Welcome to the Financial Column on Boyletoday.com in association with Money Plus, the award winning Financial Services company on Bridge Street in Boyle.
Q. I have received many queries in the last few weeks regarding the criteria for a mortgage application, and the various things which will preclude you from being successful in securing a mortgage, ie lack of regular savings, rent not being paid through a Bank account, poor credit history.
A. The first thing you must remember is that there are two main rules governing institutions when they consider a mortgage application. These are laid down by the Central Bank;
a) Minimum deposit; 10% up to 220k & 20% on amounts over that for First Time Buyers, & 20% for all Non first time buyers.
b) There is a cap imposed on all mortgage borrowers of 3.5 times sole or joint salaries.
( Each lender is allowed some exceptions but this is capped at 15% of all of their mortgage lending in one year.)
In addition each lender have their own set of criteria, and while they are all quite similar there are some lenders who will suit a particular borrower better as they would have more lenient criteria as regards length of time employed, minimum salary etc.
What makes your application more successful is;
Build up of regular savings over a period of at least 6 months. This indicates to a lender that you are capable of repaying a mortgage at a particular level.
Secure employment for a period of 12 months (some lenders will accept 6 months).
Contract employment may acceptable if you have completed 12 months . Certain conditions apply.
Satisfactory Credit History. This can be checked out in advance. Pepper Homeloans , a newcomer to the market are more lenient with regard to Credit History but they will only consider mortgages in the cities and large urban areas.
Evidence of rent paid through a Bank account. While this is generally necessary,it may not be required in cases where there are sufficient regular savings or discontinuation of a loan or existing mortgage to prove repayment capacity.
The important message is that each case is different, and a meeting with your financial adviser will put you straight as to whether you are mortgage ready or whether you need to put some actions in place in order to be in a position to submit an application in the future.
Of course if you meet all the criteria, you are then in a position to shop around for the best product on offer.This is a long term commitment and there are many products in the market place from fixed to variable, and rates vary considerably depending on the loan to value.
A visit to an independent financial adviser could save you time and money and it will simplify the process.
There is no fee for an initial exploratory consultation.
For advice on any issue raised in this or previous columns please consult Belinda McCauley at Money Plus, your local independent financial broker. Belinda and her colleagues at Money Plus, Bridge St, Boyle would be delighted to help you. Belinda can be contacted at 071-9194000/086-7847827 or by email: [email protected].