- Interest rate expectations
- Reasons for choosing mortgages.ie
- Which lender offers the best mortgage package?
- What will happen house prices?
- Which mortgage calculator should I use?
- Where are your mortgage consultants based?
- Do you provide finance for Foreign Property Investments by Irish residents?
- Do you provide finance for Non-Residents buying a property in Ireland?
- What classes of mortgages are available?
- What documents will I need to support a mortgage application?
- Costs associated with a mortgage?
- Which rate should I choose?
- How much can I borrow?
- How long does mortgage approval take?
- What documentation will I need?
- Do I need to have saved a deposit?
- Tell us more about Mortgages.ie?
- What about buying in Nothern Ireland or the UK
- What are the steps involved in the mortgage process?
- What are lenders' normal lending criteria for a mortgage?
- What is your policy on consumer protection issues?
- What if I have a history of arrears?
- What is the stamp duty payable on mortgages?
- Explain flexible mortgage options
Interest rate expectations
October 2011 ( Current Euro base rate 1.5%)Our best estimates on the prospects for euribor base rates are as follows:
- End 2011 euribor 1.5.%
- End 2012 1.5 %
- We also expect lenders to look for margins in the region of 2.25% to 2.5% over euribor.Recently the Central Bank has intervened to slow down excessive variable rate increases.
Reasons for choosing mortgages.ie
Customer service is at the centre of our business.You deal with a dedicated experienced consultant from start to finish.Our role is to get the best mortgage deal for your circumstances.
We employ excellent staff who understand the mortgage business and who are absolutely committed to customer care. Reasons for choosing us include:
- Access to excellent mortgage rates available.
- Access to a wide range of life insurance and home insurance companies.
- Highly experienced management team .
- Established in 1996.
- Regulated by the Central Bank of Ireland
- Meetings at times to suit you ,outside office hours
- Mortgage tracking facilities.
- Most advanced on line comparison facilities
Which lender offers the best mortgage package?
The Irish market is in danger of becoming uncompetitive .
Large banks are pushing up margins in order to make up for bad debts and to strengthen their balance sheet.
It is extremely important that mortgage holders look for independent advice in this changing environment.
A number of very competitive smaller lenders also operate in the market and many do not carry the baggage of larger lenders and may therefore represent a safe long term home for your mortgage provider.
A number of lenders have left the market, some for the short term by introducing very high rates and others,as in the case of Bank of Scotland/Halifax -gone forever,
Hopefully with the level of house prices in Ireland coming down to realistic prices and with lenders now operating off higher margins ,some new entrants will arrive pushing down mortgage rates once again.
No single lender can claim to offer the best package. There are significant differences between lenders in regard to lending criteria. Our role is to advise on a mortgage product that best suits your needs.
Summarising the current position
Bank of Scotland have exited the market and mortgage holders should switch if they can obtain a competitive option.
Aib are here for the long haul
BANK of Ireland are in a similar position to Aib
ICS ( a subsidiary of Bank Of Ireland) is committed to continued development
KBC are particularly strong in the re-mortgage area and are recruiting
Permanenttsb are now expensive,not offering fixed rates to first time buyers and are effectively in a depsoit taking mode rather than a lending mode.
First Active have merged with Ulster and are expensive.
Ulster Bank,now owned by the the multi billion loss maker RBS Group have also moved to price themselves to reduce new business volumes.
GE Money are no longer in the market.
Nib have also lost a fortune and will continue to do so because of their crazy tracker mortageg book
Over 10 years ago we set out a number of issues to consider when choosing a lender. At the time we included committment to the Irish market and one can see now how imortant this is.The last thing you want is to sign up for a mortgage,watch as the lender starts charging over the odds and find that you cannot switch to a cheaper lender.
These points still hold with the addition of the long term financial stability a new consideration.
Matters to be considered when choosing a lender include:
- Lenders lending criteria
- Current mortgage rates - both new business and existing customer rates
- History of rates compared to the rest of the market
- Market experience of lenders - commitment to the Irish market
- Product flexibility
- Service factors including speed of which mortgage can be processed and service throughout the life of the mortgage
- And finally -the lenders medium term plans for their own business,
- Long term financial stability.
