In the current environment mortgages are very hard to attain and the expert advice of a mortgage broker may be required to assist you in attaining the mortgage. Additional income is not really taken into account anymore and mortgages are now given on the basis of basic income and any other car loans or repayments will be taken into account when attaining your maximum mortgage that you can attain.
The maximum loan that you will now achieve is 80% of the purchase price of the house and you have an option of variable or fixed rates and these will be set at the time of your purchase. Hence you will be required to have your own savings for the balance readily available.
You should apply early for your mortgage application to allow the lender advise you of any additional requirements but usually you should allow 3 to 4 weeks from your initial application and an offer in principle which will be subject to various conditions. Mortgage life cover is one of the insurance covers that you will require and for this you should also apply early and there could be insurance medicals to be done especially if one of the buyers may have some current illness or is taking some medication at the present. We would be pleased to recommend various mortgage brokers to you who can provide you with assistance with the mortgage application as well as arranging all the insurance cover required for the mortgage to be completed and this will include the house insurance.
At Des Lalor Auctioneers we cannot stress the importance of proper advice and assistance in the mortgage sector that is provided by the Mortgage Brokers that we currently deal with. Please contact us and we can provide their details on request.
Below are frequently asked questions in relation to finance.
How much can I borrow?
As a rule, lenders will not allow your borrowings to exceed 35%-40% of your net income. This will vary from lender to lender and when assessing your income they look at:
Basic income, Overtime i.e. is it regular? Bonus i.e. is it based on performance or is it guaranteed? Commission i.e. how does this year compare to last year? Other borrowings you may have i.e. car loan
What percentage loan can I borrow?
Most of the banks will lend up to 92% of the value or purchase price of the property. Some go as far as 95%.
How long does a mortgage take to process?
This will vary from case to case, however, once all the documents are submitted to the lender it should take no more than 4-5 working days for an approval in principle to issue. It could take longer depending on the complexities of the case.
Once a valuation has been arranged and examined by the bank, their loan offer will issue to you and your solicitor. After this it is just a matter of complying with the loan conditions and the solicitor requesting the loan cheque.
A new house may take longer as no monies will be issued until the property is completed.
Fixed or variable rate - which should I opt for?
This is one of the most important questions you have to ask when taking out Mortgage. When deciding you need to look at:
- Are rates on the increase? - Will I want to clear or change the mortgage during the fixed period? - Do I anticipate any changes in my job or family circumstances in the near future? - What type of rate will I be put on when the fixed rate period ends? - Will my lender allow me to split between a fixed and variable rate?
Both fixed and variable rates have their advantages and disadvantages. Current economic trends and your own circumstances will determine which way you should go.
Will my car loan effect how much I can borrow?
Yes, it will. When the bank is deciding on how much they will offer you, they will take into consideration all your outgoings. They will calculate what you can borrow based on your income and reduce this amount proportionally in relation to the car loan payments.
Should I have a structural survey done on my house?
Yes, we recommend that a structural survey be considered when purchasing a second hand property. The valuation carried out by the banks valuer only determines the current market value of the property. Whereas, a full structural survey examines the property in much greater detail and the report should show up any defects to the property.
Can I part redeem my mortgage at any time?
As a general rule, part redemption is normally allowed. However, restrictions may apply depending on the type of mortgage you take out. It is best to check with the lender at an early stage.