Mortgage application (with kids)

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dec1892

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I'm considering applying for a mortage (at an early stage at the moment). I have sizeable deposit, but currently in a house which I will be looking to sell and then upgrade in size hopefully.

My question is what deductions do banks make for kids in a mortgage application? I currently have one child and another on the way, how much will banks likely deduct for this in the mortgage offer?

Thanks
 
is from the property pin:

to clarify, there have been three changes to AIB's mortgage policy in the past 6 months. For a mortgage of over €400k AIB will only lend 85% LTV & for sums up to €400k 92% LTV. This used to be 92% LTV across the board up until 4 or 5 months ago. The exception to this continues to be one bed dwellings which are 75% LTV. The biggest change that is impacting people who were sanctioned 5 or 6 months ago and went to renew is that mortgages are now stress tested at the greater of 6% or the current variable +2%. The old policy was just +2%, so this meant mortgage went from being stress tested at 5.25% to 6% overnight and this shaved a portion of any sanctions being renewed. Another policy change is that the net disposable income guidelines were changed from guidelines to actual criteria that must be met in all cases. The policy is that after stress tested payments and other borrowings are deducted from your net income a single person must be left with NDI of €1,250, a couple €2,000 and add in another €250 each additional child. This has made it particularly difficult to borrow for those with two or three kids. All these changes took place about 3-6 months ago. I don't know what other institutions are doing but my feeling is that AIB have the most strict and stringent approach to assessing mortgages at present. I've seen people promised larger amounts and asked for less things off other insitutions, particularly the foreign owned ones, but that's all anecdotal.
 
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Thanks for that.

So if I understand this correctly, a couple with 2 kids have their total monthly net income reduced automatically by €2,500?
For example, total net monthly income of €6,000 is then reduced to €3,500. Is this then further reduced for other monthly expenses/debts that a family might have?
 
Dec, from what I can understand, you have to have €2500 disposable income left , every month,after all deductions (this is for a couple with two children, 2000 for the couple, plus 250 for each child). Open to correction though!
 
dec1892 said:
Thanks for that.

So if I understand this correctly, a couple with 2 kids have their total monthly net income reduced automatically by €2,500?
For example, total net monthly income of €6,000 is then reduced to €3,500. Is this then further reduced for other monthly expenses/debts that a family might have?
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This is reduced by any monthly debt repayments,childcare cost and educational costs .Other expenses are what the 2.5 k are for.
 
BOI use a very similar system, just slightly different figures. I'd guess that both have increased the NDI thresholds over the last few months too based on the up coming budget and property taxes.
 
dec1892 said:
Anyone know what the policy is with BOI, Ulster Bank etc?
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If you've a few kids then AIB & BOI set the bar impractically high (what do they think these young FTB couples want with 4 bed houses?). UB are lending and are family friendly, they'll even allow a chunk of your child benefit as income. No need to mention the one on the way though and I'd keep the other half away from the bank if things are obvious in that regard.
 
dec1892 said:
I'm considering applying for a mortage (at an early stage at the moment). I have sizeable deposit, but currently in a house which I will be looking to sell and then upgrade in size hopefully.

My question is what deductions do banks make for kids in a mortgage application? I currently have one child and another on the way, how much will banks likely deduct for this in the mortgage offer?

Thanks
Click to expand...

Is the mortgage based on two incomes? If it is then maternity leave may affect the application as well.
 
BOI are different in that they lend up to age 70 whereas AIB only lend up to age 65. Also BOI don't subtract anything for having kids, and I think the amount of monthly disposable income after mortgage repayment from net pay is 1750 for 2 adults and 2 children...
BOI gave us more than AIB would, we are BOI customers and I went into my local branch.
 
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