Bank offering paltry mortgage

2

2Clueless

Registered User
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Be warned-I’m on a rant. A long admired house has come up for sale unexpectedly and I’m bidding on it. I’m a 43 year old FTB with savings of 150+, a permanent job (64000) and excellent banking record. BOI are only offering me a mortgage of 79 over 27 YEARS-House is approx 195. They argue that I can’t prove regular savings over 6 months - My accounts are with different banks-I like to build up an amount and then fix, say 20 for a year.
 
Surely with €150k+ in savings you'll be able to pull the records together of what you have saved where over the past 6 months? All banks look for similar evidence.

Is there anything else you're not saying that is affecting the amount they are offering? Did your employer document that the full €64k is guaranteed regular income? Any issues with your financial history? Any dependents?

A broker might be useful in pulling a more compelling case together for you.
 
If the house is €195k and you have €150k + a mortgage of €79k where is the shortfall? Or am I missing something?

Have they seen bank statements for the last 6 months showing your savings? I was in a similar position in that I had accounts spread across 5/6 banks. There was no problem once I produced statements from each.
 
My banking record is faultless-tbh, they are probably not mad about me as I never incur charges for late credit card payments. I had a college loan years ago which I paid off early. I kept saying to the BOI lady-I’ve got savings in UB, the CU and Prize Bonds-Are they not relevant? She said they are irrelevant. Might go elsewhere. Very disappointed
 
Shortfall is 40k savings in a 1 year fixed ac. Also, need to buy furniture so factoring it expenses
 
So did you produce the statements from the other banks? Maybe ask for a different bank official as your case is not consistent with my experience?
 
2Clueless said:
I kept saying to the BOI lady-I’ve got savings in UB, the CU and Prize Bonds-Are they not relevant? She said they are irrelevant.
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How much on average did you save over the past 6 months? Did you provide statements showing the source and destination accounts for these savings? If they are legacy savings from more than 6 months ago, then they do nothing to demonstrate your current ability to repay and so are irrelevant in that context.
 
We didn't have half of what you have and we had Irish Life investments, savings in EBS and two Credit Union. We also had 2X bank accounts and 2X credit cards. All we had to do was provide statements from the relevant institutions and we were mortgage approved by BOI. I actually found them very straightforward. It could be a case of an inexperienced bank official.
 
You have 150+ in savings and they will give a mortgage of 79k. That's 229 k and the house is 195k so that leaves 34 k for furniture as you say. You must have some expensive taste in your furniture auld stock!!! lol

If BOI are only giving you 79 k mortgage then something doesn't quite stack up with what you are telling us. Is your guaranteed income/salary around €26-27,000? Do you have loans outstanding?
 
That makes no sense. First the term doesn't really matter. If you have variable you can just pay it off early.
150+ 79= 229
40 k shortfall = 269
House = 195
So you are looking for 70k for furniture and to do up?
Or do you mean 40 k is in a 1 year fixed account and you can't withdraw it without penalty? Just break the one year in that case and pay the penalty.
Are you paying rent now , have you saved in last 6 months ? If you have inherited or been given the savings but not contributed yourself then it is understandable. Otherwise try Ulster bank. Their rates are better too. Or aib
 
As other posters have pointed out, banks require applicants to demonstrate repayment capacity for the proposed mortgage over the last 6 months, i.e. you need to show that you have been living as if you already have the mortgage that you are applying for (to varying degrees - with some banks, the target is the actual proposed repayment, whereas some others set the target at the stressed repayment, i.e. current rate + 2%). Every bank will take into account savings that you have built up in your current account, or that you are transferring to other accounts (for which you can provide statements), as long as the overall build-up in your funds is coming directly from income from employment (i.e. not one-off lump sums or just moving money around). If you have definitely been demonstrating this over the last 6 months, then the person you spoke to in the bank doesn't know their job properly, or they have not been provided with sufficient proof, i.e. statements.

Quite apart from savings, your current living situation might cover this requirement on its own, i.e. if you are renting or paying a mortgage right now, then that payment/repayment can be offset against the target for repayment capacity.

Best regards,
Dave Curry CFP®
https://www.linkedin.com/in/davecurryirl
 
Gross income 64000.
 
All savings have been built up by myself (no inheritance or gift).
 
2Clueless said:
I like to build up an amount and then fix, say 20 for a year
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If I've read this correctly, you're saving about 20k per year?
If you can demonstrate that, there shouldn't be an issue.

Did you apply with BoI, with all your statements provided, or was this an informal chat?

It sounds like you should have no issues with any bank, but you need to get your paperwork in order.
 
2Clueless said:
My banking record is faultless-tbh, they are probably not mad about me as I never incur charges for late credit card payments.
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That’s a good thing for them, as far as mortgages go. Also pretty normal; most people don’t incur those charges, I don’t think?

I kept saying to the BOI lady-I’ve got savings in UB, the CU and Prize Bonds-Are they not relevant? She said they are irrelevant. Might go elsewhere. Very disappointed
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This doesn’t sound right. When I was applying, every bank I looked at said to include details about all savings.

You should have records somewhere saying you saved X euros last month, Y the month before, and so on.
 
If I take a
No, Savings would be 10plus a year. She only asked for BOI info and salary statement. I suggested other institutions but she was fixated on current account. I’ve made an app with UB and am getting all my records together. Hopefully, the outcome will be better.
 
2Clueless said:
No, Savings would be 10plus a year. She only asked for BOI info and salary statement.
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Are you sure you were talking to a mortgage advisor? It sounds strange that they based it solely on that.

I agree with @Gordon Gekko - get a broker to help you get everything together. They'll be able to present your savings pattern the right way.
 
I bank with BOI and went to them in the first instance when I was moving house; the process was a shambles. I wasted time and effort unnecessarily.
 
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