Mortgage - Best lender for low earner

L

lester1

Guest
I am a first time buyer on a relatively low income - 30,000 EURO. I am looking to buy a 2 bed property for about 265,000 to 280,000 and have 15%-20% of this to put down as a deposit. I have been told before that certain lenders won't even consider me because I don't earn enough. Is this correct? Does anyone have any recommendations to narrow down the list of lenders to approach, or should I try them all??
 
On a basic salary of €30,000 and assuming you a. have no loans, b. buy a two + bed property and c. are young enough to take a 35/40 year term your maximum borrowing capacity is €190,000 - possibly €200,000 if you have a payrise pending. Most lenders have a minimum income requirement for 100% mortgages (generally €40,000 single or €60,000 joint) but not for non 100% mortgages. Having said that you are going to need a much larger deposit or a joint borrower/guarantor to buy at €265,000 - €280,000.

Sarah

www.rea.ie
 
80% of even €265K is 7 times €30K gross which looks like a long stretch to be honest. Have you tried a few lenders at all to see what they would be willing to lend you? Could you team up with one or more other trusted people to buy jointly?

Post crossed with Sarah W's.
 
Hi Sarah,
Thanks for your mail. I guess I may need to lower my price range. Aside from that, are there any lenders that are generally more favourable towards lower earners?
 
Affordable Housing Options

I think you would be well advised to consider your local authority Affordable Housing Options. All local authorities operate schemes- South Dublin Co. Council and Fingal Co. Council are among the leaders in providing hundreds of such units to eligible purchasers- many of which are in private residential schemes. Main rule is that your income must be under 40,000 euro for a single person.

Two bedroom apartments from c. 150,000 in locations across the city including Citywest, Swords, Tallaght, Clondalkin, Lucan, etc. Dublin City Council would have similar units in City Centre (but i imagine with big demand).

On the open market, such units would sell for over 250,000 plus! But as a affordable housing purchaser, you will be subject to a clawback provision- nothing to worry about if you are not intending to sell in the immediate future! Plus at least, you'll have your foot on the infamous property ladder...

The closing date for applications of a new scheme at South Dublin Co. Co. is Friday next 10th Feb. Download application and details at [broken link removed] Other authorities at www.fingalcoco.ie and www.dublincity.ie

Get back if you need advice or assistance with application, etc
 
Hi ClubMan,
Thanks for your reply. I'm just starting out, so haven't approached anyone yet...
Given that I'd rent out a room if I bought a 2-bed property, would that increase the potential loan amount by much?
 
Hi again ClubMan,
Thanks for the info on affordable housing. I'll definitely look into that...
 
Affordable Housing

Hate to think of Clubman as getting the credit for Affordable Housing suggestion. However, in fairness, Clubman is always a fountain of knowledge.
 
Hi BrianDublin,
Sorry about that - getting a bit excited with all the replies! Thank you for the advice!:)
 
lester1 said:
Hi again ClubMan,
Thanks for the info on affordable housing. I'll definitely look into that...
Click to expand...
Actually that was BrianDublin who I have to thank for the kind comments while apologising for taking his credit! :)
 
Hi Lester,

I'd already added room rental in. And I would agree - affordable housing or the shared ownership scheme are both options for you to consider.

Sarah

www.rea.ie
 
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