mortgage declined due to one arrears payment

J

jamiew

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well as title says, we were so shocked today to be turned down our mortgage. after being in with the bank last march and doing everything they asked of us and more, and coming back after 7 months (they advised 6), it was no good.

We are devastated, it wasnt an official decline, we looked for 150k, (combined income of 46k per year) with 1 kid, and 1 on the way(that bank are aware of).

we had 20k lump sum, and saved 600 per month on top of 800 rent per month for last 7 months (renting 4 years, loans previous to saving but all cleared 7 months ago, hence beginning of saving.

it comes down to 1 arrears payment I had back in november 2012, that wasnt cleared til March 2013. they have also advised we would be looking at a figure nearer to 100k, with our level of income and considering net disposable income.

after us both shedding tears, we are wondering what to do now, this was with bank of ireland, do we go to a broker???

or do we wait, my own income was leaving us down, i am a part time teacher so getting approx 250 per week, term time (36 weeks of the year). I will be buying into this business come September as a partner and hopefully will double my income or more. Im aware that I will have to be in the business 2 years before I apply again for mortgage but maybe then we will be happier with the figure and get a house that we actually like?

Nothing on the market that we like in that budget of 120k in Cork.

Sorry for the long post but We feel lost now, and look to some of your frequent posters for some valuable advice that you have always provided us with.

Thanks
 
What a lot of couples are doing now if their parents have extra ground around their house is putting up a cabin. I was looking at one recently they will erect it on site for €17k you need a plumber and electrician there on the day. No property tax either. Just an idea.
 
Shop around. I got offered very small amounts from different banks when I went looking. I ended up getting what I needed from PTSB. Hopefully someone will offer you a bigger mortgage that can support your income and a nice home.

I don't think anyone will give you 150k on an income of 46k. I think you need to be a bit more realistic.
 
jamiew said:
we had 20k lump sum...

it comes down to 1 arrears payment I had back in november 2012, that wasnt cleared til March 2013.
Click to expand...

How come you took 5 months to clear one month's arrears when you had €20k and you were saving €600 per month?

Mortgage brokers are sometimes able to talk their way around these sort of issues,so maybe that is your best chance.

Brendan
 
The kicker here is the missed payment,banks are cherry picking,if there is even a suggestion of missed payment then its adios kiddo.

Have you looked at your own ICB report yet?
You can get it here for €6 a pop,you will need to get your partners as well,my advice is never apply for a mortgage/loan til you have looked at it.

[broken link removed]

However as Brendan suggested try and find a decent broker in Cork and if he feels he can get you across the line then you may be in with a chance however I would not be getting my hopes up too high.
 
Don't let this get you down. You've only tried one bank. Great advice on here to check the ICB report, if it's clean another bank might loan you the money. Bank of Ireland already know about the missed payment history so stay away from them. Look to a bank that is eager to expand in the Irish market. I think, and open to correction on this, KBC want business. Look at the ads in the Sunday newspapers, the are generally good indicators.
 
Thanks everybody for your replies, really appreciate it
Brendan, I fell into arrears in October, and until that February, I received a lump sum for a medical negligence claim that enabled me to pay off all loans, and start saving with a 20k balance. So no saving until then either.
I have my ICB report and it notes I missed 1 payment in August 2012, this wasnt cleared immediately but following monthly payments continued, until I missed another in November. Both months arrears were then cleared by January. And the balance of the loan paid off in March, which then closed it.

I went to a broker last Friday who have advised they can try Haven for us through AIB, and will not include the 2nd dependent (not due til March 2014), which if we get approval will allow us to borrow nearer to 150k.
Now my query is, there is no house on the market that we like in around 170k in Cork. We would have to sacrifice going out of county bounds a bit further, or not getting things we want, like a back garden, living in an estate with a green area etc. So we are wondering is there is point in applying now?
Should we sacrifice and just get ourselves on the property ladder?
The thing is, when I go back to work next September after Maternity Leave I am buying into the business I work in, as a partner. So I will then be self employed, the bank has told me that if I become self employed, they will want to see me in the business for 2 years, before I can apply for a mortgage. So that would mean, if we dont go for a mortgage now, we would need to wait nearly 3 years. But my income would be a lot higher, so we could get possibly dream house?

