5 tips on getting a mortgage
Times have been tough for people looking to buy houses in recent years. Yes, prices have come down a lot since the Celtic Tiger days and also interest rates are at historic lows, which are both good news for borrowers. However on the other hands, getting a mortgage in recent years has been a difficult process, with banks only interested in lending where a whole heap of conditions are met. And then those super-low interest rates have been quite elusive for new borrowers, with banks loading on a margin to make up for their disastrous tracker mortgage books.
There was a rare ray of light for first time buyers of new homes and self builds in the recent budget. They can now claim an income tax rebate of 5% of the cost of the house, to a maximum rebate of €20,000. When announced, the rebate would apply to all houses being bought for less than €600,000. However it is now anticipated that this amount will be reduced to homes valued at less than €500,000. This initiative will help borrowers when trying to get their deposit together, which typically will be about €100,000 required on a €500,000 house. So some good new for borrowers, but what can you do to increase your chances of securing one of those elusive mortgages?
Show a strong savings record
This one is really important. Banks want comfort that you’ll actually be able to repay the mortgage. And they get a lot of this comfort from visibility of a consistent and sustained savings record. So if you’re likely to want to get a mortgage in the next year or two, it’s time to get saving… Showing an ability to pay rent on it’s own is not enough!
Make sure your income stacks up
Banks like certainty. They like lending to people who have stable incomes. In recent years, it has been much easier for people in the public sector to get mortgages, as their incomes are seen as secure. Of course income levels are a critical factor too, as banks are quite strict about the multiples of income that they will use in calculating your maximum loan amount. But stability of income really counts. So if you are thinking of giving up your job and launching your own business, do this after you’ve secured your mortgage!
Don’t damage your credit rating
This is a really important tip. Whatever you do, don’t damage your credit rating by missing a payment on a car loan, not staying within the repayment terms of your credit card, or not paying your bills on time. All of these are a huge red flag to a bank and will severely damage, if not destroy your chances of getting a mortgage. So be squeaky clean financially when you’re looking to get a mortgage.
Have all your ducks lined up
Make sure you have all your paperwork in order. And keep it all together. It’s also a good idea to keep copies of all correspondence. Also make sure that you haven’t forgotten other expenditure that the bank might trip you up on – so make sure you take account of all of the fees that will be payable when buying your home – your solicitor’s fee, stamp duty, home and life insurance and any valuation and surveyor fees.
Get independent advice
And we’ve kept the most important tip until last. We can do all of the donkeywork for you! We can make sure you have all of those ducks lined up, anticipate any nasty surprises that the bank are likely to throw at you and give you the very best chance of securing that possibly elusive mortgage. And apart from that, we’ll also help you get the most competitive rate and terms possible. Getting a mortgage is an extremely time consuming process – why not let us do the work for you?
We hope these tips help you get a mortgage, and enable you to buy that house of your dreams!