Mortgage refused because I 'don't have enough debt'

M

MelF

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Weird one. I'm trading up with 300k savings and 500-oddk equity in my current house and applied for a mortgage of 300k to give me more buying power if needs be (about the same mortgage amount as I have currently but which will be repaid with sale proceeds). No car finance/credit card or any other debt which according to AIB is the reason they turned me down.
Donkey's years since I've applied for a mortgage and thought being cash rich was a plus! Is this a thing now with all mortgage providers and why the heck is being debt-free an issue?
 
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What price range did you tell them you were considering? I believe it's not uncommon for them to refuse to lend to folks who don't appear to need the funds, perhaps on the chances that the borrower might just be looking for short-term financing where the administration costs of your typical mortgage would outweigh the interest they earn.
 
I'm looking in the 1m price bracket but only dipping my toe in to the market at the moment and everything seems to be going for over asking but I don't know how far over, which is why I wanted mortgage approval to give me a bit more leeway. Or so I don't have to max out my savings completely if it happens that mine sells for less than I hope. But I really didn't expect a flat no!
 
We are in a similar situation, but we don't want to have a mortgage, but I'm very surprised they flatly said no.

Was the term of the mortgage short?
 
Very odd. Is AIB your bank for your everyday business?

As you have been refused, you should go to a broker and they will present your case better or suss out what is wrong.

Brendan
 
Paul O Mahoney said:
We are in a similar situation, but we don't want to have a mortgage, but I'm very surprised they flatly said no.

Was the term of the mortgage short?
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20 years. Handy affordability is partly the reason I want to trade up in the first place - I've no problems saving, so might as well go for a better location and a more expensive house than hoarding cash. Or so I thought.
 
MelF said:
20 years. Handy affordability is partly the reason I want to trade up in the first place - I've no problems saving, so might as well go for a better location and a more expensive house than hoarding cash. Or so I thought.
Click to expand...
It's a reasonable strategy.
 
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