Tea & Mortgage Podcast #23: Most common mortgage and home buying mistakes

0:13 – 0:20 Norm Schriever 

All right, everyone, how’s it going today? Tea and Mortgage Podcast, episode number 23 with your host, John Coleman.

0:21 – 0:38 John Coleman 

Hey, how are you?

Thanks, Norm. Number 23, who would have thought of this? Yeah, looking forward to discussing the common mistakes that people make and what we aim here today is to help people get ready for 2025.

I hate when I’m saying that year, but anyway.

0:39 – 1:02 Norm Schriever 

But wonderful. Yeah.

So we’re going to talk a lot about the common mistakes that you see over and over again that could actually come back to bite people or even hold them back from getting a mortgage and buying. And it’s such a long process there in Ireland that it’s so important you do everything correctly because one misstep on the bank statement or one, you know, timing error and they could actually disqualify themselves from buying.

 1:03 – 1:06 John Coleman

Correct.  That’s very, very true.

1:09 – 1:24 Norm Schriever 

Yeah. So I’m thinking of this.

First off, big picture. You’ve been doing this more than 20 years. How many people do you think you’ve spoken to about a mortgage and how many people have you actually helped loans a mortgage? These are probably big numbers.

 

1:24 – 2:06 John Coleman 

Oh my God. And I couldn’t, I couldn’t put a number on it or I would say we’re doing, we’re helping about, let’s do the maths on this.

I’ve never thought in those terms because you deal with people on a one on one basis. So it’s very much, I’m helping you, I’m not viewing you as part of a bigger number, but I would, from a business point of view, I’d know we’d probably help maybe 200 people a year buy a home. If you multiply that by 20, and I’ve been modest to myself, there were a few years where there was no business being done, so. Yeah.

2:07 – 2:10 Norm Schriever 

And that’s like 4,000 closed loans, give or take, right?

2:11 – 2:12 John Coleman 

Give or take.

2:12 – 2:16 Norm Schriever 

I’m guessing you probably speak to 20 people for every closed loan, right?

2:17 – 3:09 John Coleman 

Well, yeah, not, yeah, no, it’s not. I would hope it’s less than that, because ultimately that’s not a very efficient use of my time. But certainly not every single person I go to do I help, that’s for sure, because either people want to do it directly or you’re not ready and it doesn’t.

So I would obviously try to help as many people as we possibly can. God, yeah. God, Norm, you’re hurting my head asking that question, if it’s the truth, it’s an obstacle.

One on one, I deal with each person as and when they come my way. I don’t ever look at it as a sort of, oh my God, this is one person towards a bigger number, because you kind of have to treat every client as if it’s your first and every client as if it’s your last. And I think if you take that view, the numbers take care of themselves, really, you know?

3:10 – 3:32 Norm Schriever 

Yeah, absolutely. But so the point I wanted to make, too, is that you’ve actually spoken to or had a file open or helped or closed loans for a whole lot of people, thousands of people, we can confidently say. So I’m guessing you see the same three, four, five, six mistakes over and over and over.

3:33 – 4:58 John Coleman 

Absolutely. I suppose if I was to give you, in terms of the cardinal mistakes and then the kind of minor ones that can be fixed with a little bit of tender loving care, shall we call it, right? The cardinal mistake, again, is people trying to buy a house without knowing where they stand, do you understand?

Whereby they just think the bank are going to give them money and they’re not ready. OK, either they’re not, they don’t fully understand what they’re earning and how the banks will view it. That, for me, is a huge one.

Like people can be earning X amount of money, but if it’s structured in a kind of an overtime bonus, in that type of way, rather than just basic salary, they might think they’re banked over. There’s a sort of a rule of thumb that’s out there that’s slightly misleading. Oh, I get four times my salary.

Well, I’m earning a hundred thousand. Well, if it’s not quite as simple as that, so not educating themselves properly to understand where they’re at can lead to a lot of disappointment. So, you know how heavily I promote the roadmap that we do in terms of a starting point.

So, whether it be going directly into a bank, talking to another broker, talking to ourselves, before you begin out on the journey, you need to get, like the devil is always in the detail, right?

4:59 – 4:59 Norm Schriever 

Yeah.

4:59 – 5:41 John Coleman 

And knowing the minute detail as to where you’re at and going to the bother of actually teething all that out.

That, for me, is the most important starting point. And it can save so much time and cause so many problems where you think, I want to buy a house. Like people come up to me, they’ve agreed to buy a house and they’re not ready, right?

