This is my experience of trying to obtain a mortgage Approval in Principle with an Irish lender. At the beginning, we were considering buying a property in the range of €200,000 and €250,000, where our LTV ratio would have been of the 50% - 40%.
After these wonderful 6 MONTHS of trying to obtain an AIP, we are looking at properties in the range of maximum €150,000.
Last week of January 2015.
Let's start at the beginning. We started our search for a house the last week of January. That's the week I researched how buying a house works in Ireland, and started contacting a list of mortgage brokers I had put together.
From the three mortgage brokers we spoke with, we selected Frank Lenny Financial Services, who assured us that he'd help us have an AIP for €150,000 in 7-10 business days after we had collected all the documentation.
While our case was fairly unusual (my boyfriend still resides and works abroad), the mortgage broker was confident that our great credit and savings history, LTV ratio (40%) and stable employment, would allow us to easily obtain an AIP.
First delay? The mortgage broker told me that if I opened a bank account in Ireland, that could serve as my Proof of Address. What he omitted to mention is that, to open a bank account I would need to already have a Proof of Address. That meant waiting a couple more weeks, to procure the Proof of Address.
After we had all the documentation, they submitted our request to KBC Bank on April 10th.
April 27th, 2015
On April 27th, we received a 'reply' from KBC: more questions regarding our application.
May 6th, 2015
Finally, on May 6th, we received the final verdict: our mortgage request was declined because my boyfriend lives abroad. Not for any other reason.. Just because he's a non-resident.
May 13th, 2015
I sincerely believe that our mortgage broker was genuinely surprised by this result. While he had been thorough, until that moment, he hadn't put that much personal effort into our application. We agreed to see how two informal meetings with other two lenders would turn out.
On May 13th, we received a further decline from Ulster Bank.
May 27th, 2015
Our mortgage broker then submitted an appeal to KBC Bank: both he and his KBC consultant were convinced of the solidity of our case. On the 27th we received the last and final decline from KBC.
June 9th, 2015
On June 9th, our mortgage broker submitted a mortgage application to PTSB for €100,000 (we were hoping that a lower request for capital, would make the lender more inclined to approve us). PTSB came back on the 11th with additional questions.
June 22nd, 2015
On June 22nd, we finally received a reply from PSTB regarding our mortgage... which said that they'll consider it only if we can provide at least three months of an Irish bank statement.
Luckily for us, I had opened an Irish Bank account at the beginning of May (against the mortgage broker's suggestion, who advised me to wait), so we would have had to wait only 2 months.
That brings us to August, 2015. When we would need to submit all the documentation again, from scratch, to PTSB. If we decide to proceed with this, we would probably need to lower our request further, to €75,000 or €50,000, as this would our last chance for an AIP.
In the meantime, prices have risen and there are less and less desirable properties for €150,000.
So, after these past 6 months, my question is:
Why would I borrow money from an Irish bank?
They don't seem inclined to see the merits in our application, or suggest alternative amounts they would be willing to lend us.
At this point, we are very much inclined towards borrowing the amount we need from an Italian bank. We've already inquired with one, and they have confirmed that they would approve a loan.
I'm sure that getting an AIP would be easier if both parties were resident in Ireland... or Irish, so this is just my personal, awful, never-ending and patience-trying experience.