# Salary of 35k Gross has been approved for a 280k mortgage



## Kerrigan (14 Jul 2012)

I origionaly posted this question in the wrong forum.

My son has been approved for 280k mortgage. He is a sole purchaser. The property is based in West Dublin.  I am not overly happy with the purchase as I think it is too large a mortgage for somebody on my sons salary.  

What are your thoughts please?


----------



## alexandra123 (14 Jul 2012)

That's an extremely large mortgage for that size salary. How many years is the repayments over ?


----------



## Kerrigan (14 Jul 2012)

I thought so too.  The repayments are over a 30yr period.

I am not a happy camper and have told him so.  Whether he listens is anyones guess.


----------



## alexandra123 (14 Jul 2012)

I dont think that is sustainable either. It is mad to give him that much money. It seems like their was no stress tests done. Maybe you should report the bank in question to the financial regulator..


----------



## Eithneangela (14 Jul 2012)

What I find amazing is that any bank is lending that kind of money at the moment, unless we're all being fooled by the reports in the media that neither potential home-owners or small businesses can get any kind of a loan. Did your son have a large deposit towards the house, was the price he paid the current market rate, is he in a 'secure' job - loads of questions here for any lender.


----------



## serotoninsid (14 Jul 2012)

Eithneangela said:


> What I find amazing is that any bank is lending that kind of money at the moment


+1 - I thought they had gone to the other extreme.....??

@ OP:  Please direct him to this thread.  In addition to this thread - direct him to the numerous 'money makeover' threads - showing the debt-ridden hell many people have found themselves in post-boom.


----------



## Kerrigan (14 Jul 2012)

I am meeting up with him tomorrow so I will update this thread with more details.  He has a deposit of 30k.  The house is in a west Dublin suburb.  Price also seems uber expensive.  He is also self employed.


----------



## twofor1 (14 Jul 2012)

Kerrigan said:


> What are your thoughts please?


 
On a gross salary of €35K, your son probably takes home around €2325 monthly, his monthly repayments on this mortgage @ 4% over 30 years would be €1337, and @ 6% repayments would be €1679 monthly.

Maybe he doesn’t need a car, private health insurance or pension, social life or holidays but from what’s left of his take home pay he will definitely have to pay for mortgage protection, insure and maintain the house, pay the utility bills, mobile, household charge, food, clothes, medical, dental, travel costs, and I’m sure lots of other miscellaneous expenses.

Even allowing for a lodger it’s a wild and irresponsible amount to lend on that income.


----------



## Dermot (14 Jul 2012)

There is something not right about all of this.  I am totally surprised at this multiple as I would imagine the Financial Regulator would be. There has to be some mistake somewhere.  Will he give you all the paperwork details when you are talking to him. They are giving almost 93% of the purchase price and 8 times his salary over 30 years at what rate. The rates will go up in the medium time.  What is it valued at?.  This will certainly end in disaster for all concerned if it is allowed.  I still cannot believe it and I have more than a passing interest in property.  Good luck to you when talking to your son


----------



## Gooner84 (14 Jul 2012)

Myself and my partner are in the middle of purchasing a house, combined gross income €44k. The most the bank would give us was €110k. We had 20k in savings so I find it hard to believe he has actually being approved for that.

When I was shopping around a broker told us we would get a mortgage for between 180k & 200k no problem with the same bank which offered us the €110k.


----------



## serotoninsid (15 Jul 2012)

Gooner84 said:


> Myself and my partner are in the middle of purchasing a house, combined gross income €44k. The most the bank would give us was €110k. We had 20k in savings so I find it hard to believe he has actually being approved for that.



That sounds more familiar of what has been posted up here in more recent times.  Can the OP divulge the particular bank that's offering this?


----------



## Greta (15 Jul 2012)

Is your son a doctor? A doctor on a modest salary at the start of his career was able to get a huge mortgage with little or no deposit in the crazy boom years, because banks expected doctors' salaries to go up a lot. Even then, 8 times gross salary was a push, but now it seems incredible.

Why is he taking such a huge mortgage, it must be possible to get a house for a lot less than that now, without putting himself at risk of financial ruin in not too distant future.


