MBA Funding - Mortgage Application Affect

Hi all,

Quick question, currently through to the latter stages of winning an MBA scholarship at UCD Smurfit, going through the process so far has really whetted my appetite to do one (it has always been a lifelong ambition to do one). However if I am not successful and pay for it myself I was wondering how it would impact any mortgage application that we plan on doing in the next 3/4 months.

My situation.

Salary 65k
Bonus - 2/3k (not counted I know)
No debts of any kind.

Wife is staying at home with 10 month old.

Looking for mortgages in the range of 250k.

Have savings of about 55/60k in about 4 months.

Work would contribute something to the cost (its 30k) and I could possibly take 5 or so out of our savings for it. I see that AIB (my current bank) arrange for MBA funding loans for between 2 and 5 years. If I was to apply for 20k over 5 years would that be seen differently to say a car loan? My employer is very supportive of doing this and it would fast track me to the next promotion within a year or so (approx 90k). I know that the promotion is not guaranteed but the average salary for UCD MBA grads is over 100k so I think the 90k is cautious.

If I get a loan before the mortgage, would that have a really bad impact in the amount of mortgage we could get?

Thanks,

Joe

All of this appears positive Joe and makes since from a career path perspective. However, any loan taken out to finance your studies would be accounted for in Bank calculation of your repayment capacity. Your best bet on the net affect of this is to use the repayment tool available on the web to assess what mortgage you can afford, including payback of loan to support MBA. You state that you have saved 55/60K in 4 months. Surely this can't be correct if your gross annual salary is 65K!!

44brendan said:

You state that you have saved 55/60K in 4 months. Surely this can't be correct if your gross annual salary is 65K!!

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Well water is free for the time being!!

hah

No, thats between savings and lump sum we have already.

Yeah was thinking that it might just be counted as a reg loan, was hoping the bigger picture might be looked at but alas...

Very worst position here is that you may need to postpone the mortgage decision for a year or 2. Not a disaster but you should certainly go for the MBA. Best of luck

Unfortunately cant postpone the mortgage application, has to be done in the next couple of months.

The loan for the MBA will be counted as a debt by the bank when making the mortgage application. This will affect the amount you will be approved for. However, it may still be enough to purchase the house.

The ideal scenario is to have no debts as this will maximise the amount of your mortgage approval.

I suggest you go into AIB and meet with one of the mortgage advisors. They will be able to give you an indication of what level of borrowings you will get approved for. They might then be able to give you an indication of the impact of say a 20k loan.

Whether they will account for the fact that it is an MBA loan rather than a car loan for example, I don't know.

Best of luck.

PS. I am also going for that Smurfit MBA Scholarship Apparently there are about 100 in the mix for it!

PolkaDot said:

The loan for the MBA will be counted as a debt by the bank when making the mortgage application. This will affect the amount you will be approved for. However, it may still be enough to purchase the house.

The ideal scenario is to have no debts as this will maximise the amount of your mortgage approval.

I suggest you go into AIB and meet with one of the mortgage advisors. They will be able to give you an indication of what level of borrowings you will get approved for. They might then be able to give you an indication of the impact of say a 20k loan.

Whether they will account for the fact that it is an MBA loan rather than a car loan for example, I don't know.

Best of luck.

PS. I am also going for that Smurfit MBA Scholarship Apparently there are about 100 in the mix for it!

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Hi Polka,

So can I be talking to you then?? Yeah had my interview on Monday, I was the first person so probably getting the worst over and done with. The guy said that they were down to 60 out of 250 applicants so done well to get this far.

Have you had yours yet?

Yep Monday as well. At least it's better odds than the Euromillions!

PolkaDot said:

Yep Monday as well. At least it's better odds than the Euromillions!

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Have you heard back yet Polka?

hope you get it as an MBA is very handy 2 have. im nearly finished my MBS in Marketing but i ideally I would loved to do an MBA but an MBS is much cheaper.

Didnt get it unfortunately (had a feeling I wouldnt interview didnt go as well as I had planned), have been offered a place on the course so will see if work can support me with some finances.

How are you finding the MBS?

No luck either myself. Also offered a place on the course. Currently looking into it.

The whole Scholarship thing is really good from Smurfits point of view cause it gets us interested in the course

Have you done your GMAT yet?

Same as you, currently looking at funding it. Will depend on what work will give me towards it whether it will be this year or next.

Nah, have the book but havent done much with it. You?

Nope. Probably gonna do it end of the month. There's some free study software available on www.mba.com. Worth downloading.