22 Sep 2017
Posted in: First Time Buyer
No matter how old you are, the phrase ‘mortgage application’ can be a bit scary. And sure, the mortgage application process involves saving, watching the pennies, and filling in paperwork, but it doesn’t need to be a super stressful experience – especially if you keep on top of things.
In fact, there are ways and means to speed up the mortgage application, so today we’re sharing our insider tips with you via Matthew Kennelly, our office advisor in Portlaoise.
One of the big misconceptions Irish people have around applying for a mortgage is that their savings need to be in absolute tip-top shape. They think that if they’ve had the odd flutter at the Grand
National or gone for drinks at the weekend, their application will fail.
But that’s not the case at all, as the mortgage lender looks at your savings to see if you can afford your repayments.
“You need to show that you can afford your mortgage repayments,” confirms Matthew. “Let’s say you’ve used a mortgage calculator to show your repayments will be €900 per month. You need to actually prove that you can repay €1,100 – just in case interest rates go up.
So, you need to show savings or a combination of rent and savings for that bigger amount to prove your repayment capacity.”
Your best bet is to keep a paper trail tracking everything. Get a big folder or ring binder and track your spending and your savings and keep a hold of all relevant receipts. You might end overprepared – but that certainly can’t hurt!
Saving for your mortgage should be the focus of your saving, so don’t decide you also want to save for your wedding or a new car in tandem.
“If you want a new car, wait until after you get the mortgage,” stresses Matthew. “If you have just taken out a car loan that you’re going to be paying off for the next five years, then that’s really going to impact the decision on your mortgage.”
Likewise, if you have any residual debts like a student loan or a credit card that needs clearing, focus on paying those off before you apply. Most lenders will see it as a positive if you can clear your debt, as it proves you are reliable – which is exactly what your mortgage advisor wants to see.
Matthew has a word of warning for those who owe money on loans or credit cards.
“You should really try to avoid any missed payments or direct debits,” he stresses. “I see loads of people who are doing great with their savings – maybe €1,000 per month or more. But they are missing the minimum payments on their credit cards and that undoes all the good of saving.”
Your credit rating is one of the things your advisor takes into consideration while processing your application, so be sure to make your minimum repayments, or it will be a mark against you.
Did you know that dropping your application directly into the letterbox of your local office means it will make it to your advisor that little bit faster?
Applications posted via this mailbox are considered ‘internal mail’ so they find their way onto the right desk with more speed than an application that’s sent in the post. The more you know, eh?
Sometimes it’s the little things that help!
Don’t forget to visit our Facebook page for the latest home inspiration, news and great competitions.
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.
EBS d.a.c. neither accepts nor assumes any responsibility in relation to the contents of this blog and excludes all warranties, undertakings and representations (either express or implied) to the fullest extent permitted under applicable law.
EBS d.a.c. is regulated by the Central Bank of Ireland.