----------



## ryaner (16 Jul 2012)

Dermot said:


> There is something not right about all of this.  I am totally surprised at this multiple as I would imagine the Financial Regulator would be. There has to be some mistake somewhere.  Will he give you all the paperwork details when you are talking to him. *They are giving almost 93% of the purchase price* and 8 times his salary over 30 years at what rate. The rates will go up in the medium time.  What is it valued at?.  This will certainly end in disaster for all concerned if it is allowed.  I still cannot believe it and I have more than a passing interest in property.  Good luck to you when talking to your son



That really only leaves AIB as all the others have been lowering the percentages they will lend out. 
Still at 8 times gross there is either something the lender knows that we don't, or they are trying to approve stupidly large mortgages to hit their targets. That amount of mortgage lending they promises was based on approvals, not drawdowns.


----------



## flattea2 (16 Jul 2012)

Self employed/Mortgage at 8 times salary?

Madness.

Can you name the bank?


----------



## Spear (16 Jul 2012)

ryaner said:


> That really only leaves AIB as all the others have been lowering the percentages they will lend out.
> Still at 8 times gross there is either something the lender knows that we don't, or they are trying to approve stupidly large mortgages to hit their targets. That amount of mortgage lending they promises was based on approvals, not drawdowns.



I would be amazed if it was AIB. I got a mortgage with them last year and had to jump through near-impossible hoops.


----------



## Brendan Burgess (16 Jul 2012)

Spear said:


> I would be amazed if it was AIB. I got a mortgage with them last year and had to jump through near-impossible hoops.



In the past, AIB have lend much lower multiples of salaries than other lenders. 

I hadn't heard that they had relaxed these criteria.

I suspect that the son might not be telling his mother/father the full story.


----------



## ryaner (17 Jul 2012)

Getting approval and actually drawing down are very different things these days. Once your wages and expenses fall inbetween certain numbers, it seems easy enough to get the approval, then when you go to draw down they start looking for 3 months accounts, explanations of what transaction X is, where this transfer into the saving account came from, etc.


----------



## Ireland.1 (19 Jul 2012)

+1

I cannot imagine any bank lending this sort of money in todays day and age.  Something seriously wrong here.  With out sounding like a snob are you sure there are houses in west Dublin fetching that kind of money today?  

You asked in a previous thread what Palmerstown was like, so I'm presuming your son is looking to buy there???  This does not seem like a sensible deal.    

During the crazy years of the suppossed boom, myself and the other half had a combined income that was less than what our son is taking home now.  We were offered a mortgage a lot greater than 280k.  It was the biggest mistake of our lives, we are indebted and in multiples of thousands of Euro of negative equity.  Discourage him before he makes the same stupid decision we did.


----------



## rustbucket (19 Jul 2012)

Brendan Burgess said:


> In the past, AIB have lend much lower multiples of salaries than other lenders.
> 
> I hadn't heard that they had relaxed these criteria.
> 
> I suspect that the son might not be telling his mother/father the full story.



+1

I imagine if he is getting that kind of mortgage he must be earning more than 35K


----------



## RichInSpirit (7 Aug 2014)

If your son has the nerve and the bank the willingness to lend for this house it might be the best purchase of his life.
Ie.  The bank mustn't see the price dropping in the near to medium future. He would also be buying into a rising market. Your son could be looking at positive equitiy in the next couple of years if not immediately. 

On the other side of the equation I wonder if the bank in question have any financial stake in the house.? They could be the developer's banker for example or be the seller's banker.


----------



## peteb (7 Aug 2014)

you realise this thread is 2 years old??


----------



## Steven Barrett (7 Aug 2014)

peteb said:


> you realise this thread is 2 years old??



Ha! Ha!  I was saw it and just read the July date, never bothered with the year. I wonder how he got on...


----------



## bugler (7 Aug 2014)

It is very unlikely that the simple facts as stated in the OP were actually true (I am sure Kerrigan was reporting it as he heard it in good faith). No one was offering 8 x gross salary in 2012.


----------



## RichInSpirit (7 Aug 2014)

peteb said:


> you realise this thread is 2 years old??



 But out of curiosity did the house increase in value since?


----------



## mandelbrot (7 Aug 2014)

RichInSpirit said:


> But out of curiosity did the house increase in value since?


 
Well obviously it did, if it's in Dublin!! Not sure how that's relevant though...!


----------