What will happen house prices?
Little did we know in 2007 that we were just around the corner from the greatest credit crisis seen since the great depression .It was evident back then that house prices were running out of steam but the implications of the credit crunch caused by sub prime lending in the US and unregulated money markets was not forseen here in Ireland.
We expect house prices to fall to between 35% and 45% off their peak prices.
We wrote this article in early 2007
"The start of 2007 has seen the first signs of houe prices actually dropping for many years.
The uncertainty created by political statements on stamp duty probably started the slowdown but the reality of interets rate rises with more to come has had a more significant impact on prices.
Houses are becoming difficult to sell,banks have cut right back on bridging facilities and first time buyers are waiting until after the general election to see if there is any potential stamp duty savings out there.
So it is not surprising that house prices are coming back."
Which mortgage calculator should I use?
Mortgages.ie have a large range of innovative calculators developed specifically for the Irsih mortgage market.
mortgages calculators.
I. Mortgage repayment calculator
This is an extremely useful tool when comparing mortgages.Special features include the ability to compare mortgages true costs by analysing the real rates over the life of a mortgage unlike conventional calculators which only look at opening rates.
How much can I borrow?
The second most popular mortgage calculator is the how much can i borrow calculator.This is highly database driven and looks at a whole range of borrwing capcity calculators offered by major lenders and selects a borrowing level at the maximum level available.The calculator also shows the effect on borrowing capcaity of existing current borrowing levels and results also allow for interest rate increases.
Remortgage calculator
Our third most popular calculator is the remortagge calculator which works out the cost of your new mortgage and compares it with existing debt repayments.
Switch and save calculator
Our switch and save calculator calculates the benefit of simply switching to the cheapest lender available.It is quite amazing the savings that one can make over the life of a mortgage through switching.
Where are your mortgage consultants based?
Our mortgage consultants are available throughout Ireland.Our business combines the benefit of internet technology with unrivalled personal service in that while on the technical side you can track exactly what is happening with your mortgage, on the service side you have the benefit of meeting our experienced consultants in person at times and places to suit your life style.
The role of the consultant is to deal with your queries and work through the options available so that the mortgage you choose meets your needs.
Whilst our consultants are based around the country and available to you ,the mortgage processing is carried on at out mortgage centre in Dublin.
With on line tracking you will always be able to track the progress of your application.
Do you provide finance for Foreign Property Investments by Irish residents?
In certain circumstances, foreign banks are willing to advance in the region of 70% facilities to Irish residents buying properties overseas.
We can assit you with mortgages and remortgages in France and Spain.
Irish banks will only fund overseas property by taking security on existing property in Ireland. We can provide facilities in this area.
Mortgages in the Uk or Northern Ireland can be funded up to a maximum of 80%.
Do you provide finance for Non-Residents buying a property in Ireland?
Most lenders will not consider non resident applications.
As a broad guide ,In todays market ,lenders will only consider applications where income is greater in the region of 75k and you have significant savings
Many non-resident mortgages are for investment purposes, perhaps with the intention of returning at some time in the future with the property initially being available for rent. In such instance, mortgages are usually charged at the investment mortgage rate, which is typically ½% higher than home loans and may not attract some of the discounted offers available to resident home owners.
With e-mail and fax facilities, there is no reason to expect any significant delays in processing non-resident applications.
The main difference is the percentage loan to value. Non resident maximum loan facilities are usually 75% of the purchase price.
What classes of mortgages are available?
1. Annuity Mortgages:
- Majority of mortgages in Ireland are Annuity Mortgages
- Interest and capital are repaid over term of mortgage. In early years bulk of repayments represent interest
- Not exposed to stock market fluctuations 2. Pension Mortgages:
- Repay interest only over mortgage term
- Suitable for Self-Employed
- Pension fund builds up over life of mortgage
- Pension lump sum on retirement used to clear mortgage
- Tax efficient
- Professional advice essential - taxation, pensions etc. 3. Endowment Mortgage:
- Repay interest only over mortgage term
- Exposed to stock market
- Less popular today than in the past Interest Only mortgages
These mortgage facilities are set up so that only interest is repaid and thus the capital element of the mortgage remains constant .
