Will you qualify for a mortgage?
The key to qualifying for a mortgage is to be able to provide clear evidence that you can comfortably afford the repayments on the mortgage loan. Please read the notes below.
Our responsibility as mortgage advisers is to act in your best interests.
Our role includes advising you in the following areas:
- Mortgage affordability
- Presentation of applications and arranging approval
- Choosing the best rates
- Selecting between variable and fixed rates
- Selecting mortgage terms
- Choosing a lender
- Selecting appropriate insurance products
Current lending criteria notes are set out below. .
1.Minimum Income levels
In practice it is very difficult to arrange a mortgage where income is below the following levels :
- Single applicant €30k
- Joint Application €45k
This is not set in stone but we find that lenders will not favourably consider applications with income below these levels unless there are significant savings and a low mortgage requirement.
2. Deposit requirements
The maximum mortgage available is 92%.For most lenders the maximum facility is 90% of the purchase price,
- Your deposit should usually be sourced through savings although it is acceptable to have a certain element of your deposit funded by way of a gift.
- If you own a site and wish to build your own home ,100% of the building and development costs are available. However lenders like to see a proven capacity to save.
3. Proven ability to repay
- As a rough guide every €100,000 borrowed could cost €550 per month . (200k could costs €1100.etc ) Cheaper rates are available at present but lenders assess an application assuming rates rise by a further 2.25% over current levels.
- You need to be comfortable that your regular savings and / rent payments equal the proposed repayments?
- Consider how your bank accounts would look your if a mortgage payment was applied each month ?
- Use our mortagge repayment calculator to view all the latest mortgage rates
4. Financial Management
- Well managed current accounts evidenced through 6 months of statements
- A good consistent record of regular savings
- Avoid overdraft facilities, but if you have one, please ensure that it moves to a regular credit balance.
- Prudent spending habits.
- Regular clearance of credit card bills.
- A minimum of personal loans.
5. Income and Employment
- Employment should be full time and permanent..
- Employees in certain sectors are experiencing difficulty in securing mortgages, (e.g. construction).
- Focus is on basic income as opposed to bonus, overtime or commission.
- Contract employees will not currently get mortgage approval unless it can be demonstrated that it is a contract with a state body considered a contract of indefinite duration.
6. Credit history
- Unnecessary or large credit card balances will work against you.
- Personal loan repayments may severely limit borrowing capacity.
- It is very important to have no payment arrears.
- Lenders will not consider applications where there are unpaid direct debits.
7. Life Style issues - living within your means
- Lenders look closely at your current account statements.
- It is no harm to live frugally prior to a mortgage application.
- Avoid on-line gambling at all costs.
- Keep your accounts in credit to display your money management ability.
- Your accounts should be able to demonstrate that they can take a mortgage payment (replacing savings or rent).
What documents do I need?
- Document checklist
- Salary certificate for completion by employer.
- Accountants report if self employed
We recommend that you download and print the above documents to get you started .
What if you don't meet the above requirements?
- Don't panic. It may be a long road but you will get there.
- Write down the areas where you are falling short on a piece of paper and make a plan to rectify the position..
- If it is a lack of savings - start saving and cut back on spending.
- If you have loans or credit card debt, get rid of these first.
- If you are not in permanent employment talk to your employer about your circumstances
- If you are in the way of obtaining a gift, find out for certain if one is available and for how much.
- Consider moving back home if renting in order to save a deposit.