Approval in Principle v A solid Mortgage loan offer

Many banks have online calculators which show you in principle what kind of mortgage you could be approved for.

Just wondering does that amount pan out in reality, when you go through the whole process?

i.e. if I require X and in principle I would get it per online calculator, and then I go through the whole process and nothing changes financially, will I get that same amount?

Or in reality, is it never even close?

For example, AIB’s online calculator requests your Marital Status, DOB, No. of Dependants, Income, Outgoings, Loan Purpose, Value of Property, and Mortgage Loan required.

That Seems pretty comprehensive. Assuming nothing occurs after they do a full review of my circumstances, is the online calculator accurate?

sh1t v Chocolate

The only figure etc to trust is the actual offer in writing !!

We spoke to AIB informally in July 2012 and they told us we need you to be able to show the following for a period of 6 months and gave us a figure that lined up with what their calculator said. We went back in December with evidence of what they wanted and got approval in principle for the previous figure. We went sale agreed in March/April and drew down at the end of July for that amount having continued to keep our income / expenditure / savings in the range that they had originally identified until we closed.

They were very clear as to what they wanted us to demonstrate and when we could do that, there was no problem.

Wouldn’t bother with the calculator,go direct to the branch and take all supporting docs you reckon they might need,take those you think they will never ask for,better to have them and be able produce them and get it sorted in one sitting.

PTSB are a good bet as they do not factor in cost of creches etc into their number crunching.

Surely it’s only a good bet if you want to over extend?

Sounds like AIB are being rightfully cautious.

Maybe the numbers stack up if you’re paye, but in my experience, once they realise the main earner is self employed, the magic number takes a nose dive.

Our approval in principle was for 310k, our final approval was for 260k!

AIB’s current calculator threw me out pretty much the same figures I got in sanction in principal letter.

Yes and no, there should be a little bit of judgement thrown in.

In my own situation, we currently pay 2K per month, but with a child starting school in September coming, the following September and the final one the next September it would probably make sense to factor in the reductions - I’m not complaining about my SIP, but I think that it’s not accurate to look at childcare expenses in their entirety for more than 3/4 years as they inevitably reduce massively after that stage.

I think the new aib calc is pretty accurate if you fit the profile…from a quick look it doesnt check if you want to carry neg equity etc… of course bear in mind there will be credit checks done, accountants sign off on accounts where necessary and a request for documentation/proof of how you built up your deposit. A quick call to one of their mortgage advisors if you have something outside of this profile will give you a pretty good idea pretty quick. Our experience recently with BOI is that they are now delving a good bit deeper and want more concrete details than they were back in the krazy days - I think the process will now weed out spoofers more quickly - I might even say that they are performing due diligence as opposed to pretendy diligence which used to be the norm :open_mouth:

Someone I know was similar, went from 310k to 265k with AIB

Have a read of my posting history for some insight into mortgage application decisioning. You can never be certain of obtaining any sum from the bank until you’ve received a formal letter of offer and this only happens when you’ve secured a deal on a property. Various banks have different ideas of what an approval in principle was. With AIB, at least up until my recent knowledge, your sanction in principle was quite solid. Where mortgage calculators were generally so askew was a lack of accounting for dependents and other variables which tend to whittle down an approval amount. I’ve just looked at the mortgage calculator and it’s broadly aligned with the assessment process. In addition to meeting all the metrics you generally need to demonstrate that what you pay in rent and save on a monthly basis is at least close or equal to the stressed mortgage repayment. This would need to be corroborated. This is where one could find themselves getting less than the maximum eligible amount.

I guess if you failed the approval in principle, then just don’t bother.

But approval in principle means the likelihood of them offering you a mortgage is quite high. They will want in interview you, check your savings records, pay slips, outgoings and other debts. Assuming all this is OK you will get the loan. Be careful not to have Paddy Power or similar on your outgoings, as they may think you have a gambling habit!

You sure about that at PTSB?

They require you to fill out a Household Expenses Form which quite clearly has a few tick boxes for childrens expenses. If you tell them you have no dependents and indeed you have, you are lying! :slight_smile:

Thats what the broker I was dealing with told me,that was in August though so perhaps that changed around that time?

In any event there was no denying the DDs on the current a/c to the various creches,€770 to Little stars creche and €440 to **Nancys afterschool club **would have sunk that ship before it even launched. :slight_smile: