for 2.5x salary.


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## NorfBank (20 Aug 2010)

tronman said:


> Hi,
> 
> Rent is 1000 per month and saving about 1000 per month on top of that.



Grand, you are proving you have repayment capacity of €2000 per month.
€285,000 over 30 years stress tested at 6% would have a monthly repayment of €1708 per month before tax relief. Congratulations you have passed the first test for mortgage approval!

If the rest of your application is strong e.g occupation, credit record then you should be fine for the €285k you need.


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## anuj21k (20 Aug 2010)

Be very careful before buying house in near future, reason:
1- Economic recovery is slowing and fear of double-dip is still looming.
2- Don't rely on all these calculators, think about your individual case yourself. Have you taken into a/c growing family once you have kids, one of yous losing job and future expenses.
3- I think if you can hold off for couple of year you will probably save 20-25% of current asking price.

Think before you commit yourself into something you regret later.
Best of luck.


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## queenlex (20 Aug 2010)

anuj21k said:


> be very careful before buying house in near future, reason:
> 1- economic recovery is slowing and fear of double-dip is still looming.
> 2- don't rely on all these calculators, think about your individual case yourself. Have you taken into a/c growing family once you have kids, one of yous losing job and future expenses.
> 3- i think if you can hold off for couple of year you will probably save 20-25% of current asking price.
> ...


 
+1


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## selenak (20 Aug 2010)

+1


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## VOR (20 Aug 2010)

tronman said:


> We're hoping to buy a house in the region of 310k so with a 25k deposit that will leave us needing 285k to borrow.





JohnJay said:


> the figures you are giving above say that you will need close to 92% mortgage. This will limit you to fewer borrowers as most lenders will now only give 85/90%



This is an important point. A 92% mortgage will require a deposit of €24,800 out of your €25K. Then you have legal fees of at least €1200 more and you have to furnish the place (unless you get really lucky with a NAMA builder!)

Do you have additional savings built up or will all your savings go on the deposit? As anuj21k said there are other expenses to consider once you move in.


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## tronman (20 Aug 2010)

Hi,

We have some furniture already and we're hoping to get a newer build so repairs will be minimal. We also have a baby, will this reduce what we will qualify for? We will save a couple of grand extra for legal fees, etc.

What is the tax relief NorfBank?


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## tronman (20 Aug 2010)

Maynooth said:


> Why are you worried you will only get 2.5 times salary? You should be over the moon about this.
> 
> If the banks use that as a rule then the house you othewise would be paying 4-5x salary is now going to sell for 2.5x salary.



Hi,

I'm not sure what you mean mate? The thing is if we're only getting offered 2.5 times that would be 150k, and theres no houses that have dropped that much


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## Maynooth (20 Aug 2010)

If the 2.5x times joint salary becomes the norm like before then logically the average semis will be pitched at this price. Prices got out of control because lending got out of control.


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## tronman (20 Aug 2010)

Maynooth said:


> If the 2.5x times joint salary becomes the norm like before then logically the average semis will be pitched at this price. Prices got out of control because lending got out of control.



Let's hope so but prices would have to half from the current asking prices which I can't see happening TBH.


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## Maynooth (20 Aug 2010)

tronman said:


> Let's hope so but prices would have to half from the current asking prices which I can't see happening TBH.



Well if the banks aren't going to lend above what they historically did then who is going to buy houses for more than that?


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## Chris (23 Aug 2010)

Maynooth said:


> Well if the banks aren't going to lend above what they historically did then who is going to buy houses for more than that?



Absolutely right! This is basic economics of supply and demand. The media and politicians are telling the public that demand is so low because of "uncertainty" in the market, and especially politicians are jumping on this in order to justify further interference in the property market.
Unless people suddenly reveal huge hidden pots of savings, or there is a massive economic recovery, or banks go on a sudden lending spree there is not going to be a stop in the fall of house prices.


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## Caveat (23 Aug 2010)

tronman said:


> Hi,
> 
> I'm not sure what you mean mate? The thing is if we're only getting offered 2.5 times that would be 150k, and theres no houses that have dropped that much


 
I'm not sure what _you_ mean - there are loads of houses for less than 150K at the moment. There are loads for less than 100K.


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## noel_c (23 Aug 2010)

Caveat said:


> I'm not sure what _you_ mean - there are loads of houses for less than 150K at the moment. There are loads for less than 100K.


Depends where you're looking to buy. OP seems to be looking in Dublin. Daft has 7 _houses_ in Dublin region less than 100K, some of those are derelict.


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## Vega (23 Aug 2010)

anuj21k said:


> Be very careful before buying house in near future, reason:
> 1- Economic recovery is slowing and fear of double-dip is still looming.
> 2- Don't rely on all these calculators, think about your individual case yourself. Have you taken into a/c growing family once you have kids, one of yous losing job and future expenses.
> 3- I think if you can hold off for couple of year you will probably save 20-25% of current asking price.
> ...


 
+1 

In answer to your question though, I was pre-approved for over six times my salary last year (in writing) but obviously I'm not insane enough to want to get into that much debt. Checked again this year and it's down to about 5.4 times my salary but they said on the phone they might be able to give a little bit more than that, whatever than means. Going to stay renting for a while anyway.


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## Caveat (23 Aug 2010)

noel_c said:


> Depends where you're looking to buy.


 
Yes, but...



> OP seems to be looking in Dublin.


 
I don't see any evidence of that in the thread.


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## tronman (23 Aug 2010)

Yes we're looking to buy in Dublin, I should have mentioned that earlier. You don't get a shoebox in Dublin these days for that price! I'm not overly concerned about can we afford 5 times our salary because I think we're ok on that count, the main thing is can we get approved for the amount for the type of place we want to live in.


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## noel_c (23 Aug 2010)

Caveat said:


> I don't see any evidence of that in the thread.


A quick glance at the OP's other recent threads would give you the context. Only four 3 bed houses on Daft in Santry for less than 250K, not a great selection.


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## Caveat (23 Aug 2010)

tronman said:


> Yes we're looking to buy in Dublin


 
OK, fair enough, that answers that then.

I would have thought though that around the 150 - 180K mark might get you something reasonable? Dublin 8 maybe or Kimmage? Areas like that. Not sure, been a long time since I lived in Dublin.


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## tronman (23 Aug 2010)

Yes Santry is one area of interest but we're open to anywhere on the North side of Dublin. Know you haven't lived in Dublin for a while but even 180k won't get you anything I'm afraid. 3 bed house on the North side in a decent area (not looking for uber-expensive parts like Malahide or the likes) would be what the doctor ordered.


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