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05 Apr 2019

Posted in:  First Time Buyer and Self Builder

The mortgage timeline: The steps to buying a house in Ireland

If you meet one of our Mortgage Masters at a party (and you might) the most common question they get asked is, “how long does it take to get a mortgage?”

Here’s the truth: every buyer is different, and it takes a different amount of time for each person or couple.

First Time Buyers who’ve got everything covered and walk in our door with over 10 percent of the value of your house saved (20 percent if you’re a mover or 2nd time buyer), enough to cover the extras (like the solicitor, surveyor and all those hidden costs) and can prove your repayment capacity (i.e. you can comfortably afford repayments on the mortgage) then the whole process could be completed in a matter of weeks. For others, it could take months.

Another truth is that most people don’t walk in the door with absolutely every box ticked. We know that you’re probably not focused on getting a mortgage all day every day. Life comes at you in different ways, and we know that people are at different stages in their mortgage journeys.

You may fall into one of three different camps too; the Financial Whiz Kid, the Regular Joe (or Josephine) or the Complete Beginner. Below, we’ll run through the stages for each of these buyers. But no matter which category you fit into, you can rest assured that our Mortgage Masters will be there for you every step of the way.

The Financial Whiz Kid

Financial profile: You’re someone who dots every ‘i’ and crosses every ‘t’ when it comes to your cash. We bet you’ve been squirreling money away since your First Communion and know almost as much about mortgages as we do.

Knowledge level: You don’t need much in the way of advice, but you can still pick up some nuggets of wisdom from our Mortgage Masters who have been helping Irish families into their homes for over 80 years.
Often, you’ll be coming to us to get your ‘approval in principle’ which is where you’ll get a preliminary offer of a mortgage based on your finances at the time. This approval can last up to 12 months. It allows you to start bidding on properties because you’ll now have a set budget in mind.

You’ll need: Whiz Kids know to bring in the documents we need. These include payslips for the last six months, a salary cert (or tax certificates in the case of self-employed people), bank statements for the last six months and proof of your 10 percent deposit for first time buyers or 20 percent for next time buyers. This ensures the process can really fly by.

The regular Joe or Josephine

Financial profile: You’re the most usual mortgage applicant our Mortgage Masters encounter. You’ll pop in to have a chat and ask a few questions and find out the lay of the land. We’ll expect that you might be a few months off actually applying for a mortgage but that you want to get all your ducks in a row.

Knowledge level: We’re happy to provide information on what you need to do next. The Central Bank states that first time buyers must have at least 10 percent of the purchase price as their deposit. We can provide information on how to save that amount over time.

You’ll need: Ideally, we like to see six months of regular savings to prove that you can repay the monthly repayments. So, let’s say that repayments on the mortgage you’re aiming for will be €1,400 per month. To be able to comfortably afford that, we’ll need to see a total repayment capacity of around €1,750 per month to consider the fact that mortgage interest rates may rise.

Here’s how to check your repayment capacity: If you’re currently renting an apartment for €1,100 per month we’ll need to see that sum paid by direct debit from your bank account. We’ll also need to see savings of €650 per month for six months. Once you’ve done this, you’re transformed from the average Jo(sephine) into a Financial Whiz Kid, so the process should zip along.

The complete beginner

Financial profile: You may have been travelling the world for the last few years or you’ve been in college and you’ve just got your first decent job.

Knowledge level: You don’t have much in the way of savings but you’re planning ahead. You may think a mortgage is lightyears away but we’ve been in this game for over 80 years, so if it takes you a couple of years to get to the right place, then that’s fine with us.

You’ll need: The first thing we recommend is to get saving regularly. There is no shortcut here. Even if you get a parental gift to cover the entirety of the deposit, you’ll still need to prove that you can afford the repayments, so saving and having good financial habits are the only way to do that.

It’s about discipline, but it’s also the best way of boosting your financial health. EBS has a range of savings options available to help you get the most out of your savings. After a couple of years, the aim is you’ll hopefully have enough to afford a deposit (especially if you’re applying as a couple). Once you are at that stage, you’re no longer a complete beginner: you’re an Average Joe (or Josephine!) so you’re only a couple of months away from mortgage approval.

Now, the next steps

Okay, that’s the mortgage bit covered. So, what are the other stages? You need to find a house or apartment that you love. Next, you make an offer which is accepted, and then you go to a stage called ‘sale agreed’. Don’t forget to budget for other costs like valuation fees and surveyor fees.

After this, the estate agent gives all the relevant details to your solicitor. Your solicitor may cost around €2,000-€3,500 depending on the part of the country you are in. Your solicitor will also calculate how much stamp duty is due and this will need to be paid to Revenue before the closing of the sale

While you wait for your formal Letter of Offer from the mortgage provider, you’ll need to start thinking about life assurance and home insurance which our team can help you out with.

Once you receive the letter of offer, your solicitor will sit down with you and go through it in detail to make sure you are comfortable with everything in the contract. Once signed, you’ll then physically hand over your deposit. Your solicitor then sends off the necessary paperwork in a process known as the ‘Exchange of Contracts’ and everything becomes official. Once your solicitor has completed all the necessary legal steps, they will get in touch with your Mortgage Master to arrange the payment of the remaining balance and to close the sale. Once that’s all completed, you’ll get the keys to your new place! At last!

Are you thinking of buying your own home?

Does the thought of picking up the keys to your own place appeal to you? It couldn’t be easier to find out if you’re eligible for a mortgage. Simply call into your local EBS office for a chat with one of our friendly Mortgage Masters.

Get the ball rolling with our First Time Buyer guide.

Find out how much you can afford to borrow with our mortgage calculator or book a mortgage meeting to suit you with one of our mortgage experts.

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.

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