Historically these mortgages were used by investors but short term interest only facilities are available froma number of lenders for first time buyers.
Offset mortgages
These mortgages allow credit balances on deposit/current accounts to be used to reduce interest payable on the mortgage loan.
Capped mortgages
These facilities give the customer an option to limit the exposure to interest rate rises by capping the upper interest rate payable on a mortgage while at the same time leaving room for interest rate reductions should rates fall.
What documents will I need to support a mortgage application?
Please visit our customer area to download documenst and appliaction forms.Document downloan area
For your informatiomn the following documents are needed in support of a mortgage.
1. Signed Application form
2. Latest P60
3. Recent Payslips x 3
4. Completed Employee Status forms
5. ID - 2 forms - Photo and Utility Bill
6. Recent statement of ALL loans outstanding including mortgage statement
7. Evidence of Savings e.g. copy of deposit book etc
If you are Self-Employed:
1. Up to date accounts
2. Recent bank statements
3. Completed Auditor's Reference Report
If you are building your own house:
1. Copy of Planning Permission
2. Architect's Drawings
3. Building Contract
NOTE: We will provide you with the application form for signature together with Status Forms for your Employer.
Costs associated with a mortgage?
Mortgage Company of Ireland charge a standard arrangement fee of €499 .
This fee covers all costs from initrial consultation through to cheque issue,
Deposits
Savings are a key part of the mortgage process. Whereas banks currently place less reliance on savings than in the past, the discipline of saving cannot be underestimated.
A steady savings record helps an application. Banks may require evidence of the deposit in the form of savings books etc as part of the loan underwriting process. Loans from parents very often form a part of the deposit. Savings also reduce the necessity for short term borrowing which may have a strong impact on cash flow following a house purchase.
10 (b). Stamp Duty Rates - see our stamp duty calculator
10 (c). Legal Fees - see our legal fees calculator
10 (d). INDEMNITY BOND
Indemnity Bonds are insurance policies taken out by the lender to insure against a potential loss in the event of a forced disposal of the property. Lenders only take out such bonds when the loans exceed 75% of the value of the property (which is highly likely for first time buyers). Many lenders waive indemnity bond charges.
10 (e). SURVEYORS FEES
It is recommended that you employ the services of a qualified surveyor to check the property for any structural problems or to advise you on any matters that may involve significant outlay e.g. dry-rot, subsidence, dampness etc. The structural survey is usually not a condition of the loan offer and is a completely different matter to the valuation, which is carried out on the lenders behalf. Use a reliable firm, agree their fees at the outset and insist on a written report. Budget ¬300 approx.
10 (f). VALUATION FEES
Before a lender will issue a formal offer letter in respect of a property, they require an independent valuation from a qualified valuer. We will arrange this for you. Budget ¬125 approx.
LIFE ASSURANCE
Lenders require mortgage holders to take out a life insurance policy. This policy provides for the repayment in full of the mortgage in the event of death of one of the mortgage holders. You are not required to take this policy out with the mortgage provider.Please see our life insurance on our home page. Mortgages.ie act as an intermediary for 6 of Ireland's leading Life Companies.
HOME INSURANCE
The lender will also require that you take out a building insurance policy on your house and that the interest of the lender be noted on the policy. We have an exclusive home insurance arrangement with Glennon Insurances and through our membership also offer A special home insurance product underwritten by Hibernian.
Which rate should I choose?
One decision which needs to be made is whether to choose a variable or fixed rate mortgage.
There are several factors to consider in making your choice. Future interest rates are uncertain and fixing interest rates should be considered in the following circumstances:
- Where mortgage repayments represent a major portion of net income
- Where mortgage levels are large > Euro120K
- Where there are general feelings that interest rates will rise
- Where rates are historically low
- Where client is risk averse Most lenders offer products, which allow you split your mortgage into fixed and variable elements. It is important to bear in mind that breaking a fixed rate contract may involve penalties. Please click here to view current mortgage rates.
