FAQ


Should you get advice when taking out a mortgage.
Shane Lavin, Managing Director of Finance Company of Ireland and a qualified Chartered Accountant with over 35 years financial experience is a passionate advocate of the benefits of independent advice.

"Independent advice is at the foundation of consumer protection. It is hard to understand why one would deal directly with a lender who offers only their own set of products when you can avail of the services of an authorised mortgage intermediary at no cost. A mortgage intermediary searches the market for you, provides clear recommendations on products and lenders. understands the intricacies of products and manages the whole process through to completion. To me there is just too much money involved not to get independent advice."

In Ireland, we are often very slow to change our ways and habits and have a poor sense of outrage,  Despite the massive financial crash and subsequent scandals, still only 5% of customers switch their bank account or mortgage and over 70% of mortgages are still sold directly through banks

Fortunately more and more customers are using advisers like Mortgages.ie and we believe the market will be well served when most mortgages have been independently researched and advised upon before draw down.

Our website was the first website in Ireland to provide comparison information on Irish mortgages.
Over three million visitors have used our site to help them on their mortgage journey and we will continue to reinvest in technology for your benefit and the promotion of independent advice

Our mortgage intermediary business is regulated by The Central Bank of Ireland.



Where should I buy?
As part of our business we are in constant contact with home buyers. In Dublin there is a chronic shortage of houses, prices are very high and rental prices are probably at an all time high. Other major cities are feeling he squeeze also.

In this market buyers need to be very organised in their house hunting activities.

1. Mortgage approval  The starting point must be to arrange mortgage approval. If you are not ready for approval then you need to build a well organised plan to get there.This plan could range from increasing savings levels, paying off debt, moving job, engaging in further study - whatever it takes to put yourself in a  to buy.It will not happen by itself, you have to plan it.

2. Savings . When it comes to buying a house the price is usually more than you expect. Sometimes a few thousand euro can be the difference between clinching the deal and not and this is where the benefit of prudent savings habits comes in.
For those who are satisfied that they will qualify for a mortgage you need to check exactly what savings you will have at the time you expect to make an offer for a house and also clarify the availability of any additional funds - parental gifts for example. 

3.Areas where you want to live
A great exercise is to write down five areas where would consider living.
Rank the areas from 1 to 5 based on a range of criteria including for example, proximity to work, proximity to friends and family, schools, activities etc according to your circumstances

5. Elimination process
Starting at preferred area number 1, check if there are properties available in this location that match your budget. In this regard you need to know exactly what is happening in the property market  in this area. Check the property price register for details of closed sales, visit each auctioneers office in person. Location takes precedence in almost all circumstances, so as a general rule you should compromise on the house in favour of the location.

If you cant find a suitable house in location 1, move the process to location 2 and so on!

You may finish up in location 5 but at least you will understand clearly how you arrived at this decision.!

Will you take all of my salary into account?

In assessing a mortgage application the key consideration lenders look at is ability to service loan repayments.

In order to assess this, lenders review your current income and make estimations as to the likelihood of your income continuing into the future.

In considering income the following points are relevant:

  • Some overtime will be taken into account – depending on the pattern of overtime over time
  • 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 not to happy taking over 20% of commission in to account
  • Contract income is by it's very nature subject to uncertainty. For contract employment lenders will look at the nature and length of the contract /contracts and the probability of income continuances .
  • Other income to the extent it is verifiable and continuous will be taken into account.

    Please review the lenders products or contact one of our consultants.

Claiming your tax rebate under the help to buy scheme.
The Government help to buy  scheme is certainly well worth availing of if you are a first time buyer. We would recommend that all buyers interested in buying or building a new property should check out the details .here through this helpful link to the Revenue website.
Understanding Mortgage rates
Many buyers from all walks of life do not understand how mortgages work and the difference between various mortgage rate options.
Hopefully this explanation will assit you.

What is a mortgage?
A mortgage is a form of security taken by a lender on a property in consideration for having advanced funds to the borrower.

Details of the funds advanced and the terms of the advance are contained in an offer letter ,which when signed by both parties represents the contractual terms for the repayment of the loan. The key figures are the advance amount, the repayment term and the interest rate.



Interest.
A lender charges interest to the borrower in respect of the loan advanced.The interest rate is either a fixed rate or a variable rate.

A fixed rate will set a specified level of interest for a specific period during which the rate will not change. For example on a 30 year mortgage you may choose to fix your rate for 5 years at 3.35%. Your repayments will not change during that five year period.

Alternatively you may choose a variable rate of interest.
When choosing a variable rate you need to be aware that this rate is not fixed and may go up or down.

For example you may want to select a rate of 3.5% variable rate when starting your 30 year  mortgage as opposed to a 3.35% fixed rate because you feel that interest rates will fall and that either you will move to a cheaper variable rate of a better value fixed rate may become available.

Uncertain future rates
Future interest rates are uncertain. In Ireland the maximum term you can fix your rate for is currently 10 years.If you do not fix your rate at the outset you need to be  prepared for and to expect interest rate movements.

At present interest rates are historically low and the only way they will move over the medium term is upwards