Borrowing after credit check??

2

2004XYZ

Guest
Hi,

Fantastic website, GREAT advice!

I've just had my offer accepted on a house (have paid my booking deposit) but the owners aren't moving til June.

This gives me time to find the money for the stamp duty (just under E15,000), I have everything else sorted (ie deposit and misc fees).

I know the usual 'trick' is to borrow from the credit union after your mortgage provider completes its credit check but I was wondering if this is still the best way, are there any decent alternatives?

Is there any one out there who has had to borrow for stamp duty or a deposit? How did you do it? Gory details please?!

Thanks,

Anne
 
Borrowing form Credit Union

I recently borrowed from the credit union for my deposit and to clear off exsisting loans etc. I borrowed before submitted my mortgage application because as far as im aware credit union loans dont show up in the banks checks anyway. I then transferred the loan amount into another credit union account, and used this as proof of savings.
 
Re: Borrowing form Credit Union

At least 4 credit unions now provide details of loans to the Irish Credit Bureau and would show up when the banks check your record.
 
Re: Borrowing form Credit Union

Thanks Kerry, I'll be taking a similiar route.

Rainyday, I'm aware a lot of credit unions now show up on your credit check, the trick is to borrow from the ones that don't yet fall under that umbrella. And even after doing that I'll still be 500% more ethical than your average financial institution - don't start me.
 
Ethics

Interesting. So if you can find a reference point that is less ethical than yourself, that makes your actions justifiable?
 
Re: Ethics

No Chord of Souls, I never used the word 'justifiable', I just implied necessity. I live in the real world, unfortunately. ;-)
 
The Deposit or stamp duty

One of the secrets that first time buyers need to know that this is a time when your parents - even if you are 60 - will part with wads of cash without any requirement for repayment.

Even if your old fella never gave you a cent, I assure you with 89.5% success that he will assume you have finally matured when buying a house (God bless Tom and Mick Bailey!) and will be 'happy' to help
 
.

OK WizardDr - we don't all have parents that have wads of cash to be able to hand over !! Not everyone can go running to parents to get a step on the housing ladder.
I'm sure there's plenty of other people that cannot or will not turn to their parents and put them into an extremely difficult position of handing over a large sum of money at a time when they're own earning potential may be in decline. It is totally unfair to EXPECT parents to do that .
 
Re: .

Here here dublin america!. At this age of my life id find it embarrassing to be financially dependent on my parents - its bad enough that im 27 and still living with them! Id rather lie to a bank any day about savings than to put that sort of pressure on my parents in their retirement. And even if i was to take money from them (not that i would) what about my 5 brothers and sisters would the same be expected for them ?!
 
2004XYZ,

Why were you comparing your actions to those of "your average financial institution", then?
 
Smoke and Mirrors

All this borrowing and moving funds around to exhibit proof of savings is all well and good, but the money does all have to be paid back eventually, so ultimately you are ony kidding yourself
 
A cautionary tale

A little off topic but I just had an enquiry from a couple who have only lived in their house for 6 months and have almost €30,000 of unsecured debt on top of a mortgage that can only just be covered by the husband's wages as the wife has given up work. Absolutely no chance of a remortgage - other than spending every cent on covering the repayments their only other option is to sell up and start again.

Sorry to be so negative on a sunny Friday.....

Sarah

www.rea.ie
 
Re: A cautionary tale

Chord of Souls, I have to assume you work for a financial institution or have very generous parents! Count your blessings, it's tough out here in the real world!

I was alluding to earlier discussions on this website (perhaps you're a newcomer) about the 'morality' of concealing borrowings from banks. My conclusion is that those who object are probably the ones who get Mummy and Daddy to provide the bulk of the funding for their new homes.

I agree completely with the last couple of contributors, I have no time for those who expect or look for help from their parents when it comes to financing the purchase of a house, at that stage I think our parents have done more than enough for us.

As to my dig about the banks and ethics - where do I start? How about the DIRT tribunal and the endless flow of perjury? Or the overcharging. Or...AIB?

I quote from the Sunday Business Post (July 11, 2004): For those who don't have parents donating large sums to slush fund, imagination is required. Many first-time buyers are borrowing thousands of euro from their local credit union towards their deposit. This is because it doesn't show up on credit checks conducted by the banks, according to mortgage sources. They lie to the lender, claiming the loan will be used to buy a car, to fund further education, travel and so on. It's unethical, but banks can hardly claim the moral high ground on ethics.

Hear, hear!
 
Re: A cautionary tale

My conclusion is that those who object are probably the ones who get Mummy and Daddy to provide the bulk of the funding for their new homes.

Have I missed something? I don't see where Chord of Souls expressed any opinion on this specific issue so I'm not sure why you're having a go at him/her.
 
"...I'm aware a lot of credit unions now show up on your credit check, the trick is to borrow from the ones that don't yet fall under that umbrella. And even after doing that I'll still be 500% more ethical than your average financial institution..."

2004XYZ, you're veering away from my point. As ClubMan has pointed out, I have not expressed any opinions on the subjects of parents providing help to their offspring to buy houses on Askaboutmoney.

I was noting that I found the construction of your comment above interesting. You made reference to what other financial institutions are doing/have done. I am in absolute agreement that certain financial institutions have exhibited very low ethical standards. Many continue to do so.

