It is hard enough to find a property you like at a price you can afford in the current climate without being messed around by your bank not once but twice. That is what prompted a would-be first-time buyer called Lisa to get in touch.
“Back in October I went through the mortgage approval process with BOI [Bank of Ireland] and was given approval for six months,” her mail starts.
Under mortgage rules imposed by the Central Bank, banks can let a person borrow up to 3.5 times their gross annual income while first-time buyers must have a deposit of at least 10 per cent. However, banks are also allowed offer a small percentage of borrowers an exception which means they can borrow more. Lisa was one of those exceptions, or at least she thought she was.
“I went on the property search and at long last went sale agreed on a property in January. However when I went to BOI to get the mortgage they told me I needed to be reapproved because approval all depends on the address of the property. After waiting for the approval for a week I was gutted to be told I was declined as they had run out of exceptions. This was just the start of a very stressful week with BOI.”
Appeals process
She then outlined a timeline of her week. “I received the initial mortgage decline on the Tuesday. I went through the appeals process to complain against this decision. On the Friday BOI called to say all my appeals had been declined and there was no option but to withdraw from the sale agreed property. At 9am on the Saturday morning, after I had withdrawn, I received a voicemail from BOI to tell me they were going to ‘make my year’.”
When she rang them back she was told “they now had a mortgage with an exception for me and I could go ahead and purchase the property. There was no explanation as to how they suddenly found this money less than 24 hours after telling me every door was closed to me”.
“However by this stage, the estate agent she was dealing with said “she had lost faith in me as a buyer, as had the vendor, and he preferred to sell to someone else. I subsequently lost out on this property. I complained to BOI and was told that it was their fault and they were working hard to ensure I never experienced this again. I was told the Central Bank were looking at my case and they felt terrible. I was promised that the bank were working on guaranteeing me an exception going forward along with a lower rate on the mortgage to make up for this and that I could bid with confidence.”
So Lisa continued her property search “and liaised with BOI as I went along. I kept them in constant contact and let them know when I was bidding and checked I was still okay to bid. I was assured I was okay to offer on another property which I did this week. I again sale agreed, found a solicitor, got my deposit and contacted the bank. At this stage no indication was given that there would be a problem. I received a phone call yesterday to tell me that yet again they had run out of exceptions and I’d need to withdraw from this new property.”
Frustrated
She says she feels "so frustrated with the Central Bank but also with Bank of Ireland. There were promises and guarantees made which they just haven't been able to fulfil. As a result I have lost two properties now and am gaining a reputation as an unreliable buyer".
She says that according to the bank each property a person bids on “needs to go through the ‘exception approval process’ once you have gone sale agreed. You then have to wait and see if they have enough of a percentage to be able to grant the exception. Anyone I’ve spoken to about this says how unbelievable it is so I wanted to bring it to your attention and also the attention of other first-time buyers. They should be made aware of this before they end up falling in love with a property and having their hopes dashed!”
In response Bank of Ireland sent us the following statement: “We know that it is challenging for first-time buyers to secure their first home and we understand what an important purchase a home is for our customers. Our aim at all times is to support prospective home purchasers, while adhering fully to the regulatory requirements that govern mortgage lending. We cannot comment on regulatory matters or individual customer cases however will contact the customer to discuss the matter.”
