What do the banks look for, for a mortgage?
Banks will look to see the applicant(s) are in secure employment, can demonstrate that they can afford to repay the mortgage, have a good history with loans and financial products, and can enjoy a quality of life with this mortgage
Who are the best mortgage lenders?
Each bank offer different mortgage rates and terms and conditions so it is hard to say who is the best but the advantage of going to a mortgage broker is that they should outline these to you so you can decide which is best for you. For example, are you looking to get the max available which may differ from bank to bank or are you looking for the lowest mortgage rate?
Does it cost to go to a mortgage broker?
Some mortgage brokers charge application fees, however we at getamortgage.ie do not. We get paid a commission from the bank for introducing the mortgage to them. This does not affect the rates or terms for you as they are the same if you went directly to the bank or through a mortgage broker.
Which banks have the best mortgage rates?
Once again this depends on what you are looking for. For example, one bank might have low variable rates whilst another might have low fixed rates.
How much can I borrow?
The Central Bank rules state the maximum a bank can lend is 3.5 times your salary or if both applying your combined salaries. However, each bank differs slightly on how they treat variable income such as overtime or commission or annual bonus
Also, you may be offered an exception to this (see below).
So once again speaking to a broker is advised as they can go through these variances with you.
How long can I borrow for, what is the max term for a mortgage?
This depends on your age. The maximum term is 35 years. Some banks will lend to an age of 66 whilst others will go to 70.
What are the costs associated with a mortgage?
- Time – do you go to each bank separately or go to a mortgage broker? can you meet outside work hours?
- Valuation fee – whilst one or two banks may cover this, generally you are expected to pay it. The typical cost is between €130 and €150
- Solicitors fees – you must engage a solicitor for a mortgage and there fees plus associated costs must be borne by you. Whilst each will differ a good estimate would be €3,500
- Stamp duty – this is the government tax for purchasing the property and is calculated at 1% of the purchase price
- Structural survey – depending on the age or condition of the property this may or may not be required by the bank, however for most second hand purchase we recommend them
Do I have to pay to apply for a mortgage?
The banks do not charge and whilst some brokers might charge a fee we at getamorgage.ie do not
What deposit do I need?
If you are a first time buyers you will be expected to pay a deposit of 10% of the purchase price (this can include the help to buy scheme).
If you are you partner have bought a house previously the deposit is 20% of the purchase price, unless you qualify for an exception (explained below)
What is a bank valuation?
When you have gone sale agreed on a property and now want a loan offer from the bank, the bank send a valuer (Estate Agent) to the property to assess it and ensure the price you are paying for it is accurate in the current market
What is a building/structural survey?
This is where a professional (Architect or Structural Engineer) checks the property to ensure it is structurally sound and that there are no major defects with it
Do I have to get a structural survey?
It depends. If the house is over 100 years old or the valuer has noticed something in their report the bank might ask you to get one done.
For second hand houses we usually advise customers to get a survey carried out. This is probably the biggest purchase of your life so you need to make sure the house is up to scratch.
How much does a survey cost?
Varies – approximately €350 + vat = €430
Where should I keep my savings?
In a bank or credit union account in your own name
How much is stamp duty?
1% of the purchase price up to €1 million and 2 % above this, however if buying from a family member this may reduce and you should consult your solicitor
If I do not bank with the bank will they consider me for a mortgage?
Yes, they want your business to. In fact sometimes it can work in your favour by going to a bank you have not dealt with before as they will only be assessing you off your last 6 months of statements and not historical transactions.
Does it matter if I live at home?
No, once you can still demonstrate repayment capacity (the ability to repay the mortgage) through savings etc.
Can I get a gift? And who can I get a gift from?
The banks will typically be ok with you receiving a gift (not a loan) from a direct family member i.e. a parent, a brother/sister or an aunt/uncle
Is there a cap on the amount of gift I can get?
No, but you are liable for tax if you go over the thresholds applicable, therefore you should speak to an adviser/solicitor about this when applying for the mortgage
What is an exception?
An exception is where the bank will look to break one of the Central Bank rules i.e. the amount they will lend you (more than 3.5 times income) or the deposit for second time buyers (reducing the deposit from the 20% to 10% or in between)
Banks can only apply exceptions to 20% of their business in a calendar year, so they are limited.
How do mortgage exceptions work? Will I qualify for an exception?
This is at the discretion of the bank and as they all have different criteria you should speak to a broker as to what might be available to you
What does loan to value mean?
The loan to value is the ratio (percentage) of the mortgage/loan against the value of the property. For example a property with a loan €150,000 and which has a value of €200,000 will have a loan to value of 150,000/200,000 = 75%
The lower the loan to value the less the perceived risk to the bank, and therefore you will, in most cases, get a better are of interest.
What is a variable rate of interest?
A rate of interest that will rise and fall during the term of the mortgage. Variable rates offer a lot of flexibility as they allow you to over pay your mortgage or use lump sums to pay the mortgage down quicker at no cost to you.
What are discounted variable rates?
These are variable rates that have a discount applied to them typically for those mortgages with a lower loan to value.
What is a fixed rate?
This is where you fix the rate of interest on the mortgage and with that the repayments for a period of time.
During a fixed rate period your repayments will not be affected by market rate changes and will not rise nor fall.
Also, as it is a fixed contract you cannot make any over payments against the mortgage and if you look to move house or bank during the period a break fee may apply.
Should I fix my mortgage rate? And if so, for how long?
It depends on your circumstances, your attitude to rate rises and the rates being offered by the applicable.