Mark Solon is the founder of Symmetry Financial Management. Here Mark discusses how you can smoothly and quickly get the mortgage for your dream home.
How much can you borrow, what deposit do I need, how can I get approved ASAP? These are among the most common questions we are asked and which we will address below.
1. What you can borrow: As an individual you can borrow 3.5 times your salary or if in the case of a couple, 3.5 times your combined salary. So for example a couple with a combined income of €100,000 can borrow up to a maximum of €350,000. In a limited number of cases the banks are allowed provide an exemption.
2. How much of a deposit you will need: as per the central bank guidelines:
First-time-buyers need to have a minimum deposit of 10%
Second and subsequent buyers need to have a minimum deposit of 20%
Buy-to-let buyers need to have a minimum deposit of 30%.
3. First-time buyers grant: the help to buy grant is available to first time buyers within (but not limited to) some of these conditions as per the revenue website; to claim HTB, you must:
be a first-time buyer
buy or build a new property between 19 July 2016 and 31 December 2021
live in the property as your main home for five years after you buy or build it
be tax compliant, if you are self assessed you must also have tax clearance.
4. Documents: The process will be a lot quicker and smoother if you have all the necessary documents in advance. You will need the following documents when applying for your first mortgage:
A proof of ID, proof of address and proof of your Personal Public Service Number (PPSN)
Your proof of income: e.g your latest P60, payslips or certified accounts if self-employed
You will need to show evidence of how you manage your money such as current and loan account statements for the last three to 12 months, depending on the lender. This will help demonstrate your capacity for repayment of the mortgage.
5. Insurance: Mortgage protection insurance is an insurance policy that pays off your mortgage if you or another policy holder dies during the term of the mortgage. Except in certain circumstances e.g you already have life cover or it's an investment property,
by law, your lender must ensure you have this cover in place when you take out a mortgage.
For those who already have a mortgage, it can also be a very useful exercise to examine what you are paying and how you might be able to save by switching.
In some cases by negotiating a better rate for your mortgage you can save a huge amount over the long term.
As per the excellent CCPC website, it demonstrates how just a 0.5% difference in the cost of a 20 year mortgage could save you €11,853. A broker can help you navigate this smoothly and painlessly.
If you would like to book a virtual appointment to discuss your mortgage with us you can do so by emailing me at email@example.com.