mortgage noob

Captain Slow IRL

Hi all,
What would be needed if myself and my partner wanted to apply for a mortgage tomorrow? We are both first time buyers and we don't want to go for the 100% mortgage.
Thanks

seamus

Easiest thing is to go to a mortgage broker. They will take one set of documentation from you and make applications to a number of institutions.

Banks are generally only concerned with your ability to pay the mortgage and your ability to continue paying it in the future.

Assuming that both of you are in stable employment, most banks will look for:

Salary Cert from your employer (details salary & bonuses as well as a declaration that you're not on probation)
Your last three payslips
Your last six months bank statements
Statements of any savings or loans. Savings will + your application, loans will - it.

If you need a guarantor, you'll need similar information from them.

Brokers and banks will usually give you a fairly lengthy form to fill out in regards to how much you're looking for, what type of house you're buying, etc etc. These can be very long and ask questions that you don't have/don't know the answers to. You just fill out as much info as you can.

Captain Slow IRL

thanks, that was quick!

what's the story if we wanted to build a house? would we still get a mortgage to build or are we restricted to buying something already standing?

seamus

land9 wrote: »

thanks, that was quick!

what's the story if we wanted to build a house? would we still get a mortgage to build or are we restricted to buying something already standing?

You can definitely get a mortgage to build, but there would obviously be more hoops to jump through. When you go to apply for the mortgage in full, you will probably have to show approved planning applications and builder's quote(s).

Captain Slow IRL

thanks, you've been very helpful:)

threebeards

seamus wrote: »

You can definitely get a mortgage to build, but there would obviously be more hoops to jump through. When you go to apply for the mortgage in full, you will probably have to show approved planning applications and builder's quote(s).

Yeah, more or less what Seamus said. You can get approval in principle prior to planning being approved but in order to formalise your approval and have a letter offer issued, you'll need to submit a copy of the grant of planning permission, a copy of the breakdown of costs from your engineer or architect and a copy of the house plans.

The income documentation is pretty much standard and is as Seamus mentioned above. If you want any specific info feel free to pm me.

Captain Slow IRL

thanks, you'll probably be hearing from me in the future!
also, what kind of deposit will we need - is it 10% of what we need to borrow?

seamus

land9 wrote: »

thanks, you'll probably be hearing from me in the future!
also, what kind of deposit will we need - is it 10% of what we need to borrow?

That all really depends on what you're borrowing.

If you're borrowing 92%, for example, then theoretically you must make up the final 8% out of your own cash, i.e. it shouldn't be a loan from another bank.

The bank don't require any kind of deposit on a property. You're probably thinking of when you're buying a property from someone else. Often the deposit paid to secure the home is around 10% of the cost price, but the bank don't require you to pay any particular deposit - just to cover the bit that they're not giving you.

threebeards

Most banks will give 92% mortgages and some will give a little more in certain circumstances. You said in your first post that you don't want to get into a 100% mortgage situation. That's probably wise in the current environment and in any case it's getting more and more difficult to secure a 100% mortgage.

The exception to that rule is if you're building. You could borrow 100% of the construction costs but still end up with a 60% to 80% loan to value mortgage i.e. if you already own a site and it cost €200k to build, the market value on completion could potentially be €250k - €300k depending on whether you hire a contractor or go the direct labour route. Do you own a site or would you need to buy?

Captain Slow IRL

I'm trying to buy off a neighbour of the gf's. She was speaking to a few work-mates who were in a similiar situation to us (except they had land to start off with) and they built a house for under 100k. We're not looking to build a mansion, just a single story and hopefully the total cost will not exceed 180k.

Would a mortgage cover the site as well, or would we have to have that first?

threebeards

land9 wrote: »

Would a mortgage cover the site as well, or would we have to have that first?

You can borrow up to 90% of the site cost and then 100% of the construction costs assuming a total loan to value on completion of less than 92%, so, for example:

Site cost = €80k: Mortgage of 90% = €72k
Build cost = €140k Mortgage of 100% = €140k
Value on completion say €250k
€212k/€250k = Loan to value of 85%

That's just an example. I came across a decent site called http://www.irish-house-plans.com which gives a good idea of price per sq ft to build and some ideas in relation to house types.