Was I unfairly locked out of a first-time buyer mortgage?

Q&A: Dominic Coyle

In this case the lender wants to know that you are financially independent – very independent. Photograph: Getty Images

In this case the lender wants to know that you are financially independent – very independent. Photograph: Getty Images

 

I was reading your article on a married woman who had not owned property before being able to apply for a mortgage in her own name, and I found it very interesting. I am married, and applied for a mortgage through a broker with my husband. My husband owned a property previously, and is older than me .

I handed in all the paperwork, everything was going well, until I got an email stating that Haven would not give me a mortgage. I find this irritating to say the least. How is it one rule for one person, another rule for another person?

Ms C.O., email

I can certainly understand your disappointment, but this really is not a case of one rule for one person and a different rule for someone else.

Haven, which was founded by EBS Building Society and is now owned by AIB, does offer a mortgage product to people within married couple who are first-time buyers in their own right even if their partners had previously owned property. Essentially, for the purposes of the Central Bank rules, they can avail of a property with a lower deposit sum.

I have to admit that this was news to me. I had always thought the situation was black and white. If you had never owned a property and your partner had – even abroad – then neither of you qualified as first-time buyers.

However, just because a product is available it doesn’t mean that a lender has to offer it to everyone who finds themselves in that position. And, as it happens, the qualifying criteria for this Haven mortgage appear to be very onerous.

While some in your position might think themselves fully eligible for such a mortgage, you do need to check the small print to see if it applies.

In your case I can see one thing that would immediately disbar you from this mortgage. You say you had applied through your mortgage broker “with my husband”. However, to be eligible for the Haven product you would need to be applying for the mortgage in your own name only, and the property, if you were approved, would also have to be held in your name, not in joint names.

By applying as a couple the first-time buyer status is lost, and this mortgage is not applicable to you.

And then there is the financial test. Like all these things, the small print can dash the fondest of hopes.

In this case the lender wants to know that you are financially independent – very independent. Not only will Haven want to be reassured that you are capable of providing for yourself even after the repayment commitments you are undertaking, it will also want to be reassured that you are capable of supporting your husband and any dependents as well – from your own financial resources, not the family resources.

And while it wants to know that you can support your husband, it also wants to know that he is currently financial independent. They are basically covering themselves – and yourself – in the unfortunate event of your husband losing a job or otherwise ceasing to be financially independent and having to rely on you.

Either way this is an extremely high bar to meet. There is no guarantee that my original correspondent would succeed; it does not surprise me greatly that you did not. My guess is that only a handful of people would qualify for this mortgage. Even Haven are decidedly cautious about its market appeal.

And for what it’s worth, one of the attractions of securing first-time buyer status for my original correspondent was that she might be able to avail of the Help-to-Buy scheme but, as various people have pointed out to me, even if Haven viewed you as a first-time buyer, all these other schemes have their own criteria and you would not be likely to qualify for Help-to-Buy.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.

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