So, for me, I’m not saying talk to me, I’m just saying educate yourself first and foremost. But to me, even though it sounds like not a mistake per se, an individual mistake, it’s the fundamentals of knowing where you’re at is the biggest mistake that I would see happening.

5:43 – 6:05 Norm Schriever 

Yeah, interesting.  And I know that’s why the roadmap is so important, right? If you, to use that metaphor, if you don’t have that map and you’re just sort of wandering around and backtracking and your timing is messed up and you’re, you know, it’s definitely a process where you need to have every step, you know, sequenced correctly. What about with bank accounts?

What are some of the biggest mistakes?

6:06 – 9:25 John Coleman 

That’s my biggest, shall we say, pep talk, right? And there’s two elements to the bank accounts.

I’ll go to them in terms of where the bigger mistakes are made, kind of, well, not keeping your bank accounts clean, OK? People getting money in from friends, sending money to friends, sending money out of the country, all these things lead to questions. Basically, running an overdraft in your account, missing recurring kind of direct debits, being missed, that all adds to, like, let’s give you a kind of an overview as to how the banks will look at an application, right?

They want to know, they look at initially, how much will I lend that person, OK? That’s probably based on income, that’s tip one, OK? But that can’t be changed.

But you just need to understand where you are on that. Then the next thing is, OK, we want to lend to people who can manage their accounts properly, OK? It’s so that there’s money coming in, going out, living in an overdraft.

It’s not giving off that sense of, the profile of someone who looks after their money properly, OK? So keeping a clean bank account is what I would call the biggest mistake people make. They think, oh, I’m paying rent, I’m saving.

They’re sending money, they’re taking money out, they’re buying a car, they’re doing all sorts of things that just creates a problem. In real terms, it should, life will continue before and after you’ve got a house, and these things do happen. But when you’re planning to buy a house, you need to kind of be cognizant of the fact that I need my bank accounts to look as if we’re monks, basically.

We live a very boring life. We get up, we go to work, we don’t gamble, we don’t party. I’m killing the joy of life here, by the way, but it is all about how the bank accounts look.

So that’s the biggest mistake. Then the next kind of related piece to that relates to the ability to repay, OK? So you need to show most of the banks that, hold on, I’m going to borrow X, my repayments are going to be between $1,500 and $2,000 a month, whatever the amount may be.

How can I prove to the banks that I can do that? So say, for example, people are paying rent, but they’re paying by cash, or they’re paying it to a family member. Well, that kills that automatically, OK?

So you kind of need to be careful how you’re demonstrating your rent. Paying it to family is a real no-no, even though it shouldn’t be. The banks take a different view.

Now, there is one new bank that has come to the market that isn’t as worried about that. But I still want to be able to give my clients as much choice as possible. So it’s really, really

important that they are keeping their bank accounts clean and then that they are being able to clearly demonstrate to any individual who’s looking at your bank accounts over the previous six months that you can meet the repayments of a mortgage, you know?

9:27 – 9:46 Norm Schriever 

Interesting. Yeah, and that’s one of the big mistakes people make. What about when it comes to actually the property and negotiation and the seller?

I know you have some really good strategies, but on the flip side, you see people sort of shoot themselves in the foot and negotiate against themselves too often. That’s one of the mistakes.

9:46 – 12:15 John Coleman 

Yeah, and this is such an easy mistake to make and it’s completely understandable.

If you don’t buy a house every day of the week, it’s a once or twice in a lifetime kind of experience, right? So, yeah, it’s incredibly, you know, you’re not thinking it’s not like you’re going out to a shop and you’re kind of hardly looking to get the best possible deal. This is very emotional.

You’re seeing your future life there. You’re seeing your kids going up there. You’re seeing where the school year.

So you go to the picture for the next 10 years or so in this place, right? So you can, for me, the biggest mistake people make in these instances is bidding too quickly, right? Whereby they’re actually going in, they see a house the weekend, they gossip with each other and they go, wait, we want that, like we’re bidding on that Monday morning, right?

And I know my advice on that is, hold on, wait, wait, wait. Even though that’s what you want to do, it’s not always in your best interest, OK? Because if, for example, if there’s biddings the following, sorry, if there’s viewings the following weekend, well, you put a bid in now.

Unless you’re going to put a bid in that’s going to scare everyone off, right? All that’s going to be doing with your bid is it’s going to be used against you because then you’ll show it to the next person and say, by the way, we already have X on the market, you know? So it’s a game that needs to be played.

The advice I try to give to people on this is try to close it early. So try to call a deal with the agent saying, listen, what will it take if they really want it? Those that are early are coming to try and steal it off someone else at the end.

