Urgent Advice Needed: Mortgage Refused because I have bad credit

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250,000 @ 3.5% is 1033 euros per month - total interest 183953
250,000 @ 6.25% is 1467 euros per month - total interest 366431
Difference is 182,478 euros over the life of the mortgage.

Might be better off waiting a little while and fixing that credit record
 
3.5% and 6.25%

Sez Karl

250k for 30 years @ 3.5% = 1122 PM
250k for 30 years @ 6.25% = 1539PM

Diff €417 per month, 5k a year or so , cash.


If its shorter its better .

250k for 20 years @ 3.5% = 1500 PM
250k for 20 years @ 6.25% = 1827 PM

Diff €327 per month , 4k a year , cash

Then you must pay €1250 (0.5%) to start to exit their mortgage, and refinance with a proper bank and possibly more , not including legal fees

Ouch :( . You could nearly rent a whole house for 5k a year in rural areas.
 
:confused: Why oh why did I get myself into this situation.

Thanks Guys for the breakdown.
 
Re: 3.5% and 6.25%

2Pack said:
Sez Karl

250k for 30 years @ 3.5% = 1122 PM
250k for 30 years @ 6.25% = 1539PM
Click to expand...
bmg's current offer is a 35 year term so the monthly repayments are less but the total interest bill is significantly more.
 
Well you know guys, I'm in a sorry sad state of affairs and it may end up being the only option I've got. ;(
 
I know what others here are going to say to this bmg. I know you love the house, but is it worth 182,478 over the life of the mortgage? Could you wait until your credit record is clear?

What about BOI? Have they got back to you yet?
 
True but a shorter term would mean more is paid off.

Do start allow overpayments every month like normal lenders or do they only credit the overpayment it once a year as many UK lenders still do ???

I asked another two posters for a copy of their full T&Cs last week but never got them. :(
 
Looking back at your original posts, you say that you are paying E600 per month currently in rent. In order to get this house you are willing to increase your monthly payments by almost 900/month. The money that you would save by continuing to rent and not going with a subprime lender could be reinvested. Within 3 years, if you saved 900/month, you would have more than 30,000 euros saved and you would get a much better interest rate from the banks. Over the term of the loan, that would save you more than 200,000 euros (assuming a 6.25% interest rate over 35 years). Do you really have to buy now?
 
Surely you should be able to get the T&Cs from the lender in advance of making a decision on whether or not to go with them!?

I agree with others above who highlight the fact that the premium being paid here just to get a mortgage may be excessive.
 
Hi

I was in exactly the same situation last year, (which is how I found this site), with partners bad credit, when we were buying out the council from shared ownership. Even the brokers wouldn't touch us and Linda Martin/ Dodgy Sunday World Mortgages seemed the only option - they took pleasure in telling us this along with their outrages rates. We eventually contacted First Active and told them everything as it was no lies or stories, and asked them to consider. The lending manager was very helpful and said they would need a couple of days to discuss things before they gave us the forms even. Low and behold, she said yes, what a weight lifted off our shoulders.

Even though we were still were down as bad credit with the ICB, they know themselves that we had other factors going for us such as good jobs and good collatoral in our home.
 
I would not advise getting a mortgage at all if you are paying such a premium.

That gap will grow as interest rates go up......and they will go up maybe another 2% in this tightening cycle if the Germans stay as upbeat as they are now.

EG
3.5% €1033 a month
6.25% €1467 a month
8.25% €1821 a month

At present the premium a month just to get a mortgage is €434 cash after tax or €5208 a year from your after tax income . You would use up all your TRS with a €150k mortgage at current interest levels from a prime borrower so no extra tax relief for you .

Even when your record is clear with BoI the next lender will notice from your ICB record that you are with start and will wonder why ????

If you were self employed and your partner too and had problems proving regular income and were going to be the same in 3 years then what the heck you would still possibly end up with start albeit at around 5% (current rates) not 6.25% .

If you have 3 years steady employment each and a full time income each the banks will be easier to deal with AND you could try to save 5% of the cost to get an even better deal like a tracker .

Property prices will stop rising this year or next. After that I will not predict much save to say that the same house will still be around 250K in 3 years unless a motorway is built next door to it.

Hang in there
 
gearoidmm said:
Looking back at your original posts, you say that you are paying E600 per month currently in rent. In order to get this house you are willing to increase your monthly payments by almost 900/month. The money that you would save by continuing to rent and not going with a subprime lender could be reinvested. Within 3 years, if you saved 900/month, you would have more than 30,000 euros saved and you would get a much better interest rate from the banks. Over the term of the loan, that would save you more than 200,000 euros (assuming a 6.25% interest rate over 35 years). Do you really have to buy now?
Click to expand...

Absolutely makes sense as do all of your posts/replies.