We are lost now, dont know whether to buy now or 3 years, it is a big gap. Were renting now 5 years, so there is a lot of dead money going no where for us.

Any advice, again would be greatly appreciated.
 
jamiew said:
Thanks everybody for your replies, really appreciate it
Brendan, I fell into arrears in October, and until that February, I received a lump sum for a medical negligence claim that enabled me to pay off all loans, and start saving with a 20k balance. So no saving until then either.
I have my ICB report and it notes I missed 1 payment in August 2012, this wasnt cleared immediately but following monthly payments continued, until I missed another in November. Both months arrears were then cleared by January. And the balance of the loan paid off in March, which then closed it.

I went to a broker last Friday who have advised they can try Haven for us through AIB, and will not include the 2nd dependent (not due til March 2014), which if we get approval will allow us to borrow nearer to 150k.
Now my query is, there is no house on the market that we like in around 170k in Cork. We would have to sacrifice going out of county bounds a bit further, or not getting things we want, like a back garden, living in an estate with a green area etc. So we are wondering is there is point in applying now?
Should we sacrifice and just get ourselves on the property ladder?
The thing is, when I go back to work next September after Maternity Leave I am buying into the business I work in, as a partner. So I will then be self employed, the bank has told me that if I become self employed, they will want to see me in the business for 2 years, before I can apply for a mortgage. So that would mean, if we dont go for a mortgage now, we would need to wait nearly 3 years. But my income would be a lot higher, so we could get possibly dream house?

We are lost now, dont know whether to buy now or 3 years, it is a big gap. Were renting now 5 years, so there is a lot of dead money going no where for us.

Any advice, again would be greatly appreciated.
Click to expand...

It's not dead money, you got a roof over your heads for the rent you paid.

Why are you buying into the business? Is it a creche? Do you need to buy into the business or can you just keep working there.

You need to decide what your goal is, house or buying into the business.

Am I right in stating that it now seems you had 2 missed payments and not just the 1? Aren't Haven sub-prime? Meaning you'd be paying higher rates whilst also presumably having child-care costs for 2 kids?

This just doesn't seem feasible to me. You need to change your mindset from rent being dead-money to what it's actually giving to you.
 
Your last reply reads like something from the Celtic Tiger. If you have to go to a sub prime lender you probably should not be getting a mortgage.

Try other mainstream lenders.
 
im buying in as it is quite profitable, and as I am only part time now, 9 -1 my income should increase double possibly more, allowing us to borrow more.
It is a baby/toddler and parent activity. Classes all full and lots of demand to run the classes in lots more areas.

yes your right it is the 2 missed payments, I forgot about the one which is partly banks fault, they lodged money to my current account, not loan account which they apologised for and paid me €20 compensation. Its showing on my ICB report but I figure its not going to make much difference to me as I had the other months arrears at that same time,

Thanks Derek for the advice re rent not really dead money, I must say it is difficult for me to think like that, when the house were currently renting is more expensive to rent than buy(landlord wont sell!). But I see your point, I feel like I want to hurry and get my mortgage so I can settle down and move on with other parts of life, and if I dont Ill be thinking about it for another 3 years. I cant get out of that mindset.

Luckily I dont have childcare costs, as I only work term time and hours so short, family happy to do it.

I feel like mortgage is more important to me as I want to just get it over with, the prep and running up to it, can be very difficult and stressful. But then I think, buying in to the business would be better for our family as, if it does increase our income substantially then we would then be able to buy a bigger and better home in a place of our choice.

Thanks again everyone for your advice and opinions,
 
Hi Jamie

If you are buying into a business, you should not be buying a house. You will need your cash and you will need flexibility.

Continue to rent and enjoy where you are living.

Brendan
 
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