First time mortgage ?

chessguy

Hi folks , this is my first post I searched older posts but could not find a solution to this , I
have a few questions, I am not applying for a mortgage just yet till I have done my homework, as I understand 1 refusal can cause "issues"

At the age of 47 what is the longest mortgage I can get, alone.(years)

Can I be refused a mortgage on health grounds I work full time ,I always have done.

Does the mortgage period extend if my wife signs up too (her age is 41)she works part time
about 12 hours a week.I work full time,

I am expecting to buy in the next 12 months when the house prices have really crashed ,) I expect them to fall drastically yet,so the average house price falls to circa 3 times the average wage and probably less.(thats just my opinion).

I would be looking to get the max mortgage amount of 100.000

Should I get this from a bank ?
or from credit union ?
any idea how much the credit loan out max ,
I save about 500. a month with the local Credit union
I mean do they do mortgages or are they too expensive,

I understand with a mortgage insurance is required , unfortunately that may be an issue to get insured now,but I am already insured for life and that amount would cover a mortgage , so would I still need to take out separate cover with my mortgage?

When applying for a mortgage to get the best interest rates what percentage of the total price should be paid as a deposit,?


thanks for taking the time to reply ,:)

delllat

i would buy as much of the property as possible with cash ..and borrow the smallest amount possible

that should increase your chances of getting the mortgage anyway and give you the better rates because of the larger deposit (less risk for the lender on a smalller amount )

The_Conductor

chessguy wrote: »

Hi folks , this is my first post I searched older posts but could not find a solution to this , I
have a few questions, I am not applying for a mortgage just yet till I have done my homework, as I understand 1 refusal can cause "issues"

At the age of 47 what is the longest mortgage I can get, alone.(years)

18 years bringing you up to age 65. There are rules governing allowing mortgages run over the normal age of retirement. In 2-3 years time when the age of retirement has risen, your mortgage will do likewise.

chessguy wrote: »

Can I be refused a mortgage on health grounds I work full time ,I always have done.

Yes, you could be refused a mortgage on health grounds- or more likely refused life assurance- or offered life assurance with caveats at such a level as to make it impossible to get a mortgage. You are required to take out a life assurance policy when you take out a mortgage, and any health issues, will be taken into account on this. For example- my own life assurance is weighted because of Crohn's Disease, and is a death only policy.

chessguy wrote: »

Does the mortgage period extend if my wife signs up too (her age is 41)she works part time
about 12 hours a week.I work full time,

Its a joint policy- once you're married your wife has a legal right to half of any property you purchase, liens excluded, so she is automatically party to any residential mortgage you may take out. Her income will be factored into the amount you are able to borrow, along with the interest rate they charge you. The fact they her work is part-time is irrelevant in this respect. Also- her part-time work has no bearing on the period of the mortgage, as you are the principal mortgagee in the lending institution's eyes.

chessguy wrote: »

I am expecting to buy in the next 12 months when the house prices have really crashed ,) I expect them to fall drastically yet,so the average house price falls to circa 3 times the average wage and probably less.(thats just my opinion).

Why do you imagine that house prices will really crash in the next year? The ECB have not yet commenced increasing their rates- they are currently at 1% and normalisation will bring these to 4.5%. It will most probably take 3-4 years to reach this level, depending entirely on how the recovery goes in France and Germany- however inflation is an issue in both countries already. I would suggest that we will have at very least price falls for the next 5 years- as the market digests ongoing rate rises. Keep in mind the preponderance of tracker mortgages in Ireland- there will be real carnage when these begin to get to 'normal' levels......

chessguy wrote: »

I would be looking to get the max mortgage amount of 100.000

Your max mortgage is determined by factors such as your gross income, alongside that of your wife. The purchase price of the property will also come into the equation. Typically at the moment a first time buyer could expect to borrow according to:

3-4 times gross primary income +
1/2 secondary income

subject to a max of 80% LTV on a house or 50% (depending on location) on the LTV of an apartment/townhouse

&

Gross repayments (inclusive of any credit card debt, overdrafts, hirepurchase agreements etc) being less than 35% of NET income (any mortgage would be reduced to bring repayments to this magical 35% of net income level for all debt repayments- so it makes sense to pay off any debts at all that you might have)

chessguy wrote: »

Should I get this from a bank ?
or from credit union ?
any idea how much the credit loan out max ,
I save about 500. a month with the local Credit union
I mean do they do mortgages or are they too expensive,

Credit unions are not mandated to provide residential mortgages, full stop. This has been hammered home most recently in directives from the Irish central bank 2 weeks ago. You would be best advised to pay an independent mortgage advisor to research an appropriate package for you (its not free- you will have to pay). Unfortunately times have changed and the era of cheap and easy money is long gone.

chessguy wrote: »

I understand with a mortgage insurance is required , unfortunately that may be an issue to get insured now,but I am already insured for life and that amount would cover a mortgage , so would I still need to take out separate cover with my mortgage?