My heart ruling my head I guess. Lets just wait and see what the BOI say.
It's disgusting what these people can charge.
 
bmg said:
It's disgusting what these people can charge.
Click to expand...
I disagree. It is fair enough for lenders to load customers who they assess as high risk. Whether or not the customer decides to accept the loading is up to themselves.

Post crossed with CCOVICH's.
 
Hi bmg
sorry to say i have no advice, but from what ive read the advice given has been very good.So i just wanted to say goodluck..;)

regards
ontheup
 
bmg said:
My heart ruling my head I guess.
Click to expand...
Tis , now cruch the figures again. rent is not rising much owing to oversupply in the market but assume you got the mortgage and that the ECB tightens as they will. Assume 2% tightening.

Karl Jeacle tells us what will happen.

(3.5% €1033 a month )
6.25% €1467 a month
8.25% €1821 a month

The difference between paying €1821 a month mortgage and €700 a month rent is €1121 . If you save that difference for 3 years its €1121 x 36 = €40,000 . Your outgoings are €1821 , payable in rent and to you or payable only to start.

If you find out that saving €1121 is impossible and paying €700 rent at the same time its the same as start would charge if the ECB interest rate goes up 2% in the next 2 years and you would not be able to pay it and would go into arrears. start will send you a letter every month telling you you are in arrears. They will charge €150 for the letter and will add it to your mortgage as well as dis your score in the ICB .


Thats leaving out the interest you make during 3 years saving like a trojan (another few k) ! You can now get a 90% mortgage, have a clean record, pay a decent interest rate for the mortgage for 35 years or whatever ...probably less , reduce your life assurance premiums coz you can give up the fags if you have to :D pay some fixup costs in €€ from your cash hoard or furniture or both ...... and you know that if the mortgage costs €1821 a month you can handle it and can prove it to anybody .

Your bank manager knows you can accumulate money, he sees it every month.

And were sprog #2 to arrive you can jiggle with the savings you already have.

How utterly mad is all that bmg ?????
 
Thanks 2Pack for your sound advice as always!

All the replies have been greatly appreciated from everyone.
I will let you all know how it goes.
 
2Pack said:
Tis , now cruch the figures again. rent is not rising much owing to oversupply in the market but assume you got the mortgage and that the ECB tightens as they will. Assume 2% tightening.

Karl Jeacle tells us what will happen.

(3.5% €1033 a month )
6.25% €1467 a month
8.25% €1821 a month

The difference between paying €1821 a month mortgage and €700 a month rent is €1121 . If you save that difference for 3 years its €1121 x 36 = €40,000 . Your outgoings are €1821 , payable in rent and to you or payable only to start.

If you find out that saving €1121 is impossible and paying €700 rent at the same time its the same as start would charge if the ECB interest rate goes up 2% in the next 2 years and you would not be able to pay it and would go into arrears. start will send you a letter every month telling you you are in arrears. They will charge €150 for the letter and will add it to your mortgage as well as dis your score in the ICB .


Thats leaving out the interest you make during 3 years saving like a trojan (another few k) ! You can now get a 90% mortgage, have a clean record, pay a decent interest rate for the mortgage for 35 years or whatever ...probably less , reduce your life assurance premiums coz you can give up the fags if you have to :D pay some fixup costs in €€ from your cash hoard or furniture or both ...... and you know that if the mortgage costs €1821 a month you can handle it and can prove it to anybody .

Your bank manager knows you can accumulate money, he sees it every month.

And were sprog #2 to arrive you can jiggle with the savings you already have.

How utterly mad is all that bmg ?????
Click to expand...

U are a fountain of amazing knowledge.... U really give some great advice..

Best of luck this week... Its like a soap story, will she/wont she :)
 
If she finds saving €1121 a month is too painful and if she cuts back to €500 a month its still her money

€600 a month rent (now) and €500 a month saving (now) is €1100 a month .

---------------------

Karl Jeacle tells us what will happen.

(3.5% €1033 a month )
6.25% €1467 a month
8.25% €1821 a month

----------------------

Its what she would pay every month for a 35 year 250k mortgage at an interest rate around 4% , a bit higher than now, and with a prime lender.

Within 3 years she has saved €18000 ( 8% of a 250k mortgage in fact ) but I feel this lacks ambition bmg and I want a more robust commit from you so I do :D

I know that you can do that €1100 simulation but I want you to do the €1821 simulation , every month, for 3 months. Money out of your account on the 1st of the month .

Then reactivate this thread and tell us how it feels to have so much of your cashflow disappearing like that . Then repeat after me, "34.75 more years of this longer than I have lived " !!!!!!! .

The really really bad news is that you will have saved €3.5 k while you were a simulating and may feel like blowing it on a car.
 
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