Looking for mortgage and have large deposit - no savings though.

P

PatrickDub

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I recently sold a house and as a result have no loans / credit cards etc. I now also have c.E100k on deposit as a result of the sale.
I am a public servant for the past 18yrs and net approx E3200 per month (after all deductions for pension etc).
Has anyone any idea of what size of mortgage I could realistically get? I was hoping for around the E280k to E300k (and add approx E60k from the lump sum to it) to buy something in the region of E300k to E350k.
I'm single.
Thanks a lot.
 
Thanks. I'm just thinking of all the various criteria and hoops yoo have to go through these days. It's the fact that I have no savings record is what I'm thinking about.
 
There are lots more factors to consider, such as other loans, I presume you won't have any loans or credit card debt. Also you are looking for a large sum of money €300k for 1 person on a salary of €3,200 a month - how much salary is this gross a year. You are probably going to be limited to borrow around 90% of the house value (I find banks are giving 90% rather than 92% but maybe a mortgage expert would disagree) With your deposit you are in a great cash position, do you have to buy a house that is so expensive? Buying a cheaper house would mean a smaller mortgage, which is easier to get and also to repay.
There are loads of threads on applying for a mortgage on the site so do a search and see similar threads.
 
I sold my house at the beginning of this year and bought another house. I don't have any savings and only money I had was from sale of previous house. I still have a car loan (and finished a previous 5 year loan off last November).

Lack of savings didn't seem to be an issue with the bank. The fact that I has overpaid my previous mortgage (only slightly some months) I was told made them very happy to lend to me again (I stayed with same bank).

I can't see lack of savings with yourself being an issue as you are also loan free. The only thing that may be a problem is the amount they lend you. You may not get as much as you think you need. Better not to overborrow anyway.
 
Repayment capacity is all important.
How much were your last mortgage repayments?
How much will the future ones be stress tested at 6%?

If the future ones are less than or equal to the previous ones then you should be ok.
A savings history is more important for first time buyers than trader upper/downers.

www.moneybackmortgages.ie
 
NorfBank said:
How much will the future ones be stress tested at 6%?
Click to expand...

Why would the stress test only be at 6%?

If the IMF/EU deal for Ireland is at 5,.83% and these monies are used to capitalise the banks, surely in the long run rates need to at that plus a margin, e.g 7-8%?
 
That's the level the banks are currently stress testing at, you can stress test your own repayments at whatever level you like. Once all the details of the bail out are ironed out, the bank stress testing may be increased too.
 
Norfbank - fair answer. On an opinion, though: do you think it sounds a bit low to truly stress test?

My opinion: stress tests are about the future - and if we could buy 1-year futures on Irish retail rates (I don't think they exist), I am sure they would be trading at 7-8%.
 
That sounds like a huge mortage to me on that salary.
Depends on your circumstances. If you are single and have no kids it'd probably be doable.

We are a family of 4 - 2 adults, 2 kids.
We rent a house (currently househunting) for €620 per month.
One income, net pay is around 2900 per month.
We cannot live 'comfortably' on that to be honest. We are overdrawn nearly every month.

No other loans and we have substantial savings from previous house sale and redundancy payment.

We have health insurance 200 a month and another life insurance policy costing 70 euros a month. We have two cars. We live a very frugal life and don't go out much at all.
When you include things like children's activities - swimming lessons, drama classes, car tax, home heating oil, etc, etc.
A trip to the cinema is 40 euros.
For things like holidays, the odd cheap hotel break etc. we have to take interest from our savings.
I reckon we could just about afford a mortgage of 100k. But we'd still be dipping into savings here and there.

We were offered 120k mortgage early this year, but I got the distinct impression BOI wouldn't go much higher than than on a salary of 40k.
 
I was approved for a mortgage of €137k on a salary of €42k (and the rest of the money came from the sale of my previous house). The bank approved me for this amount ONLY because I had such a good track record of overpaying my mortgage. They would have given me less otherwise.

There is only myself and my son living in the house and I find money very tight. I am overdrawn a lot as well.

I think to borrow €300k on a monthly salary of €3,200 is an awful lot of money. If interest rates were to increase dramatically you could be really struggling.
 
Net disposable income of €3200 per month.
If you use allow 35% of this to cover your mortgage repayments, you have a limit of €1120 per month.

A €300,000 mortgage stressed at 6% over 30 years would have repayments of €1800 per month so such a mortgage is well outside your affordability.

As for stress testing, I think 6% is fair if you are contemplating variable rates. If you think rates are going to be higher than this in the near future then you can fix for 5 years at around 4.5%.

www.moneybackmortgages.ie
 
OP is single and presumably has no kids or dependants, so he can probably live reasonably OK on €3200 - €1800 = €1400.

Though I too think that €300,000 is too high on his salary, the banks probably just won't lend so much, even if he can afford the repayments. Maybe €200,000 is more realistic or €250,000 at a push.
 
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