Are banks giving mortgages at the moment?

got a mortgage from AIB too FTB 2.4%apr fixed. 184k over 30years. income 34500 per year. funny thing is my broker couldnt get me it. had to go to AIB direct.
 
Yellow Belly said:
Guys the multiple of income is flawed- and has been proved to be so- that is why all lenders switched to the net income ration method.
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When my parents took out their mortgage in 1984, they also had a small loan from the credit union. The bank would not give the mortgage amount wanted untill that loan was repaid (i think in the end they were able to repay half and reduce the payments or extend the term etc to get the mortgage).
The bank was working on the multiple system but it also took other outgoings into account. This is what i and other propose should be used, you seem to think that the multiple system takes nothing else into consideration, you seem to be ignoring this point for your own agreument.


At what Mortgage interest rate ( including stress test) should you work out this 35-40%, they're currently around 3% but could well be in double figures at some stage in the future. Giving bigger loans at times when interest rates are low is not the way to have a stable property market. This partice got us into the trouble we are in and its better to have a correction now rather than trying to keep this bubble afloat. There will be pain, a whole lot, it will happen. It can either happen now or we can pass it on to the next generation.

Keeping the average house price at anything over 3.5 times average wage is keeping house prices inflated beyond what they should be. The last time i looked (couple of months ago) the multiple was 8.1 times and thats with the price reductions for the last few years.

Yellow Belly said:
In any event if you guys want people to have the ability to borrow only to 3 times income, you will effectively bankrupt the entire country.
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Your assuming that anyone has control of what happens in the market, no one has. Limiting mortgage borrowings will keep a stable market, i dont see it as a way of reducing house prices now, they are reducing anyway and will continue to reduce. It is very possible that in 3/4/5 years time, 3.5 times main and 1 times second may give a much higher amount that the average couple needs.

Yellow Belly said:
* Place every property purchased since 2001 in negative equity
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There is huge evidence that the property bubble started in 1998, if someone purchase in a bubble, then why cant they be in NE when the bubble busts. Also you assume that someone purchase in 2001 and still has the 2001 mortgage amount, not making any capital repayments.

Yellow Belly said:
*Reduce the pent up VAT due to the state by almost 50%- and boy could we do with the maximum revenue at the moment
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The vat amounts banded about by people like Tom Parlon are at the 2006 rates, those rates are long gone. The government does not have this money now and are not budgeting on it. Is it not better that the market starts to function again at a lower rate and the gov get something rather than nothing

Yellow Belly said:
*Force trade unions to seek massive pay hikes (so that their members might be able to buy a home)
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Come one now. Just think about that statement.

Yellow Belly said:
*Bankrupt every builder/developer/sub contractor/DIY store/Builders Provider & most probably all bank as well- indeed even the breakfast roll seller would go down!
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Again your looking at the ludicrously of the bubble years and can't see beyond them. We do have too many of all the jobs above and yes many will be cut. The market will never go back to producing 90k new builds in one year. This has to happen and will happen, all by itself.


Yellow Belly said:
To be honest this whole "reckless" lending issue is oversold at the moment & smells of "the bandwagon" approach.
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Ah i was wondering how long before this came up, whenever peoples eyes are opened to something, others will always argue that your jumping on the bandwagon. This argument have been made for ages and when i was offered over 400k in 2005 (when i earned an average wage) it was blatantly obviously to me, because i knew i would not be able to pay back that amount. P.s i did not take it.

Yellow Belly said:
If we assume that the "average" wage in Ireland is even €35,000 then at 3-4 times this amount i.e. €105,000-€140,000 where exactly are people going to find property to purchase? We have got to be realistic?
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An asset bubble usually takes the same amount of time to grow as it does to burst. If it started in 1998 and peaked in 2006 then theoretical it should be bottomed out in 2014. But most asset bubble bursting does not coincide with a world wide recession so it will probably be before 2014.
When the market is on the bottom, then we will see what an average earner can afford. The market normally over corrects on the way down.

Just for the record the average house price in 1998 was 103k in dublin (90k nationally). The average house bought was a 3 bed semi with very few shoebox apartments. The average house price in 2006 was 430k in dublin, including all those shoeboxes. The average wage was 32k.
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If you then note that the average wage in 1998 was 20k (22k was industrial) you find that that the 90k is spot on for the national figure (3.5 times main and 1 times second earner) and seen wages were always that small bit higher in Dublin 103k isn't really a huge jump.

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So really, why do people find it so hard to believe that property must come down to an affordable level, you are still living in a bubble. Banks are lending at a level they should, you just have to wait until you find a house at that level. Banks wont go back to the bubble lending levels, so property will have to come down to meet it. Its going to happen regardless of the banks.
 
LDFerguson said:
All lenders are obliged by the Financial Regulator to stress test applications.
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Sorry, had to laugh at this - is this the same Financial Regulator who allowed our banks to dig the country into a financial hole?

I wonder do they use the same stress tests now as in 2007 and previous years?
 
@Yellow Belly - the way I read your posts they seem exactly what I would expect from a VI. While I sympathise with anyone caught as a result of the implosion unfortunately you're talking a fair amount of nonsense.


In my experience this is false - I recently did some "research" as a potential customer - I approached banks directly and spoke with their mortgage advisors. All the banks I spoke to used the "multiple of income" method to assess my situation. In most cases it was 5 x income. In all cases they took current borrowings into consideration as well as family situation (i.e. kids or not) and savings plus saving history.

This post will be deleted if not edited immediately, I'm almost not surprsied to hear this from someone who worked in banking - 100% leverage on an asset that could fall in value? Seriously, are you for real?

With rates on the floor all the short sighted people are telling us there was never a better time to borrow. Maybe short term borrowings but it doesn't take a genius to realise that after the next rate cut there is only one place for them to go and that's up. So when Europe starts to recover and Ireland is still mired in the cr4p that's resulted from our over-reliance on property related income do you think the EU will give a sh!t about us when it comes to raising rates again? And watch the money markets further downgrade our rating as the government sleep walk us into bankruptcy.

Net result? You're 100% financed property drops in value, you have NE, rates rise and you can no longer afford the repayments - welcome to many peoples nightmare.


While I completely agree with you about investors the fact is 100% mortgages will prove to be just as big a problem when people can no longer afford to cover their repayments. Sounds like you're assuming this will never happen - I believe it already is and we have not seen the full extent of the fall out yet!


Personally I think you're posts are tainted thanks to the bias that's clear as a result of your VI - sorry but someone had to say it.
 
curiously said:
Sorry, had to laugh at this - is this the same Financial Regulator who allowed our banks to dig the country into a financial hole?
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I'm not saying the stress test is a perfect device. But someone wondered if a poster had been stress-tested. And my reply was that all banks must and do stress-test mortgage applications.

curiously said:
I wonder do they use the same stress tests now as in 2007 and previous years?
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The stress-test rate has not been decreased since rates started coming down last year.
 
When I was applying for a mortgage a few weeks ago with Halifax, I could see on the computer screen over the mortgage advisor's shoulder it clearly said 'Stress testing at 4.5%'. Now that might be different depending on different applicants.
 
For the record, my brother is a first time buyer and has mortgage approval from AIB for €175,000. He's single, has no kids and would be on between €30k-€35k.
 
Raskolnikov said:
The same Financial Regulator that knew about AIB overcharging customers since 2001?
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As I said above, I am not defending, praising or criticising the Financial Regulator or its rules on stress testing. That's another debate entirely. I'm merely pointing out, in answer to a direct query, the fact that stress testing does exist and is being used by the mortgage lenders.
 
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