1. ENGAGE A SOLICITOR
Shop around and price up a solicitor at the earliest possible date as once a booking deposit is paid we’ll be requesting your solicitor information
2. HAVE YOUR FINANCES IN ORDER
Have your mortgage approved in principle so you are ready to act. If you are a cash client make sure your solicitor is engaged.
3. SHOP AROUND
Don’t just approach your own Bank, they can offer advice on their product only and can not give full market access/advice. Speak and make an appointment with an experienced and professional Mortgage
4. APPROVAL IN PRINCIPLE
It is never too early to secure your Approval in Principle – all Banks now offer a fully assessed Approval in Principle decision/letter which allows you to be fully confident in putting your booking deposit down on a property or bid on a property.
This is an important document to have to hand when viewing properties as the selling agent will look for this to allow you to proceed with the purchase.
To secure your Mortgage Approval in Principle you will need to provide all supporting documents that are required for a Mortgage application
5. WHAT DOCUMENTATION DO I NEED?
Banks/Lenders look for information about your income, employment, living costs, savings record and existing loan repayments to help them decide whether you can afford to repay a loan.
If you are a PAYE employee, you will typically need to provide:
A salary certificate, your most recent P60, your last three months’ payslips & the last six months consecutive bank account statements.
If you are self-employed: Your last two years’ certified/audited accounts, your Chapter 4 & Form 11 tax returns for the last 2 years, confirmation that your tax affairs are up to date and the last six months consecutive business bank account statements.
You may also be required to provide identification documents and confirmation of your address. This is usually a current valid passport or driving licence and recent utility bill.
6. HELP TO BUY SCHEME
The Help to Buy (HTB) incentive is a scheme for first-time property buyers. It will help you with the deposit you need to buy or build a new house or apartment. You must buy or build the property to live in as your home.
The amount that you can claim is the lesser of:
- 5% of the purchase price of a new home. For self-builds this is 5% of the completion value of the property
The maximum payment is €20,000 per property. This cap applies regardless of how many people enter into a contract to buy a house. Apply now on www.revenue.ie to find out how much you qualify for.
7. WHAT OTHER COSTS SHOULD I FACTOR IN AND WHAT WILL EACH OF THESE TYPICALLY COST?
Valuation: Before you draw down your mortgage, the property will need to be independently valued by a professional valuer – you should expect to pay a fee of between €150 and €250 plus VAT, but this can vary.
Legal fees: You will need to pay legal fees to your own solicitor. As part of your own arrangement you need to agree with him or her whether this is a flat fee or a percentage of the purchase price.
Stamp Duty: Stamp duty will also apply to the purchase. The current rates are 1 per cent of the purchase price up to €1,000,000 and 2 per cent of any value over that.
Insurance/assurance: You will also need life cover and home (buildings) insurance – the costs of these can vary depending on your requirements and circumstances. Life and buildings cover will need to be in place before you draw down your mortgage.
8. HOW LONG DOES IT TAKE
Timelines vary between the Banks/Lenders – the more information they have up front the quicker and easier it can be to secure mortgage approval.
It is always better to provide all the documentation needed upfront as the Banks will not fully assess your application without this and they will need it to give a full credit decision – your Broker or Mortgage advisor should provide you with a comprehensive listing of the documents required.
It will typically take a few days for you to gather up all the required documents and once they are formally submitted to the Bank a general guideline would be 2 weeks for approval/decision.
Be prepared now and start to download/order bank statements on a monthly basis, make sure last years P60 & up to date payslips are available.
9. HOW MUCH OF A DEPOSIT DO I NEED & HOW MUCH CAN I BORROW?
First time buyers will need to provide a minimum of 10% of the agreed purchase price which can be made up from a combination of a number of different sources such as
- Your own saved funds
- Help to Buy Scheme
- Family Gift
2nd time Buyers will need to provide up to 20% of the agreed purchase price
The amount you can borrow depends on a number of factors such as income and your proven capacity to repay the loan – the maximum allowed as a first time buyer would be 90% of the agreed purchase price & 80% for 2nd time Buyers – all Banks/Lenders have handy online calculators that you can use as a general guideline towards working out your own figures
10. LENDING CRITERIA
Every lender will look at various criteria before deciding whether to approve a mortgage. Some of the main factors that are taken into account are:
- A good credit history
- Being aged 18 or over
- Age not greater than 70 at the end of the mortgage term
- Ability to repay – as a guide, mortgage repayments on all loans including your mortgage should not exceed 35% of your net income
- Secure employment
- Continuous employment for two years
- Good account management