Beginning the process of applying for a mortgage can be daunting especially when the different lending institutions offer varying terms and incentives. It can be difficult to know where to start.
There is a misconception that you must have a property chosen before you start applying for a mortgage. However, you should, in fact, start your journey to mortgage approval first as it can be a lengthy process. This will also give you the opportunity to review the interest rates of the various lending institutions to ensure you get the best loan offer without stretching you financially.
Under Central Bank Regulations, first-time buyers can borrow three and half times their salary for primary dwelling homes with a 90% loan to value limit meaning first-time buyers require 10% deposit. However, as you will see when you meet the various banks, repayment abilities and savings will be taken into consideration.
STEP 1: Gather the Documentation
Each lending institution will request the same documents and information as follows:
- Photo ID and proof of address for each applicant.
- Payslips for the previous three months.
- Six months bank/credit union statements for all accounts held by each applicant.
- Details of monthly payments/loans which will continue when you draw down the loan.
- Salary Certificate signed by your employer.
- Approximate purchase price.
When you submit documents to one lending institution, ensure you keep copies of everything as you will need them for each application.
STEP 2: Make the appointment
It is important to schedule appointments with a mortgage adviser in various lending institutions. It is advisable to first meet with the bank where you have your bank accounts. As this bank will have direct access to your bank accounts, they can see your monthly savings for the required six months and previous to that.
Each bank has mortgage application forms to be completed and you should ensure you use your appointment to review the application and ask all and any questions. Incomplete forms will be returned to you and cause a delay in your application which could lead to you losing the house of your dreams. You can submit a Mortgage Application for all the lending institutions and be approved in principle and choose at a later stage. Loan approval is valid for six months.
Different banks have, of course, different interest rates. You should ask for specific details on monthly mortgage payments to include what an increase in interest rates will cost. Some banks are offering incentives such as cash back, payment of legal fees, stamp duty etc, therefore you should consider the benefit of these immediate returns against long-term repayments.
STEP 3: Choose your loan provider
If you have found a property, you should then give the details and exact purchase price to the banks where you have submitted a mortgage application. You should then proceed by choosing the lending institution which offers you the most competitive mortgage and repayments which suit your financial circumstances.
It is important to keep in mind that certain terms of the mortgage can be changed such as the term of the mortgage. When you drawdown your loan, you should keep in contact with your mortgage adviser to ensure your mortgage continues to be competitive.
Gillian Butler is a conveyancing solicitor at Keating Connolly Sellors and has several years’ in-depth experience in dealing with residential property transactions. If you are or thinking about purchasing property contact Gillian at email@example.com or call +353 (0)61 414 355 or +353 (0)61 432 316.
The material contained in this article is for general information purposes only and does not constitute legal or other professional advice. We advise people to always seek specific expert advice for their individual circumstances.