Will I Qualify for a Mortgage?
At MDL Financial Consultants we will guide you from start to finish and ensure you get the best value mortgage.
The key principles of mortgage approval are as follows:
- Your income should be secure and sufficient to sustain a mortgage (Minimum income for a single applicant mortgage is typically €35,000 and €60,000 for joint application).
- You can provide evidence from recent rent and savings patterns that you can afford repayments even if rates rise by 2%.
- You have an adequate cash deposit
- You have a good credit history, well managed finances and typically no loans or credit card debt.
- What is the maximum mortgage limit?
- Central Bank rules place a limit of 3.5 times your normal gross income as your maximum mortgage.
- Exemptions are available so that in some instances you can borrow more than 3.5 times salary and having access to a wide range of lenders means that your chances of getting an exemption are improved by dealing through us. However in many instances a multiple of 3.5 times gross income is a fair multiplier when it comes to affordability.
- How much of a deposit do you need?
- First time buyers 10% ( Help to buy scheme available to qualifying applicants to fund 5% for new house or apartment purchases or self builds)
- Second time buyers 20% of the purchase price
- Some lenders are comfortable to have the deposit requirement provided by way of a gift, but as a general rule lenders preference is to see a steady savings pattern contributing to a reasonable share of the deposit.
- Can you afford the repayments?
- The most important matter to consider is your comfort level with the proposed repayments. Rates will change during the mortgage term. The price you want to pay for a house should be driven by your feeling for affordability.
- As your advisers we need to clearly demonstrate in our lender recommendations that you can afford your mortgage payments even if rates increase by 2%
- The longer the period over which you can demonstrate ability to repay – the better, but it should be minimum six months and preferably longer.
- Is your income secure?
- You need to be in secure employment. Being on a permanent contract is a requirement with most lenders but we are pleased to advise that some lenders will consider contractors where their is evidence of contractual work for over one year on a continuous basis and prospects for further continuous contract work into the future are strong.
- Lenders take a prudent approach. Employees should be employed for at least twelve months and have completed your probationary period.
- The sector in which you work should have long term prospects as should the organisation for which you work.
- The more skills and qualifications that are relevant in today’s world – the better.
- Can you demonstrate good financial management?
- Good regular savings record
- Minimum of personal debt and credit cards cleared monthly
- Prudent spending habits
- If you have taken out loans in the past – there should be no missed payments
- No online gambling
- Try and keep it simple- not too many bank accounts – savings simple to follow.