But your post implies that you are aware your own proposed actions are unethical, but seeing as the financial institutions themselves are more unethical in your opinion, this in some way absolves you.
 
Separate point

By the way, for anyone who considers borrowing deposits and concealing it from mortgage lenders, I would throw in the following note of caution...

Q. Why do you have to conceal it from the mortgage lender?
A. Because if the mortgage lender knows about the other borrowing, they won't lend you the required mortgage.
Q. Why won't they? Is it because they don't want to lend out money?
A. No. Mortgage lenders are in the business of lending money. They want to lend out as much of it as possible to as many people as possible. If they refuse to lend someone money, it's because they don't believe the person has the ability to repay it. Maybe you can repay it in today's low-rate environment, on the salary you currently enjoy, but will this always be the case? Lenders' credit policies are based on many years of experience of many sorts of economic environments.
 
Re: Separate point

All this borrowing and moving funds around to exhibit proof of savings is all well and good, but the money does all have to be paid back eventually, so ultimately you are ony kidding yourself

Thanks for the opinion Michael but id be kidding myself more if i thought that i could save for a deposit and buy a house in a few years - at the rate that house prices are increasing at the moment i had to take the risk because if i waited any longer i would have shut myself out of the house market totally.
Obviously if i didnt think i could afford the loan repayment on top of the mortgage i wouldnt have taken out the loan. I think that im best to assess what i can afford to pay back per month, not some bank official using a repayment calculator which "fits all"
 
Re: Separate point

CHORD OF SOULS

I have already explained what I was alluding to (ie earlier discussions on the subject of concealing borrowings), there's really nothing intriguing about the construction of the comment. You may seek intrigue, but it doesn't mean you will find it!!

It was a simple, jokey but heartfelt throwaway comment ("….and even after doing that I'll still be 500% more ethical than your average financial institution - don't start me"), one with which I believe most people who deal with Irish financial institutions empathize.

Quite why you feel the need to analyse and re-analyse it I'm not quite sure. Hence my deduction that you must work for such an institution!

"Your post implies that you are aware your own proposed actions are unethical".

LIGHTEN UP, FOR GOD'S SAKE! Just to reassure you: I am 100% certain that I will be able to repay my stamp duty loan along with every other debt I will accrue on the road to purchasing a home. My finances are almost worn away from being analysed by a fine toothcomb! Nobody will be left short by my actions. My conscience is, therefore, clear.

You may actually be intrigued to learn that my mortgage lender has just suggested I borrow my stamp duty from a credit union – he has even advised me on the timing of my loan request and exactly where to go. Looks like we're all playing the same game.

My point about parents….I know very few 25-35 year-olds who are in a position to fully fund the purchase of a new home on their own. Many, like myself, might have enough earnings and savings to cover their deposit and their monthly mortgage repayments, but find the stamp duty a step too far.

I can therefore only assume that the majority of those who find this 'struggle' incomprehensible – or, indeed, regard any 'imaginative' attempts to go it alone, rather than expect their parents to share some of the burden of the debt, as 'unethical' - must be in a position where someone else (most likely a parent) is helping them out. Good for them, my opinion is simply that house buyers shouldn't look for help from their parents, they should stand on their own two feet, as our parents had to.

As to your second post – forgive me, but have you ever attempted to get a mortgage on your own?

ie "If they refuse to lend someone money, it's because they don't believe the person has the ability to repay it."

Nonsense. Are you not aware that most mortgage lenders are only in the business of lending 92% of the cost of a home? That leaves 8% for the buyer to find, plus whatever is the cost of the stamp duty. That is how it works.

I am lucky enough to be able to comfortably afford my mortgage repayments and to put up the deposit for my home. I am also lucky enough to be able to afford to repay a loan for my stamp duty, I just don't have 15,000 spare euro to fund my stamp duty at this moment. As I said before, tragically, I live in the real world!
 
Re: Separate point

Just to reassure you: I am 100% certain that I will be able to repay my stamp duty loan along with every other debt I will accrue on the road to purchasing a home. My finances are almost worn away from being analysed by a fine toothcomb!
Click to expand...
What level of interest rate increases have you built into your analyses?

You may actually be intrigued to learn that my mortgage lender has just suggested I borrow my stamp duty from a credit union – he has even advised me on the timing of my loan request and exactly where to go. Looks like we're all playing the same game.
Click to expand...
I presume you are referring to a mortgage broker? He has no long-term interest in your welfare. His sole interest is in closing the mortgage deal so he gets his commission and/or fees. If he can talk you into taking out a bigger mortgage in order to maximise his commission, he will probably do so?

Nonsense. Are you not aware that most mortgage lenders are only in the business of lending 92% of the cost of a home? That leaves 8% for the buyer to find, plus whatever is the cost of the stamp duty. That is how it works.
Click to expand...
When I got my mortgage 10 years ago, the maximum available was 95%. Why do you think the banks will only lend 92%, given that they are in the business of lending money?

I am lucky enough to be able to comfortably afford my mortgage repayments and to put up the deposit for my home. I am also lucky enough to be able to afford to repay a loan for my stamp duty, I just don't have 15,000 spare euro to fund my stamp duty at this moment.
Click to expand...
So is there no property (maybe smaller, or in a less-attractive location) which you could fund without having to borrow a deposit elsewhere?
 
Re: Separate point

"When I got my mortgage 10 years ago....".

I rest my case!
 
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