OK, that sounds terrible, by the way, but it is a, you are competing, this was obviously for second hand houses, you are competing with other people. So if you need to kind of try to do it early or come in at the end and steal it, acting in between is kind of, in my opinion, a mistake. Now, that advice is very generic in general.

You’re still, each sale has its own characteristics. So I wouldn’t want to say to people, listen to me and you’ll absolutely get the house, right? What I would say to you is take this advice on board and it will stop you making mistakes and give you possibly the best opportunity to make it happen.

Doesn’t mean you’re going to make it happen, right? But at least you won’t cost yourself the opportunity by putting it in too early, you know?

12:16 – 12:28 Norm Schriever 

No, it’s awesome.

Yeah, good information. And any other big mistakes that jump out at you or even mistakes that aren’t common, but you’ve seen someone really screw themselves? Well, pardon my French.

12:29 – 14:06 John Coleman 

Yeah, you’re fine, but you should hear my adverts sometimes. I haven’t, but not on podcasts of this serious nature, you know? How would I, yeah, well, these are kind of bank related, but we didn’t really, I didn’t highlight them any.

Well, one, gambling is a real no-no on bank accounts, right? So I would be strongly recommending if you’re betting, do it with cash. I’m not saying don’t gamble.

I have the odd bet myself. But from a mortgage point of view, it certainly isn’t, it’s not a good look at your bank accounts, right? And the other thing is, and that can cause a problem.

If there was any credit issues in the past where you might have got yourself, you might have had a revoked credit card or missed payments on particular loans. Really important to get a proper handle of that from the get go, OK, because that can come back and bite, right? And it’s, you think everything’s in good order.

And then suddenly there was a credit issue in the past that you just ignored. That’s a real, and people forget, by the way, right? They forget that there were problems.

And so if there’s any niggling doubts in someone’s mind, I would always suggest they run their own credit report. It’s free and it’s a credit register. And they just Google that and they’d be able to run their own report, free report, get it back in a couple of days and then they’ll see what the bank, because the bank will run that every time.

So they will see what the bank will see. OK. And obviously, we’re here to interpret it as well, if necessary.

14:07 – 14:29 Norm Schriever 

That’s great information. Yeah, avoid those common mistakes and even not so common, but very impactful mistakes. And the biggest thing they could do, the takeaway is give you a call, have an advocate, someone who’s done it thousands of times, like we’ve established, and have someone guiding you through the process to make sure you don’t mess up.

And so thank you, John, for that.

14:30 – 14:31 John Coleman 

Not a problem.

14:31 – 14:58 Norm Schriever 

All right, John, now on the Tea and Mortgage podcast, we might expand the name to the Tea and Mortgage and Squash podcast because you’re a lover of the sport.

And I know you’ve said to me many times your life is a whole lot of work and just staying at home. But you relish the time of day when you could leave and go play squash and get a great workout and be competitive. So tell us a little about your love of squash.

14:59 – 16:52 John Coleman 

Well, in fairness, it’s, well, I used to play a lot of, going back a while, I used to play tennis, I used to play badminton, and then a friend of mine was just, before Covid came in, he said he was going for the squash, and I went along and I haven’t stopped playing since, so that’s five years. Now, I was told by a doctor that it was the stupidest thing for a middle-aged man to take up squash, right? And within six months of playing, I was banjaxed for a while.

But during Covid, I started going to a physio, which was my outlet to get out of the house, and I kept to him, I go to him twice a week. So he’s kept me as flexible as possible, basically, and I’ve been relatively injury-free from playing, and I play it maybe three or four times a week. I have a guy that I take lessons from, and I am very competitive, but this guy is amazing, the guy that gives the lessons to me, like he’s far superior to me, but he structures the lesson in a way whereby he can only do certain things and I can do everything.

So it keeps me, it feels like I’m competing with him, where in truth, if you watch the tournament, it would make me feel like I was a 12-year-old, he could do it. But it’s a fascinating game, it’s really competitive for me. The joy I get out of it is, well, I am, as you mentioned once or twice, very competitive when it comes to sport, and my ego kept me sad when I could still beat these youngsters, but younger than me, you know, so that builds my ego on a daily basis.

And just the exercise, I wouldn’t be, like, I’m getting, I’m playing four or five times a week, so it is…

16:52 – 16:53 Norm Schriever 

That’s a lot, yeah, that’s a lot.

