The Mortgage Market

November 7, 2018
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Starting the process of a mortgage application can seem a little daunting but once you know the basics it’s really not that onerous. Here are a few tips to help you along the way:

Step One: Establish How Much You Can Borrow.

Under Central Bank rules, you can borrow up to 3.5 times your combined annual household income, and many lenders will allow you to borrow up to 90% of the purchase price of your new home. However, be aware that are significant differences in the amounts you can borrow as every lender has different ways of calculating your suitability.

Step Two: Choose a Lender

When looking for a mortgage, it’s worth investigating different lenders other than the bank you’re already with. You do not have to have a bank account or be a regular customer of any bank to apply for a mortgage as it is viewed as a separate financial product. Typically, lenders will consider the following:

Your guaranteed and variable income
Your age, and the maximum term of a mortgage available to you
Your outgoings, including other loans and financial commitments
Your other living expenses

Step Three: Put Together a Deposit

To buy your new home, you need to have at least 10% of the purchase price in the form of a deposit. You can raise the finance through whatever means are available to you, usually saving over time. Saving also helps demonstrate your solid financial history to any potential lenders.

If you are a first-time buyer, there is a Help-to-Buy scheme to help you raise your deposit and you can check out our guide to the scheme here.

Step Four: Understand ALL the Costs of a New Home

Remember, there are many free and independent brokers out there who can do the shopping around for you and save you a lot of time and hassle. If you would like a recommendation, just call us on 0404 66466!