How to maximise chances of being approved a mortgage

M

missminder

Guest
Hi all,

This is our situation;
Hoping to apply for a joint mortgage. (think we will have to wait a year)
Not married, 1 dependent and another on the way.
Im 26, partner is 28.
He is in full time permanent employment with the same company for 5 years, he earns about 32,000 per year, but this is incl regular/reliable overtime. (works every 2nd Sunday).
I have been self employed since July 2010. Last year earned 15k. Tax exempt childminder. So pay no childcare costs for dependent. Have earned 7k to date this year, majority of rest of year will be spent on maternity leave.
No outstanding loans.
Just cleared the credit card.
We have 12,000 deposit. Will be able to save and get this to 17,000 minimum in the next year and we will be gifted 5,000. So will have 22,000 minimum to cover deposit and costs.
We own all of our own furniture/white goods.
We have been paying rent of 1200 per month for 4 years.
Main problem is I have been paid cash all along, so taking it I will have to wait and have 6 months of pay going through a bank account before we can apply?
Have tax returns done for 2010 and 2011.

What can we do over the next year to maximise our chances of getting mortgage approval? Partner banks with AIB and has a very well managed current account. There hasnt been much going through my bank over the past couple of years since I have been paid cash.

I will have worked three years, but two full tax years.

Will we have a good chance of approval in a year?

Hoping to get a mortgage of 200,000. Is this a bit optimistic?

All help/advice will be taken on board :)
 
BOI only lend a maximum of 90% of the purchase price - which means your EUR17k is 10% and the maximum purchase price EUR170k. But they're still unlikely to lend this amount - I would imagine, but do not know for sure, that they would discount your earnings and grant a multiple of 4.75 times your partner's salary i.e. the new maximum would 4.75 times EUR32k.
 
I take it that your childminding is done in your own home and that when you say you're tax exempt, you've applied to Revenue for this exemption. Even so, given that this income can be derived from minding three or fewer children, I suspect that lenders won't take it into account. I'd say the only way to get it considered would be to make sure that your childminding is run very much as a small business - separate bank account, detailed accounts for the business etc. Even at that it's hard to know whether or not a lender will take account of it.

If not, then as Kildavin says, you're looking at being assessed on your partner's income alone, which won't get you near where you want.

I think it might be worth doing the rounds of all the mortgage lenders now with an enquiry to establish what their attitude towards your business would be.
 
Oh great :-( yes I mind at home, take in about 300 per week. Registered as a sole trader, and have tax exemption by notifying the local childcare committee and revenue. Will have accounts prepared when approaching the banks and will make sure all money goes through an account once I finish my maternity leave. So frustrating, im better off not declaring my income, paying my prsi, insurances and registration with childminding Ireland at this rate. No incentives to being self employed in this country! If I were to work full time and pay childcare I wouldnt be taking in as much money. Sorry, rant over :)
 
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