Your mortgage consultant will discuss the various options open to you.
How much can I borrow?
The key consideration for you is to be happy that you can comfortably afford your repayments. To calculate your borrowing limit please review our how much can you borrow calculator. Lenders look at two main areas when considering an application.
1. Income
2. Loan to Value
Income
Lenders look at both gross income and net income. As a guide lenders will advance between 4.5 and 5 times combined gross income. In reviewing net income repayments on all borrowings including the proposed mortgage should not exceed 40% of net income.
- Some overtime will be taken into account
- An element of bonus, to the extent, it is guaranteed, will be taken into account
- Consideration will be given to length of employment and security of employment
- For commission based income - lenders estimate normal income levels Loan to Value
Loan to value is the mortgage expressed as a percentage of the property's value. The lower the loan to value the lower the risk to the lender in a mortgage .However Irish lenders are primarily concerned with repayment capacity and will only sell a property as a last resort.
A point worth noting is that a low the loan to value ,may result in you obtaining a lower mortgage rates when opting for a tracker mortgage.
How long does mortgage approval take?
Use our calculators to estimate your borrowing capacity and review the typical lending criteria above. The next step is to give us a call or complete our secure on line application Based on the information we will generally be able to advise you straight away whether you will qualify for a mortgage and we will also provide you with an estimated borrowing limit. Our consultant will then advise you of the precise information required (see point 11 below) and make an appointment to meet you. At that meeting our consultant will explain the various options available and will guide you through the completion of any application forms required. We will then submit the applications to the chosen lenders and we would expect formal approval in two to three days.
What documentation will I need?
- Signed Application form
- Latest P60
- Recent Payslips x 3
- Completed Employee Status forms
- 6 months current account bank statements
- ID - 2 forms - Photo and Utility Bill
- Recent statement of ALL loans outstanding including mortgage statement
- Evidence of Savings e.g. copy of deposit book etc
- If you are Self-Employed:
- Up to date accounts
- Recent bank statements
- Completed Auditor's Reference Report
- If you are building your own house:
- Copy of Planning Permission
- Architect's Drawings
- Building Contract
- NOTE: We will provide you with the application form for signature together with Status Forms for your Employer.
Do I need to have saved a deposit?
The deposit required to purchase your new home varies with each lender.
The average borrowing amount is90% although anumbe rof lenders will offer 90% facilities. You can review our lenders section to compare each lender.
Tell us more about Mortgages.ie?
Researching the market to provide choice!
Mortgage Company of Ireland acts as an impartial advisor in regard to the mortgage products available from Ireland's major mortgage lenders. Our recommendations are based on an assessment of the suitability of a mortgage product to meet your unique requirements. Our focus is on the long term value of the mortgage product. Our website reflects our committment to bringing you all the latest news and information on the Irish Mortgage market to assist you in making an informed decision on the range of mortgages available in Ireland.
Experience
Mortgage Company of Ireland is part of the Finance Company of Ireland group of companies. The group commenced trading in 1996 and has gained a strong reputation in both business and consumer finance. Our product range includes mortgages,life assurance ,leasing , commercial mortgages and carfinance.
Our management team is headed by Shane Lavin . Shane is a fellow of the Institute of Chartered Accountants in Ireland and has over 25 years experience in Finance and Banking.
Service
We pride ourselves on providing an unrivalled professional service to our clients.
1. If visiting our offices does not suit you, we will meet you at a location and time of your choosing e.g. evenings or Saturday mornings if required.
2. Each application is allocated to an experienced mortgage consultant .
3. Your dedicated consultant and your appointed administration support consultant will be avilable to you will deal with your application from start to finish.
4. We provide fast decisions and deal promptly with all relevant matters.
5. It is our policy to meet with all our clients in person.The main exception to this policy is in regard to overseas clients where this is not a practical position
6. We strive to build long lasting relationships founded on our customers satisfaction with the service levels and products we provide .
Fees
Our professional fee for processing amortgage is 499 euro per application.
Special circumstances mortgages( arrears history e.t.c.)may attract an additional fee .