It is normal to require a mortgage holder to have a separate life assurance policy, sufficient to repay the outstanding mortgage. The exact rules will differ from lender to lender- you would need to hammer this out.

chessguy wrote: »

When applying for a mortgage to get the best interest rates what percentage of the total price should be paid as a deposit,?
thanks for taking the time to reply ,:)

These days you will *have* to pay a minimum 20% in cash upfront on any property- and significantly higher if the property is an apartment or townhouse.

Once you go over the minimum deposit requirements- any additional payment you can make will normally be reflected in the interest rate quoted- as the lower LTV of the mortgage represents less risk to the lender.

Seriously- take your time- do as much research as possible- and engage independent financial advice- it'll be worth it in the long run. Also- I'd suggest prices will start a large scale fall (over and above current falls) once the ECB commences with its rate rises- which will take several years to implement- so don't be in any hurry to try to figure when prices have bottomed out- there is very little possibility of stability returning to the housing sector for the foreseeable future.

JuliusCaesar

I already had a life insurance policy when I took out my mortgage - they looked at it and said I didn't have to take out another one.

I'd disagree about the broker. It's worth taking the time off work, if you can, to go round the various banks yourself. There aren't that many! You could set up the appointments in advance so you get them all covered in 2 days or so. They all need the same documentation and each can photocopy the papers you are carrying around.

chessguy

Thanks smccarrick, for a great response it is appreciated,

I have a query , if you could oblige...

"It is normal to require a mortgage holder to have a separate life assurance policy, sufficient to repay the outstanding mortgage. The exact rules will differ from lender to lender- you would need to hammer this out."

I also have a separate death only policy which would cover the mortgage and some ,leaving enough for wifes shopping and kids education needs,

I do hope this would be accepted ?

But
If the policy above was not to be accepted ,and feks , the house price was say 100,000, and I managed a deposit of 50%, this could be done by a loan of say 25000, from the Credit union , and the rest from some my savings.

Credit union loans for me are covered in case of Death.
Not sure if this is the same for all members and for all credit union branches.

Would the Bank still require a policy to cover the mortgage ?
as they could hold on to the house papers as collateral, and in the event of my misfortune , the above mentioned policy I have would cover any debt..and care for my kin.

Thanks ..

chessguy

Thanks JuliusCaesar just seen your post so it seems possible, to carry over an insurance policy.
things are looking better...

ricman

You might get ten or 20k from a credit union ,mortgages are usually 25 to 30 plus years long.YOUR income is more important than your age,banks are looking for people in an established secure job.SO you,d need around 25 minimum the get a loan,ie you have to pay legal fees,etc and they can check if you have loans out,eg car loan etc
credit unions are for small,loans ,not home loans, they simply would not not have 100k to lend to one person.

chessguy

sidenote
I am been with the same employer for several years , and I have no loans what so ever,credit card or otherwise.

This should help my standing , I would not be looking for a mortgage that was say 3 times more than my Net salary,

My wifes income would be an extra income , it would not be required , for the mortgage , or for household expenses.. but saved as a nest egg..

But this could be used to pay the credit union loan if required ,so it would not be "seen as an outstanding loan in my disfavor..

Goldenlady

Hey Chess Guy,

We went for a mortgage recently and they now allow you get it to 70 years old, as my partner is 44 so they gave us a 26 year mortgage - it didnt matter that Im 31, they go with the eldest age!

Good luck, hope it all works out

GL

The_Conductor

Goldenlady wrote: »

Hey Chess Guy,

We went for a mortgage recently and they now allow you get it to 70 years old, as my partner is 44 so they gave us a 26 year mortgage - it didnt matter that Im 31, they go with the eldest age!

Good luck, hope it all works out

GL

It does make a lot of sense to be honest- who wants to be lumped with a mortgage in their 70s!

I think there is a presumption when there are partners that both will retire within a fairly close window- allowing them to pursue all the things they've dreamt of for years.

S.

Countryripple

Hi there.

I am also in a similar situation. myself and my fiance are hoping to start applying for a mortgage in the coming weeks. We are in our late 20's and early 30's.

We really do not know where to start.

If anyone could give us a heads up in what we are going to need document wise before heading into a broker that would be great.

Thanks

Goldenlady

The bad news is they are not giving out mortgages that easily at the moment! We were initially approved for 250k last year, our approval ran out as we lost a house at the last minute. They have now almost halved the amount available to us, even though we have no extra debts. Im waiting for an answer from them as to why!!

