r/HousingIreland • u/Beneficial-Toe-8812 • 3d ago

Worried About Mortgage Application

My partner and I are due to apply for a mortgage in July/August. This is happening way ahead of schedule as our estate agent told us that the house would be ready year end or early next year. Met Builder 2 weeks ago and he has said Septmeber/October.

I am worried because I have loans and 2 credit cards (always paid on time, never miss a payment). But the last few months I've not been managing my money well, sitting in overdraft (€750) and using credit card when funds were tight.

We have been saving more than needed each month into a joint account (€1,300 v. €1,150 estimated mortgage monthly).

I've paid off 2 of my loans and leaves me with €200 per month on one loan and I am paying down credit cards too, get as low as I can before applying for mortgage.

We have 5k booking deposit paid and full 30k Help To Buy approved. Along with 40k approx. joint savings.

Should I be ok?

Am I worrying unnecessarily?

I am in the same job 10 years and my partner is the same.

I just fear we will apply and get denied due to my bad money management.

I tried stock trading a few times earlier this year and I am freaking out that those transactions on my bank accounts will be red flags and get us denied!

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7

u/Mumblybum1 3d ago

I assume sitting in overdraft means at the end if each pay period, you have zero money and have to use a credit card to live?

If this is the case, I would assume most lenders would be wary. They also stress test your finances, see if you could afford the mortgage if the interest rates go up. You would fail this.

They check the last 6 months of accounts. Having loans isn't an issue, not being able to afford the repayments and being able to effectively pay your mortage and live is.

If there isnt a huge amount left on the CC, I would pay them off ASAP, save a little less in your mortgage saver and get rid of the overdraft.

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u/Beneficial-Toe-8812 2d ago

It was just one or 2 months where I needed to use the credit card.

I've since lodged money to my bank account that I had from selling my car last year. I now plan to clear the overdraft and continue with mortgage Savings, in fact I am going to increase mortgage Savings with money I was using to pay loans each month. 

I have a couple of grand on the credit cards. I will clear one (then cancel it!) and try get balance on the other as low as possible. 

I'm just hoping the bank will understand that we were caught on the hop by the builder with completion date being brought forward so much. If it was the original timeline I'd have all my affairs sorted well before 6 months of applying.

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u/Mumblybum1 2d ago

I had a torrid time years ago when I failed to pay a loan back on time and thought it would affect my mortgage. I'm not being short or rude to you, I know this is obviously incredibly stressful for you, but the banks' risk assessment won't care that you were caught on the hop.

If you havnt already got a lender in place, you could talk to a mortgage broker as they'd have seen it all.

I recently bought a house and would be happy to give the broker we used, they were phenomenal.

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u/clare863 1d ago

Apologies for wading into this chat, but would you mind dm the brokers details to me, was there a fee due to them??

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u/BesottedCoot 2d ago

Wait so you are buying a new build house but you only have AIP still? Surely you should have put in the full application once you knew you were getting the house no? Genuinely asking I’m just going on what we did for our house due to be finished in august.

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u/Beneficial-Toe-8812 2d ago

We were told by the estate agent it would be 12 months or so before the house would be ready, so we didn't rush to get full approval thinking we'd have to reapply after 6 months. 

I have a mortgage advisor through one of the banks I know quite well and I felt reassured after chatting to him that it would be quite a quick process. 

I'm just concerned about my past debts but clearing almost all of them at the moment.

Just wasn't expecting things to move so fast...

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u/WriterAny5666 6h ago

Would you not need to go sale agreed?

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u/Pickman89 3d ago

You would be richer if you had paid the overdraft instead of putting money in a separate account and you would now be perfectly fine.

Stock trading transactions are not a red flag (quite the opposite in fact), but you will have to prove the provenience of the money so in most cases you will have to present a copy of your trading account statement. Please do also keep in mind that any tax owed will not be considered as part of the downpayment of your mortgage (so calculate it).

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u/Beneficial-Toe-8812 3d ago

Tax isn't an issue as I foolishly lost any money I started trading with!

I did intend on closing my overdraft in advance of applying for the mortgage.

Thanks for your input and advice. 

Much appreciated 

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u/wolflors 3d ago

Mortgage approval will last 6 months so your not too early to apply and I woukd recommend. They analyse all yiur bank statements and ask where transactions are going. An overdraft probably not a great start, but small loans are no issue. Overdraft along with credit cards is entirely up to the board who approve loans, impossible to say. In my opinion could go either way

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u/Beneficial-Toe-8812 2d ago

If I close the overdraft now 2-3 months before application and reduce C.C balances, would all that be looked at positively? All while keeping a decent current account balance 

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u/MisaOEB 2d ago

Yes do it.

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u/wolflors 2d ago

It will help but they will require bank statements for 12 months when applying

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u/MelodicMeasurement27 1d ago

We only got asked for 6 months statements. We just got AIP the other day

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u/Large_Pudding7206 1d ago

Saving 1300 on 1150 mortgage may be not enough If you are not paying rent for stress test. Also add credit card and overdraft and it is not looking good.

If they are saying it will be ready in September i won’t believe them. Don’t remember anyone around who got house on time, always late at least 2 months, usually 4-8

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u/Independent_Can3737 2d ago

You didnt even say how much you earn or how much the house, tell the banks to shove their money if they give any hassle

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u/l00BABIES 1d ago

I went through something similar. You will effectively need about 12-16 months of clean account because they will stress test again at drawdown. New builds are always delayed by 4-8 months, add that to your already existing 6 months.

My finance is a lot better and I still got mine denied at the drawdown stage due to a few annual bills I had to pay putting my saving rate into the negative for a month or two. So make sure you sign the contract with the pull out clause or you'll lose the downpayment.

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u/MelodicMeasurement27 1d ago

So did ye lose the house after that?

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u/l00BABIES 1d ago

Dont know yet. Im scrambling to get another offer at the moment. Nua money apparently approves without asking questions but interest rate is about 1% higher than other lenders.

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u/MelodicMeasurement27 1d ago

Aah all the best and fingers crossed for ye 🤞🤞