16:54 – 18:00 John Coleman 

Oh good, yeah, but I find the thought of going to the gym on a daily basis challenging, shall we say, and I need someone, I need someone competitive, I need someone there to be accountable to, like, I go to the physio twice and he does a lot of exercise with me, but if I didn’t have him, I’d like to be accountable to another human being, if that makes any sense, where if I’m just accountable to myself, I’d be sitting on the couch watching Garnet’s TV as a form of relaxation.

So, now, I got, I got good winds into a friend of mine, who’s an active guy, actually, he was representing Ireland, I think, in the, there’s a kind of a master series of over 30 or under 40s. And it’s very, very good as well as, as well, I’m on the same team with my coach, when I got hooked into sponsored effort, there was a big tournament over, so they were all over with their Ireland and JC Mortgages, which is sponsored by Jason Pooks, so I’m not sure it was, it was great for business, but it was great for my ego, yeah, yeah.

18:01 – 18:07 Norm Schriever 

Oh, that’s cool.

But that’s fun to have, especially as, you know, you’re a lot younger than me, but as we get not in our twenties.

18:08 – 18:09 John Coleman 

You’re so kind, mate, you’re so kind.

18:10 – 18:36 Norm Schriever 

But you know what I mean, like to have a sport or an exercise or, you know, that you’re really passionate about is so important, because just going to the gym every day and just sitting there and going through the motions, it gets boring, it’s hard, like you said, there’s no accountability sometimes, and it’s, you know, it’s just not really, doesn’t give you a spark.

So no matter what it is that you’re into, some people it’s rollerblading, some people it’s swimming, some people, you know, triathlon.

18:37 – 19:15 John Coleman 

Norm, I’m going to cut across for a second. One of the girls in my office just did the marathon there, right?

And I was incredibly inspired by her, kind of, oh my God, just blown away, and she’d been injured during the year and she overcame her injury and did it, and I was kind of, after seeing her doing it, I was kind of watching her time that she was doing, I was kind of going, gee, I wonder if I’d do the marathon, and I went to the ChatGPT and I’ve had a whole year of cloud, and then I got my way down to another game of squash, and I thought, what are you doing?

I thought, you’ve been thrown in, right, so we parked the marathon idea for the moment anyway.

19:16 – 19:58 Norm Schriever 

That’s a big one, yeah, when people hit middle age, that’s sort of like the last throes of I could still do it, and I’m long past that delusion, you know, but for me, it’s the equivalent to your squash, and it’s probably boxing, the training, I don’t like being hit in the face, I’m not a big fan of that, but, you know, just hitting the heavy bag, training, the, you know, the movement, it’s a really, really great sport to keep going, it’s easy on the joints if you do it right, so, yeah, I love getting out of the house, similar to you, after just working crazy hours, but getting out there, and sweating, and breathing, and forgetting everything, huh?

19:59 – 20:33 John Coleman 

Yeah, and that’s the, obviously, we’re dealing with, when you’re trying to help people buy a house, I take any kind of delays from the bank personally, as in, because it’s, I’m the messenger, so you almost, you take that on a very personal level, and people are, when they’re buying a home as well, it’s such, it’s so out of their comfort zones, that they can get stressed, so they’re, they just put their stress onto you, and you take that personally, and then suddenly, you just need a bit of, at the end of the day, get out of it, and just switch off from a,

20:34 – 20:59 Norm Schriever 

Yeah, it’s sort of like cleaning the slate, you know, it’s, whether for people, some people it’s meditation, or yoga, or, you know, or exercise, but whatever you’re, you love, and you’re passionate about, where you could just sort of clear the mental, or emotional slate, it’s so important, so, that’s great, yeah, one day, one day, I want to check it out, and I’ve never even seen Squash in person, so one day, I want to watch you play.

21:00 – 21:10 John Coleman 

Okay, well, don’t hold your breath, mate, in my head, I’m still good, but that could be delusional as well, you know.

21:11 – 21:16 Norm Schriever 

Oh, I might, I didn’t say, I’m not going to bet against you, you know, but I’ll watch you, and cheer you on, you know, we’re mates.

21:18 – 21:20 John Coleman 

And you’ll support me, I’m sure.

21:29 – 21:42 Norm Schriever 

All right, John, so that was episode number 23 of the Tea and Mortgage, and Squash podcast, though next month, it won’t be Squash podcast anymore, it was just temporary, but, yeah, thanks so much, that was great info, and that was fun chatting with you.

21:43 – 22:01 John Coleman 

Always, Norm I hope, people got some well, but we didn’t scare them, you know, through the thoughts of how they’re, how they’ve changed their bank accounts day to day, and how they have to live, like, monks for the next six months of their lives, but still good information in there to take away, and obviously, for any further clarifications, you know where we are.