5 Things To Do Before You Purchase Your Dream Home

Once you have decided to make your dream purchase, try to get ‘approval in principle’ for a mortgage first. At Mortgagesdirect.ie we have 20 years’ experience in the industry so we know how much you can borrow.

Contents:

Contact mortgagesdirect.ie
Documents required to make your application
Best advice when applying
Decision making process
Loan approval

Contacting Mortgagesdirect.ie

You can apply for a mortgage in two ways:

  • Directly to the lender (banks, building societies, certain credit unions and retail credit firms who are not banks or building societies) – in this case you will deal directly with the lender.
  • Through a mortgage intermediary (broker) – in this case, your intermediary will deal directly with the lender on your behalf and will be in a better position to offer best mortgage suitable to you as the broker is appointed by Banks, Building Societies, etc.
  • Therefore you have wider choice of products to choose from through your broker or Mortgagesdirect.ie.

If you want to use a mortgage intermediary (broker), you can get a list from the Central Bank’s registers website – but make sure you know what type of advisor you are using, how many lenders the broker represents and what they will charge you.

Documents required to make your application

  • Proof of your identity: such as a valid passport or driving licence.
  • Proof of your current address: such as a household bill in your name.
  • Proof of your income: your latest P60 and at least 3 recent salary slips.
  • Evidence of how you manage your money: bring current account and loan account statements for the previous 12 months.

Best advice when applying

  • It is of upmost importance we feel that you receive independent advice when applying. Don’t panic and take the first mortgage you are offered. At mortgagesdirect.ie we can apply to a number of lenders and if you are offered more than one mortgage, compare the rates carefully. Keep your eyes open for better offers from other lenders.
  • Don’t be seduced by ‘freebies’, like free legal expenses or discounted insurance without looking at the mortgage as a whole. Introductory and first-time buyer packages can save you money in the short term but remember to consider the long-term costs when the ‘introductory rate’ runs out.

Decision making process

When you apply for a mortgage, a lender will look at:

  • Your income – lenders will look at your annual income and some may take bonuses or overtime into account. Some lenders may factor in rental income if you plan to rent out spare rooms.
  • Your age and number of years to retirement.
  • Outstanding loans – if you have other loans, this may reduce the amount of money you can borrow or you may find it difficult to get a mortgage.
  • Outgoings – in addition to any loan repayments, other financial commitments you have.
  • Savings – this shows you have an ability to save and have built up enough money to pay for your deposit and other expenses.
  • Credit record  – this shows the repayments you have made on any loans you have. If you have missed repayments in the past, it may make it more difficult for you to get a mortgage.
  • The value of your house – this is the market value, or purchase price of your house.
  • The amount you need to borrow – this is the difference between the amount you have saved to put towards the house (your deposit), and the purchase price of the house.
  • Whether you are borrowing on your own or with someone else.

Loan approval

  • Many lenders give ‘approval in principle’. This means that your lender approves you for a mortgage of a set amount, based on the details you provided in your application.
  • Your mortgage loan approval will remain valid for a short period of time, usually 3 – 6 months. Your mortgage offer will have an expiry date – and you must draw down your mortgage before this date. Once a loan offer expires, you will need to apply again and if your circumstances have changed or your lender’s criteria has changed, you may not get approval again.
  • The interest rate shown on your mortgage loan approval is not necessarily the rate you will pay. Usually, the interest rate for your mortgage will be set only on the day that the money is actually lent to you.
  • Keep a copy of all correspondence and documentation from your lender in a safe place.
  • At mortgagesdirect.ie we provide a wide range of  mortgage protection and home insurance products.  When your mortgage is approved, your lender will ask you to fill in a direct debit form so your repayments can be collected from your bank account.