Mortgage

ION08

Hi Guys,

I'm in a pretty good financial situation, property prices seem relatively affordable at the moment and so have started thinking about applying for mortgage.

I have played around with a few mortgage calculators online but am not too well versed on the whole mortgage situation.

What does application process entail?

How long does it usually take?

What's the likelyhood of approval given the current economic situation?

What are the best type of mortgages and ones to avoid?

Thanks for any insight!

crazy cat lady

ION08 wrote: »

Hi Guys,

I'm in a pretty good financial situation, property prices seem relatively affordable at the moment and so have started thinking about applying for mortgage.

I have played around with a few mortgage calculators online but am not too well versed on the whole mortgage situation.

What does application process entail?

How long does it usually take?

What's the likelyhood of approval given the current economic situation?

What are the best type of mortgages and ones to avoid?

Thanks for any insight!

It will depend entirely on your situation. I would recommend speaking with a broker. We just got approved with less than ideal circumstances, but that's all thanks to our broker!

the groutch

the main criteria the bank will be looking for are:

job security - a permanent contract for at least the last 6 months (ideally 12 months +), in a sector where there isn't high levels of business closures.

deposit of at least 10%, ideally 15-20%, lump sums from parents are best avoided if possible.
and you won't be able to use all your savings on this, there's still solicitors fees, moving expenses, furnishings for the new place etc you'll have to hold onto.

savings history - evidence of consistent savings over at least a year, if your savings are with the bank you're applying to it's better imo.

other credit - if you can clear other small loans (car, credit union, etc) and credit card bills it will stand to you.

stress testing - they will look at all the worst case scenarios, eg. sharp interest rate rises, in a joint application if one of you loses your job, etc and if you'd be likely to still make the repayments.
this is something you should check out too.

in relation to the type of mortgage most people tend to go for a 2 year fixed rate, can be anything from 1-5 years but that decision is up to the individual.
It's good to have certainty of your payments for a while while you balance out your finances, but the longer the fixed rate term, the higher the interest rate.

when it comes to buying, make sure you have "approval in principal" for X amount before you make any bids.

ted1

Just ring your bank and see what they say. We didn't bother with a broker, if your in a steady job with a good income there's no real need for one.

Noddy23

You should contact a broker. We used a guy that posts on these forums regularly under the name Killers. I couldn't recommend him highly enough. He was a fantastic source of information. Knew exactly how much we would get from each financial institution. Helped us put together our application which was complicated by the fact that I was on unpaid maternity at the time, arranged life cover, home insurance etc. and for this service we paid absolutely nothing as he gets a percentage from the bank but doesn't charge the person applying for the mortgage.
Best of luck!

jackhammer

As some other posters have said, get a broker. When I went for a mortgage, I initially went directly to the banks and it was an absolute nightmare. My contact persons in the banks were very sluggish in providing feedback. So much so, I engaged a broker 2 months later and he got a mortgage sorted for me, while my bank direct contacts were still twiddling their thumbs.

It appears to me that bank officials have no incentive to close the deal, they get paid their salary regardless. A broker doesn't get his fee from the bank unless a mortgage is drawn, so a broker has a vested interest in getting you the mortgage.

Noddy23

Apologies, that broker uses the name killers1 so you can find him that way if you're interested.

nelly17

The bank will ask you about Life assurance and Home insurance when you apply for a mortgage- they are generally the most expensive with the banks offering the Mortgage - shop around