Here are Marks Top 5 key principles that provide a comprehensive overview of the factors considered in mortgage approval, ensuring a thorough assessment of an individual’s financial situation. Let’s break down the points:
- Maximum Mortgage Limit:
- The maximum mortgage limit is set by central bank rules at 4 times your normal gross income.
- Exemptions above this limit are challenging to secure but may be available in limited circumstances.
- Deposit Requirements:
- First-time buyers typically need a 10% deposit, with the possibility of the Help to Buy scheme covering 5% for qualifying applicants.
- Second-time buyers generally require a 20% deposit, although exemptions may be considered based on individual merits.
- Lenders prefer a steady savings pattern for at least 5% of the purchase price, but some tolerance for larger gifts may be allowed with a long rental history.
- Affordability is crucial, and the focus should be on your comfort level with proposed repayments.
- Advisers must demonstrate that you can afford mortgage payments, even with a 2% increase in rates.
- A minimum of six months and preferably longer of demonstrating the ability to repay is recommended.
- Income Security:
- Secure employment is essential, with permanent contracts preferred by most lenders.
- Some lenders may consider contractors with evidence of three years of continuous contractual work and strong prospects for future continuous contract work.
- Prudent lending practices require employees to be employed for at least twelve months and to have completed a probationary period.
- The long-term prospects of both the sector and the organization are taken into account.
- Financial Management:
- Demonstrating good financial management includes maintaining a regular savings record and having minimal personal debt.
- Prudent spending habits, no missed payments on previous loans, and avoiding online gambling are factors considered.
- Simplifying finances, such as having a manageable number of bank accounts, is recommended.
Overall, these principles provide a comprehensive guide for potential mortgage applicants to assess their eligibility and readiness for homeownership. The focus on financial stability, affordability, and responsible financial management is key to a successful mortgage application.
Mark advises to
“Consult with a Mortgage Professional: Speak with a mortgage broker to get personalized advice based on your financial situation. We can help you understand your options, identify potential challenges, and guide you through the mortgage application process. Talk to us, we can go through the principles with you in person and look at all options available to you”.
Call Mark for a confidential, no obligation chat about mortgages for first time buyers. those who wish to remortgage, or if you wish to update your mortgage protection, 096 60044
Mark Winters & Henry Bourke TA Allied Financial are Regulated by the Central Bank of Ireland.