All fees are agreed in writing with our clients prior to processing..
What about buying in Nothern Ireland or the UK
Property markets have declined extremely sharply in Northern Ireland.Prices are also down in the Uk and any propsed investment needs to be closely analysed with careful consideration given to price movements in the location and the availability of tenants and reasonable lease conditions.Maximum facilities are 80% of purchase price.
What are the steps involved in the mortgage process?
1. Make a decision to buy property
- Once decision is made, start saving
- Forgo entering into new loan agreements whenever possible
- Keep a close eye on property market
- Establish your property goals
- Review our site in detail - lending criteria, borrowing capacity, costs etc
- Complete loan application form
- Quickly assemble all information needed to support your application
- Choose lender in conjunction with Mortgage Company of Ireland
- Obtain formal approval in principle
- Choose your preferred location and match borrowing capacity with property goals
- Be prepared to negotiate aggressively
- Don't rush or buy when you are not convinced
- Be prepared to stretch - the property you want is usually just beyond your reach
- Obtain approval in respect of the chosen property
- Engage a Solicitor-our site has details and contact names of a range of solicitors
- Read contracts and offer letters before signing ask questions if you are not happy
- Sign contracts for purchase
- Sign Loan Offer Letter - arrange house and life cover
- Close sale and draw down mortgage
- Move in
What are lenders' normal lending criteria for a mortgage?
1. Good Credit History
2. Age 21 or over
3. Age not greater than 70 at end of mortgage term
4. Ability to repay - as a guide repayments on all loans including your mortgage should not exceed 40% your net income
5. Secure employment
6. Continuous employment for 2 yrs
7. 100% mortgages are available to certain first time buyers and qualified professionals.
8. Non-Residents 80% of property value
The primary focus is on repayment capacity.
What is your policy on consumer protection issues?
Our Business is regulated by the Financial Regulator.
The Financial Regulator is completely committed to ensuring that the mortgage market operates in an open and competitive environment.
We operate in this market as a regulated mortgage intermediary and are subject to the rules and operating procedures laid down by the Regulator.
We run our business in the spirit of providing our clients with clear unbiased transparent advice and our systems have developed and continue to be developed to meet this key requirement .
What if I have a history of arrears?
In recent years a number of lenders have introduced mortgage products into the market designed specifically for non-standard mortgage applicants.
Non standard mortgage applications include applications from individulas who have a poor credit history or for certain self employed individuals who may have difficulty vouching income.
The lenders will consider mortgage applications in such circumstances provided they can reasonably see regular income which is sufficient to meet the proposed mortagge committments.
These mortgage products are more expensive than conventional mortgages with the rationale form the lenders perspective being that they are a higher risk catagory and may require additional administration.
Mortgage Company of Ireland are authorised by GE Money in respect of their non-standard mortgage product and will be pleased to act as intermediaries in such applications.
Applications should be completed on our standard application form with specific circumstances included in the comments area of the form.
What is the stamp duty payable on mortgages?
There are two forms of stamp duty associated with buying a property.
- Stamp duty on the property transfer...see our stamp duty calculator on the home page to calculate any liability.
- Stamp Duty on the Mortgage Document
Stamp duty is paybale on mortgages exceeding €254,000. All mortgages exceeding €254,000 are subject to a stamp duty rate of 0.1%, rounded down to the nearest zero, to a maximum of €630.For example a mortgage of 500k would attract stamp duty of 500 euro.
Explain flexible mortgage options
Lenders have introduced a range of flexible options into their mortgage products to cater with changing circumstances within a mortgage.These include...
- Payment break at start of mortgage.First time buyers can avail of a scheme whereby they pay nothing for the first six months of their mortgage.
- Interest only payments for the first three months of a mortgage
- Skipping months.By adding a little extra to your mortgage each month you can skip up to two monthly payments in a calender year.This might help at holiday time or at the start of a year when many bills semm to come together.
- Lump sump payments (ssia for example)can make significant reductions in the long term interest you pay and in the actual mortgage term itself.
- Regular overpayments can also have a significant impact in reducing your mortgage term