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27 Jun 2017

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EBS have been helping Irish communities find homes since 1935. That’s a whole lotta mortgages! So, it’s not surprising that our EBS Mortgage Masters know mortgages inside out – and back to front.

They come from a long heritage of local advisors, who have passed their mortgage wisdom down over nine decades. These Mortgage Masters have learned a lot about Irish buyers, and they know the local market like the back of their hand (when you focus on one trade for that long, you get pretty good at it, after all).

We chatted to Mortgage Master John Cleary from EBS in Limerick, who has been helping people get into their dream homes for a long time. We’ve shared his sage Mortgage Wisdom and tricks of the trade right here, for Irish buyers who just need some honest advice.

Mortgage Master Commandment 1. Get mortgage ready, before you find the home

“It may be tempting to jump straight in and plan the colour of your dream kitchen before you apply for your mortgage. The first thing to do when you’re thinking of buying a home, is to chat to your mortgage advisor as a first step. They will look at your finances, and give you all the advice you need to find your target house price and to start a savings plan. And it’s all free advice too!

That way, when you do go house hunting, you can be confident of your budget, and you’ll know how far you are willing to go when other buyers start out-bidding.”

Mortgage Master Commandment 2. A mortgage is not just for Christmas

“The best advice I can give customers, is that they shouldn't just take out a mortgage and let it tick over month by month.

Because of the way an annuity mortgage is structured, you pay more interest as a proportion of the mortgage repayment in the early years, and pay back more capital later on. You need to schedule regular reviews of what you're paying.

As your lifestyle changes you may be able to afford to pay more, and maybe reduce your term – so keep this in mind in the early days. Or, you may experience increased costs and find you need to fix the repayment for a while. Buyers should keep in mind that they can always just stay in touch with their mortgage advisor. That means they’ll be better off in the long run. Plus, we like talking to people about mortgages, any time! It’s what we do, after all.”

Mortgage Master Commandment 3. Keep it face to face

“Remember that this is the most important purchase of your life (well, it’s up there, at least!). Having a face-to-face chat with a mortgage expert is the best way to iron out any uncertainties, and to get the best advice on all stages of the buy. Okay, we know it’s the modern age, and maybe the internet is a handy tool for research – but face-to-face contact is still as important today for a big transaction like this.”

Mortgage Master Commandment 4. Know the pros and cons of a fixed rate vs. variable

“With a fixed rate, your repayments will not change for the time that your rate is fixed. This offers you a large degree of security and enables you to manage your finances. If you’re on a variable rate, the rate can rise and fall over time, but you have more flexibility to pay off part of, or all your mortgage (if the chance arises).

Dreaming of being mortgage-free might not be something that you can strive for in the short term, but if you’re flexible and make overpayments, your debt can be paid off more quickly. A mortgage with EBS on a variable rate, allows for increased payments. Flexibility is a great thing to have with your mortgage, it can reduce your loan term and save you money.

It’s a big decision to make when you’re not familiar with financial rates. So, explain your circumstances to your mortgage advisor and ask them to give you advice that’s just right for you.”

Mortgage Master Commandment 5. Don’t get stressed about the stress test

"A stress test is 2% on top of your mortgage repayments, which lenders will use to test your repayment capacity. It’s a safety threshold, which takes into account the possibility of rates rising down the line. Some buyers think that online mortgage calculators will give them a true estimate of their future repayments, but these calculators don’t usually take this 2% test into account.

So the bottom line is, rates can change, and they have an impact on how much you pay, particularly earlier on in your term. It’s one thing paying your mortgage at the level it is at now, but what if the rate changed? When you’re deciding on your budget, make sure to check what the repayments would be if this happened.”

Mortgage Master Commandment 6. Choose your lender carefully

We know rate is important, but it’s not the be all and end all. We’ve heard this one a lot from next time buyers. Some first time buyers will choose their mortgage provider based on rate and current offerings, and may not give much thought to customer service and advice.

But getting a mortgage is a complex transaction and you need to get a trusted partner to help you through that process. Honest advice and support is important throughout the mortgage, and that could be for up to 35 years.

Mortgage Master Commandment 7. Stay in contact

Your lender loves talking about mortgages. So don’t hesitate to book a chat with them at any stage throughout the process. If you’re worried you’re not on track with your deposit or home buying timeline, give your local EBS Mortgage Master a call for a relaxed chat, and some free advice.

Mortgage Master Commandment 8. Cash is not king

Your current account can be used to establish your repayment capacity and it’s good to show proven activity. If you are paying rent or saving each month, do it electronically, so there is an obvious proven trail. Withdrawing cash to pay for large regular payments should be avoided.

Mortgage Master Commandment 9. Thou shalt not miss bills or direct debits

As a rule, how you behave in the management of your day to day finances is a good predictor of how you will behave in the future, and how you will manage your mortgage. Keep an eye on the balances in your accounts, and make sure there are sufficient funds available for any direct debits that are going out.

Mortgage Master Commandment 10. Enjoy the process

Don’t get overwhelmed and try to rush the purchase. This is one of the biggest buys of your life, so you want to make sure you slow down and enjoy. Getting it right is more important than moving in as soon as possible.

Your Mortgage Master can help you through the saving and house hunting stage, and advise on the best price range for your needs. We’ve been through it all before, so use our well of knowledge whenever you need.

Want to chat to your local EBS Mortgage Master?

If you’re thinking of your own home, you can get some free mortgage master wisdom in your local area. Book a mortgage meeting to suit you with one of our mortgage expert, try out our mortgage calculator or get the ball rolling with our First Time Buyer guide.

Don’t forget to visit our Facebook page for the latest home inspiration, news and great competitions.

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EBS d.a.c. is regulated by the Central Bank of Ireland.

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