07 Mar 2017
The idea of a mortgage is a relatively simple concept. You ask a lending institute for a home loan, they see if you can afford it, and then lend you the money if you can.
That all sounds pretty straightforward. So why are there so many mortgage-related myths and conspiracy theories? Some of these stories have been repeated for so long that they’ve now become the accepted wisdom, which just makes things even more confusing.
Like Fox and Mulder in The X-Files, we’re here to shine a light on the shadowy half-truths and seek out the truth behind some of the most famous mortgage myths.
Only existing customers can get a mortgage
You don’t need to be an existing customer to get a mortgage from a bank. A potential lender is as happy to welcome you apply for a mortgage as they would be for an existing customer. Banks will simply judge you on your individual merits and your ability to repay the loan. You can walk in off the street or arrange a meeting with EBS at any time to find out if you are eligible for a mortgage.
If you gamble online, your application is refused
Another myth is that you’ll never get a mortgage if there’s evidence of gambling on your bank account. If you lose hundreds of Euros a month on lame horses or make huge bets every couple of weeks, it’ll certainly set off alarm bells for potential lenders.
Realistically, having a harmless flutter on the Grand National will not see you blacklisted for life.
Banks aren’t lending
You probably know someone who’ll swear blind that the “banks aren’t lending.” It’s a common theory but it doesn’t exactly stand up to scrutiny.
The latest Banking & Payments Federation Ireland figures show that an average of 2,133 mortgages were approved per month between June and August of 2015. If the banks aren’t lending, that’s a lot of mortgages that were presumably funded by witches, gingerbread men or charming princes.
You’re too young to get a mortgage
Another misconception is that lending institutions won’t look at you unless you have three grandchildren and 20 years in the workforce. The reality is that you won’t be judged solely on your age or your marital status.
A mortgage lender will judge your application on your loan record and your ability to make repayments. Your application will be based on your income, savings record, rent payments and stress testing. Not whether you can grow a full beard or remember when Johnny Logan won his first Eurovision.
You need an impossibly large deposit
While it would be nice to have a large nest egg to get you started, you don’t need to have an absolute fortune.
A mortgage deposit of between 10% and 20% of the value of the property will be required for most applicants. You can chat to an EBS mortgage advisor at any time to see what your actual deposit would be.
Self-employed people can’t get mortgages
Being self-employed doesn’t mean that you can’t own your own home. Your application will still be judged on its own merits.
With EBS, applicants who are self-employed simply need to provide three years of audited/trading accounts, confirmation of your tax position, six months of bank statements and three years of Revenue Notice of Assessment.
You can’t get a mortgage if you’re in negative equity
You can sometimes feel a bit trapped if your property is in negative equity. Those two dreaded words conjure up all sorts of negative connotations.
However, EBS’s Negative Equity Home Movers Mortgage means that you can sell your current home and transfer any outstanding debt onto the mortgage of your new home. So there are always options with EBS. As always this is subject to Bank’s Terms & Conditions
Thinking of applying for a mortgage?
Now that you know the truth about mortgages, why not find out more? Whether you’re a first time or next time buyer, EBS has options to suit you. If you are thinking about buying a house, try our mortgage calculators or book a 30 minute mortgage meeting at any time to chat about your options.
EBS d.a.c. is regulated by the Central Bank of Ireland.
The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.
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