Good luck with your application though, maybe its just us!!:)

irlrobins

Whether you go to a broker or bank you'll need the same paperwork. The aim is to show how much income you currently make and provide paperwork to support your claim. Therefore you need to have the following:

1) P60 from last tax year
2) Payslips from the last three months
3) Prove of savings/6 months of bank statements
4) Salary Cert stamped by your employer

If you're self employed you'll need to show audited accounts for the past 3years and a statement from your accountant on your tax position.

Also proof of identity (driving licence, passport) and proof of current address (utility bill etc).

If I were you, I'd cut out the middle man and go to the banks direct. There's not too many lending these days and they all ask for the same info. So get it right for one and then just submit copies to the others.

shefra

Can someone explain 'death only' policy please.

irlrobins

Assuming in relation to Life Assurance: the policy will only pay out on your death (not for sickness, unemployment, etc). Life assurance is an insurance policy that protects the bank. If you die before the mortgage has been repaid, the assurance policy will cover the outstanding debt.

The_Conductor

shefra wrote: »

Can someone explain 'death only' policy please.

Normal life assurance policies will continue to pay your mortgage for you, in the event of an illness occurring which precludes you from earning a normal living. Often where the person has a pre-existing medical condition, a condition of the life assurance policy might be-

1. That the policy receives a weighting (aka you pay a higher premia than you would otherwise do).
or
2. The pre-existing medical condition, or complications arising because of it- are not covered by the life assurance policy- but other accidents or illnesses are. You'd also probably have a weighting on your policy in this instance.
or
3. Regardless of what happens to you- your life assurance will only kick in and pay your mortgage if you die. Believe it or not- they'll probably have a weighting on this one too..... (this is the aforementioned 'death-only' policy)

There was a previous class here too- which covered your mortgage if you lost your job- but surprise, surprise, in the current climate they are winding up these policies where/when possible.

phormium

Life Cover/Mortgage Protection (not repayment protection) fall into several categories based mainly on cost and benefits.

Starting from the bottom - most basic type would be life cover only on a decreasing basis, this means the amount paid out decreases in line with the mortgage, in other words if you died when there was only 1 payment left on the mortgage then this is all that would be paid out. There will never be a surplus, this is the most basic type and the minimum required by any lender, it must be for the amount of the loan and the full term on all borrowers. Normally on a first death basis which means one payout only.

Level term policy would be next step up, this would again have to be for amount and term of loan for all borrowers but the main difference is the amount insured remains level for the full term. In other words if you took it out for 200k and died with 1 payment left on mortgage then full 200k would still be paid out. This type of policy can have a surplus left for the next of kin after paying off mortgage in event of death but this would depend how far into the mortgage a person was. Dearer than above but imo better value.

Either of the above can have the addition of critical/serious illness cover added which is kind of like an advance on your life cover if you are diagnosed with any of the illnesses covered. This adds cost and if you are a smoker probably prohibitively expensive.

This is a very simplified explanation of main types, there are many extra options that can be tagged on to the basic policies such as joint life or dual life - joint life only pays out on first death, dual life has two separate covers and could pay out twice if both borrowers were unlucky enough to die within the term.

Easiest way to compare prices is with basic decreasing term cover for specific amount, specific term, pays out if you die and thats it, you can then decide if you want to pay extra for any of the frills.

Dyr

smccarrick wrote: »

1
These days you will *have* to pay a minimum 20% in cash upfront on any property- and significantly higher if the property is an apartment or townhouse.

Is 20% the rule of thumb that banks are using nowadays?

The_Conductor

Bambi wrote: »

Is 20% the rule of thumb that banks are using nowadays?

It will vary from institution to institution, but is dependent on location and whether the property being purchased is a freehold, leasehold, house or apartment.......

Its a reasonable rule of thumb- and indeed the conditions these days are often even stricter than the 20%........

Countryripple

Thanks for that info Irilrobbins.

Not using a broker to get any kind of deal. Its just that i work in a place that i can very very rarely get time off from for appointments. So it would just be handier for us if someone could do the looking around.

That is grand about all those documents, just wanted a heads up on what to get together. Can you please tell me though what a salary cert is? Is this an actual goverment type document or basically a letter from your employer with these details on it? Because I know for a fact my employer does not have a company stamp!!

We have our main joint savings account in the EBS. Should they be who we go to first? Ive heard they are one of the fewer places letting any money out?

irlrobins

The salary cert is just a form that your employer has to complete and sign/stamp. It will confirm your current salary, if you're full or part time, any bonuses due etc. Each bank will have it's own form that you can get in the branch.

But for an example, take a look here: http://www.mortgagebrokers.ie/downloads/IMB_salary_certificate_form.pdf

Countryripple

Ah grand. Thanks