What is the first question I should ask myself?
Before you jump into home ownership, it’s wise to take a moment think seriously about your current financial situation and how buying a house will affect it. Ask yourself the following questions:
- Is my income stable and do I have a monthly budget? Have I disposable income each month, or am I living from week to week?
- What’s my current rental payment and what can I reasonably afford for a monthly mortgage payment?
- Am I planning to live in the area for at least three to five more years?
- Will I have cash reserves left after closing in case the property needs repairs? Will I have money left to buy furniture and move?
- Is my employment situation stable? If I were to lose my job, do I have a safe fallback plan?
How can I get mortgage pre-qualification?
It’s easy! We will chat for ten minutes on the phone and, based on our conversation, I can give you a rough price range. I will ask you about the following:
- What line of work are you in?
- How long have you been at your job?
- What is your annual salary or other income sources?
- Where is your deposit coming from?
- What are your regular monthly debts such as car loans, credit cards and savings, rent etc.
- Is there any issue in relation to credit history that we should be aware of?
What paperwork will I need for my loan application?
To get started, we will need the following documents. Please email these items to us directly; we will send you a link to our Secure Web Portal:
- Three Months of recent payslips
- Employment Detail Summary (Formerly p60) for the last year
- Salary certificate from your employer, it must be stamped with a company stamp
- 6 months Current bank account statement, saving account statement and any loan or credit card statement.
- Photocopy of driver’s license/ Passport and proof of address
What is loan or mortgage approval in principle?
Once you have filled out an application, we will send it to the bank that we have chosen for you, they will proceed to underwrite your case and will then issue an Approval in Principle if they are willing to lend. An Approval in Principle means that the lender is willing to lend the money once you can comply with the conditions they set. Once you satisfy these conditions they will issue you a full loan offer.
How can I get a loan pre-approval letter?
- If you haven’t already found a home or just have an offer on it, we can apply to a bank to see how much would be the maximum mortgage amount that they would be willing to offer. Once an offer on a house is accepted, we can send in the house details and move the application on to loan offer.
- This will speed the process up and it makes closing a sale quicker.
Should I get a fixed or variable rate?
- One of your first decisions should be between a fixed rate (the interest rate and monthly payment remains constant for a set period of time normally between 1-5 years) or a variable rate (the interest rate is adjusted — either up or down — at specified times during the mortgage term).
- We review this at the application stage, and again at closing if there have been changes.
What are the advantages of a fixed rate mortgage?
- Easier to budget, since your payment is always the same for the set period of time.
- No possibility of an interest rate change making your mortgage during the term of the fixed rate
What are the disadvantages of a fixed rate mortgage?
- More income needed to qualify because of higher initial mortgage rate
- If interest rates go down charges may apply to get out of contract.
- If you make extra principal payments, you will shorten the life of your loan, and save on interest, but your monthly payment will not decrease.
What is the additional cost of getting a mortgage?
- Valuation Cost. The bank will look for an independent valuer to value the house and it normally costs approximately €150 which is paid by the client.
- Legal fees. Your solicitor will charge a fee for reviewing the legal documents and title of your property and mortgage allow approximately €1,500 for this
- Stamp duty.
- Our fee, this is based on a number of things. But, we operate a free service right up to application stage.
What happens after the loan offer?
- The bank will issue a legal pack to your solicitor, where you will sign it in front of your solicitor where he/she will advise you on it.
- Your bank will need a house insurance policy
- The lending bank will need a life insurance policy.
- A Direct Debit Mandate will need to be signed so the bank can take your mortgage payment.
- We will then work with your solicitor in order to get funds released.
When is my first loan payment due?
Your first payment is due the first day of the month after drawdown. Banks vary on dates, some banks go exactly on the date, i.e. if you drawdown on the 6th of the month then your first payment is due on the 6th of the following month. . Some banks however have set dates e.g. always on the 1st of the Month. Your bank will write to you to inform of the date.