05 Jul 2019
Posted in: Mortgage Master
Buying a home is the biggest purchase any of us are likely to make – so it’s completely natural to have doubts when it comes to applying for your mortgage. In this digital age, we go online to check out any big purchase – be it a new fridge or a new computer. But a lot of people don’t know too much about mortgages, so mortgage myths tend to spread.
However, lots of these fears are unfounded! Our Mortgage Masters have been in the mortgage business since 1935, so we’ve heard it all. Even if you’re not quite ready for a mortgage early on, we’ll work with you to get you there.
Here are five of the most common fears we’ve encountered with Irish buyers and our advice for overcoming them.
Like most fears, this one is based on a small amount of reality. It’s true that if you go through the process of fully applying for a mortgage and then you get rejected, it will show up on your credit report. But our mortgage advisors are there to help you long before you get to that stage.
Our Mortgage Masters will give you all the advice you need to make a successful application, no matter what shape that takes. Whether it’s telling you that you’d be better off saving for six months and then coming back or telling you that you need a bigger deposit, we’ll guide you along the way.
Don’t worry, folks. This is a fear every buyer has at the very start. But you just need a good saving plan and patience.
The rules set down by the Central Bank say that a first time buyer must have a deposit of 10 percent of the value of a property. The average property price in Dublin means you’d be looking at a deposit north of €30,000.
Some people are turning to their parents or other family members for help and that’s great if you have that option. But otherwise, the advice is to really cut your costs as much as is possible and start saving. Once you commit to saving you’ll be surprised by how quickly it can happen for you.
Negative equity is one of the phrases that everyone in Ireland became familiar with after the crash of the Celtic Tiger.
Basically, it meant that someone was left paying a mortgage for a property that was in excess of the value of the house.
So let’s say that they paid €250,000 for the house with a mortgage of €220,000. But after the crash, the property was only worth €150,000. Then they are in negative equity of €100,000.
Now, this is a potential issue for anyone buying a property. Negative equity matters if you plan on selling the property as there may be specific requirements so it’s a good idea to speak to your mortgage lender. Among other scenarios, it also comes into play if you plan on re-mortgaging.
While the market in Ireland has recovered in recent years, there is a huge issue when it comes to housing supply. There simply aren’t enough houses being built for the demand which means that if you are buying (or building) a well-designed home in a good area, demand is likely to be strong in the medium-term at the very least.
Well this one is a really easy fix. Your credit history can be checked on the Central Credit Register where a borrower can request their credit report free of charge. The Irish Credit Bureau’s website also offer a service for only €6. Enter your details, make the payment, and the ICB will post you a comprehensive rundown of your credit history.
According to ICB, “You are likely to have a positive credit rating if you have a good history of repayment on previous loans. Your credit rating may be poor if you missed repayments on a regular basis or failed to pay off a loan in the past.”
Once you get the report you will know one way or the other. If it’s good, you’re grand! And if it’s not, you can look at ways to improve it. If you’re applying for a joint mortgage with a partner, it’s always a good idea to get both your ratings checked out too.
This one is a big fear for buyers in the capital in the current climate. The reality is that Dublin is more expensive to buy in than much of Ireland. But that’s the same in London, Paris or most capital cities in Europe.
There are lots of up-and-coming areas in Dublin 7 and out in the suburbs in Dublin 24, where inflation hasn’t spiralled quite so badly. Fixer-uppers are an option too: buyers just need to look beyond a shabby exterior to see the future potential.
Dublin’s commuter belt is widening, too, and commuter towns will soon be overtaken by the city limits in coming years.
Places like Dundalk, Meath and Wicklow, which were once seen as country towns, are now booming commuter spots, with rising property values and commuter routes to take workers in and out of the city in an hour or so.
It’s true that you can get a lot more bang for your buck outside the capital – but whether you fancy a life of commuting or not is something you’ll have to decide on your own. Whatever you decide, we’re here to help you in any way we can.
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