Mortgage denied, have we any hope?

I

Irishman2000

Registered User
Messages
9
Base Information

Joint application
~205k property value with ~185k mortgage over 29 years
22k in savings and counting
Ages 33 and 39
Both private sector employment, one full time one part time, both permanent for 5ish years
1 child,
No court orders or judgements
One loan in my name approx 3k remaining, due to be paid off later this year monthly is €290 but shares to be used to pay off early (credit union)
One credit card, paid off in full every month, never missed a payment
Savings of minimum 1450 every month for the last 8 months identified
No overdraft issues
Applying directly to bank

Our Story
After jumping through hoops the last 2 months getting documents and employers letters the bank informed us a few weeks ago that there was an unpaid loan on the wife's ICB report, they asked for an explanation in order to progress

After more hoops being jumped through we discovered it was a loan taken out by the wife in 2009, less than €500 of which went unpaid

We eventually tracked down the loan provider and repaid them yesterday, found out that it was a loan she thought was paid off relating to an interest free laptop bought from Harvey Norman

We sent proof of this on to the bank who subsequently denied our mortgage on the basis of the above €500 discrepancy in our credit report

Is it worth appealing on the basis that it was such a small amount from over a decade ago that was essentially forgotten about?

If not, will we have any chance of getting a mortgage before this gets removed in 5 years time?
 
Oh! Sweet Lovin' Joseph! - Default on a repayment process for a laptop €500.00* which subsequently was paid in full. A couple gets blacklisted for a mortgage of just €185K and has to wait five years before the blacklisting is wiped and restart the process.

If this is where we are, after all of what the country has gone through over the past fifteen years it's no wonder most find our financial institutions to be as unsympathetic as a cobra getting ready to kill.

*I can't believe the amount we'd easily spend on a mid week four star break could prevent a couple for getting a relatively small mortgage.
 
That’s ridiculous. I feel for you. It must be very frustrating. Worth highlighting this case study to your local at TDs perhaps? And Pascal Donohoe and Michael McGrath. What have you got to lose?? Also email Charlie Weston in the Indo.
 
Pay off the remainder of the CU loan. Wait a month, and apply for your CCR report (not the ICB one!), and make sure both loans appear paid, and that there's nothing else outstanding that you don't know about. Then start the application again. Either go through it with a mortgage advisor in the bank, or via a broker, but include an explanation for the loan being unpaid. Don't ignore it hoping they won't notice it. "I forgot about it" won't cut it as an explanation.

There are thousands of these small loans showing up since CCR was introduced, and causing headaches for people, so the banks are used to seeing them. Worst case you'll need to wait 2 years to apply, but for a small loan like this, with a valid explanation, you should be able to get a mortgage.

Despite what other posters might say about lenders being evil- would you lend your money to someone who just didn't bother repaying a loan in the past?
 
I don't think anybody said "lenders being evil" and would I "lend money to someone who just didn't bother repaying a loan in the past?"

I would and I have.
 
"computer says no". The discretion open to advisors in banks has been greatly reduced in recent years, common sense is out the window. Find a good brokerand you should be ok
 
Peanuts20 said:
The discretion open to advisors in banks has been greatly reduced in recent years
Click to expand...
Fully agreed. But whether you go to a advisor in the bank, or a broker, it's going to be the same underwriters that make the decision. It's about getting the explanation into the cover letter that the underwriter sees that's key.
 
Can't believe the OP has 3K outstanding while having savings of 22K. I would never say you wife had forgotton to repay the €500, say you wife had repaid and was unaware that was not the case. Go to a broker who should be able to help you navigate this. RedOnion has given you excellent advice.
 
Just for a bit of background on that, we could pay the loan off but we want to keep the deposit money so it's a delicate balance, and we are within the stress test so were advised not to pay it off unless the underwriter specifically wants us to


Thanks for all the replies everybody, from the positive responses it looks like our mortgage application isn't over yet, it's much appreciated
 
RedOnion said:
Out of interest, who advised not to pay it off?
Having personal loans outstanding can weigh heavily on affordability calculations. But understandable that you need to have the 10% deposit.
Click to expand...

The mortgage advisor, exactly as you say the deposit and not 'dipping' into savings looks good also - unless it's requested by the underwriter of course
 
Surely the €500 loan was only the tipping point and not the sole reason your rejection. Are you already at the limits of loan to income ratio of 3.5?

You don't mention your joint income but there seems to be a bit of a disparity between only having €22k in savings and currently saving €1450/m. Is the €1450 your affordability (i.e current rent + savings).

How time critical is the purchase? Can you wait 6 months, clear your current €3k loan and go to a broker instead who can paint your application in a more positive light?
 
_OkGo_ said:
Surely the €500 loan was only the tipping point and not the sole reason your rejection. Are you already at the limits of loan to income ratio of 3.5?

You don't mention your joint income but there seems to be a bit of a disparity between only having €22k in savings and currently saving €1450/m. Is the €1450 your affordability (i.e current rent + savings).

How time critical is the purchase? Can you wait 6 months, clear your current €3k loan and go to a broker instead who can paint your application in a more positive light?
Click to expand...

Yes the €500 unpaid loan is the only reason it was rejected, I'm not going to get into the personal details, but thanks everybody for the tips
 
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