Possibility of getting a mortgage approval

S

scaryeire

Registered User
Messages
42
Would we get mortgage approval based on this information.

Both in Full time permanent positions, combined basic salary of €120K, 1 bed apartment which is in negative equity but on a tracker (dont wish to sell, will rent out and rent would cover the mortgage).

Would be looking for 245-250K mortgage.

Does this sound like we would get approved? Partner is a qualified ACCA accountant, with a master degree in Treasury and finance. I have an honours degree.

Any help greatly appreciated.
 

Hi scaryeire,
It's not possible to give you any indication without knowing the following;
Mtg o/s on apt?
Value of property?
Proposed rent achievable on apt?
What level of savings? How much do you contribute per month?
Both your ages?
Do you have any kids?
Any other loans?
 
Hi Killian, thanks for replying.

It's not possible to give you any indication without knowing the following;
Mtg o/s on apt? 230K
Value of property? 110-120K
Proposed rent achievable on apt? 750pm
What level of savings? We will have about 31K,
How much do you contribute per month? To savings? About 1500 combined
Both your ages? 32 & 33
Do you have any kids? No
Any other loans? When we plan to apply, No just one credit card thats kept relatively low
 

No problem at all, the way the bank will assess it is as follows;

Stressed repayments on €230k @ 5.95% over 25 yrs (Max Inv Property Loan term) = €1,474.87
Stressed repayments on new mtg of €250k over max term available = €1,306.28. Both added together amount to €2,781.15. This is the amount you need to prove to the bank you can afford on a monthly basis.
The way you show that is as follows;
Current repayment = ?
Plus monthly savings €1,500
+ existing loan repayment = ?
If the three things above total more than €2,781.15 you have shown a repayment capacity which is a big part of obtaining mortgage approval. Your salaries qualify you to borrow the €480k you need i.e. existing €230k + new €250k mtg. The main issue is how much over and above the required stressed repayments you have proven you can afford. As the property is also in substantial negative equity that will be another hurdle you will need to get over. The banks would look at this in a better light if you had your existing property rented for 12 months and were renting somewhere yourselves in which case you would have a good chance of approval but probably still worth applying if your repayment capacity is over and above the €2,781pm
 
Thanks Killian.

Can I ask why would the 230K be stress tested at 5.95%? This property is on a tracker and so the current rate is very low, it's also not in the terms that the property needs to be PPR to keep the tracker?

Is it not possible to get a new mortgage from a bank for the new property?

I thought with our combined net monthly income of over €6200 net per month we would have no problem, but that doesn't sound too positive, thanks for getting back to me I appreciate you taking the time to reply.
 

The banks have their own rules when it comes to stress testing. It doesn't mean you have to move your existing mortgage to a different lender it's just how assess your application to see if you can afford both repayments stressed at those levels. You need to qualify based on that criteria even though the actual existing mortgage may be on a low tracker over a longer term.. Whilst your income is strong the bank will take the view that if you earning €6200pm, paying €1k to existing mtg & €1,500pm to savings where is the other €3,700pm going...
 
I understand Killian thanks for that, to be honest I personally think we should emigrate I'm just trying to change my partners mind around to this, it's not going to be a very fruitfilul country to live in for the next ten years, quite depressing.

Thanks again for taking the time to reply.
 

No problem at all.. I'm sure you could find somewhere with a sunnier climate...
 
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