When even a chief executive cannot get a mortgage

When two banks turned him down for a mortgage, Kevin O’Loughlin was starting to get frustrated. Chief executive of Nostra, a tech business with a €10 million turnover, and nominated for EY Entrepreneur of the Year, O’Loughlin was routinely seeing younger employees achieve first-time buyer mortgages. And yet he wasn’t making any progress.

“It’s impossible,” he says. “It’s really, really difficult, particularly if you’re self-employed or run your own business.”

Like many people in their late 30s, O’Loughlin had some “baggage” from the boom years. He had bought three homes at the time, none of which was suited to the needs of his family today. Some personal financial difficulties at the height of the boom – to keep his business going, he didn’t take a salary in 2011 – meant he didn’t tick all the boxes when it came to the mortgage application, but he had got his properties all back in order and his business was booming.

“I assumed when I went into the bank I would have got a pat on the back for not having a write-off; but I got quite the opposite.”

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One solution offered by the banks was to sell his properties, and then come back and look for a loan

The message O’Loughlin received was that because of his history during those difficult times – even though he had since turned the issues around – the banks didn’t want to do business with him. Despite the fact that on the other side of it, he had a steady business banking relationship with one of the main banks.

“I think they’re looking for people who don’t need a mortgage; their requirements are so strict, it’s purely about ticking boxes on a page, and if you don’t tick all the boxes you don’t get a mortgage. No one seems to look at the facts behind it”.

Emigration considered

Things got so bad that he even considered emigrating.

"I actually considered opening an office outside of Ireland and moving," he says, noting that while his family was living in a "fabulous house" at the time, this was rented, and the owners were planning to move back at any point.

“And we wanted to be in control of where we live.”

One solution offered by the banks was to sell his properties, and then come back and look for a loan.

“But I had no reason to sell them, they’re performing well, they’re my pension.”

Moreover, he wasn’t able to get certainty from anywhere that once he did sell, he would definitely get a mortgage.

The issue was finally resolved when he happened to be in Liffey Valley shopping centre one day and saw a sign: “Talk to us today about a mortgage.”

He did talk to them – Permanent TSB – and he found a much more realistic approach was taken which meant he secured a mortgage and is now happily living in his new home.

In the end, the monthly mortgage repayment “was pretty much identical to the rent we’d been paying for the last three/four years”.