Beginners Guide to Mortgage?

HomeBuyer32

Hi guys,

Am hoping to get a mortgage for my first house in 6-12 months and just wondering if there's anything I should know at this stage. Any tips or advice. Maybe something you wish you knew 6-12 months before applying for your mortgage?

Does it matter where my current account is? Does it matter where my savings are?

I see BOI have a mortgage saver account with a potential €2k bonus after 6 months if you go with a BOI mortgage. As a place to store savings it seems like a no brainer?


Thanks

pwurple

Watch what you spend on from your debit and credit cards. I was doing the office lotto syndicate online from my account years ago and it flagged me as having a gambling addiction. So if you are paddy powers person or lotto, cash only.

Direct debits are another one to knock on the head 6 months out. Spotify or prime, small amounts regularly.. those all reduce the amount you can borrow.

Try to get rid of all debt. Car loan, pay off credit cards, any old student loans. Gone.



For your savings, check you actually want that BOI mortgage. That their rate suits you. Otherwise, if you go somewhere else, you get zilch. Not that there is much in savings interest at the moment anyway.

HomeBuyer32

pwurple wrote: »

Watch what you spend on from your debit and credit cards. I was doing the office lotto syndicate online from my account years ago and it flagged me as having a gambling addiction. So if you are paddy powers person or lotto, cash only.

Direct debits are another one to knock on the head 6 months out. Spotify or prime, small amounts regularly.. those all reduce the amount you can borrow.

Try to get rid of all debt. Car loan, pay off credit cards, any old student loans. Gone.

Thanks pwurple.

Credit card will be paid off this week. No loans at all. Not many direct debits.

pwurple wrote: »

For your savings, check you actually want that BOI mortgage. That their rate suits you. Otherwise, if you go somewhere else, you get zilch. Not that there is much in savings interest at the moment anyway.

Yeah that's my thought. It looks like the money is not going to earn much anywhere else so regardless of what mortgage provider I end up with maybe it's a no-brainer to save using the BOI mortgage saver just in case?

Looly8726

Just got approval this week and we only applied off the cuff so well done getting organized!!
Tips as follows:
Regular savings to any saving account really, no dipping... make sure you have proper records of rent paid, that it goes from your account on same date every month and is called “Rent for x address”.
Look up online calculators for how much you want to borrow and check out the repayment amount then make sure your rent and savings are more than the amount of the repayments.
Pay off any loans or debt of at all possible and don’t go too heavy on the credit card.

HomeBuyer32

I'm in a public office on a fixed pay scale. I'm going to be earning €5k more in 5 years. Nearly €10k more in 10 years.

Would any of this be taken into account in their calculations of how much I can borrow?

HomeBuyer32

Looly8726 wrote: »

Just got approval this week and we only applied off the cuff so well done getting organized!!

Congrats Looly. And thanks. Savings should be okay but my salary is a bit lower than I'd prefer but hopefully a bit of early preparation might help.

Black_Knight

HomeBuyer32 wrote: »

I'm in a public office on a fixed pay scale. I'm going to be earning €5k more in 5 years. Nearly €10k more in 10 years.

Would any of this be taken into account in their calculations of how much I can borrow?

No.

Current salary, current savings, current expenses. In a nutshell that's what they're basing their risk on.

Looly8726

HomeBuyer32 wrote: »

Congrats Looly. And thanks. Savings should be okay but my salary is a bit lower than I'd prefer but hopefully a bit of early preparation might help.

We were in a similar boat in that my partners salary is made up of a base salary and various allowances... they would only account for his base salary so it meant we needed more of a deposit in our case. I don’t know much about salary scales though as we are both private sector.

Black_Knight

Being 6-12 months from buying a house, you've very little to do.

- Clear any debt
- Have regular savings
- Don't dip into those savings
- No Paddypower or lotto etc.
- Don't get married , or if you do, get approval in principle before you spend money on the wedding. Chances are you'll get money back as gifts, but banks might look at it as "wreckless spending" :rolleyes:

If it's a new home you might be looking at, check out the help to buy scheme for first time buyers of new builds. Not sure when/if that's planned to expire.

Direct debits are fine. If someone is "hiding" those expenses (spotify etc) for the sake of getting a higher mortgage it sounds like they're not able to afford that high mortgage.

123Vicki

Bank of Ireland very harsh. Declined us as we had credit cards and I have a personal loan. Applied 1 week later with PTSB and they didn't factor in the credit cards or loan and got approved within the week. We will get 2% cashback at drawdown and 2%back off monthly mortgage payments.

Regular savings and any transactions over approx 100 looked at but not in great detail. Best of luck.

Black_Knight

HomeBuyer32 wrote: »

Congrats Looly. And thanks. Savings should be okay but my salary is a bit lower than I'd prefer but hopefully a bit of early preparation might help.

Prepare for the worst case scenario. 3.5 times your combined salary as the max they'll offer you (assuming no dependants). Whatever extra you think you'll end up needing to fund a house, you'll have to make do with your deposit. It's tough to do, but at least you've 6-12 months to go savings crazy.

Make sure you're not overpaying on utilities, or your phone. TV and broadband providers typically give you deals if you threaten to leave them, and even better deals if you follow through and actually do proceed to cancel.

Looly8726

Also found BOI very harsh... wouldn’t worry too much about direct debits either.. we have Netflix, audible and Spotify accounts.. as long as you’re saving, paying rent, have your deposit and the repayments are within your affordability then you should be ok.
One other piece of advice would be to get your full approval in principle before you go looking at houses at all. Don’t wait until you find something you think you can afford to go looking for the mortgage! We went in to the bank and got AIP on the spot... it wasn’t worth the paper it was written on but naively we thought we were out of the woods at that!

nutjobb

123Vicki wrote: »

Bank of Ireland very harsh. Declined us as we had credit cards and I have a personal loan. Applied 1 week later with PTSB and they didn't factor in the credit cards or loan and got approved within the week. We will get 2% cashback at drawdown and 2%back off monthly mortgage payments.

Regular savings and any transactions over approx 100 looked at but not in great detail. Best of luck.

Agreed about boi, I work as a contractor for the last 1.5 years with good savings and salary. She is permanent with hse. Wouldn't entertain us as I am a contractor.

Went to end and had no issues.

mortgage69

Hello, great thread. We are a couple with a combined income of 115k so i believe that amounts to roughly 400k.

Living in the west of Ireland so thats an advantage from the get go i suppose being a bit cheaper than Dublin. We are hoping to buy in 12 months time and have just started the savings now really! My question is im looking to get a loan for 20k in August for a car and if approved(whick i think it will be) will the banks frown on this when it comes to the mortgage?

I have read ptsb and the like are fine with it just AIB that might be a problem. I assume people get approved for mortgages all the time while still having loans right? I know it depends on how much etc but just wondered in general. We have no credit cards or outstanding loans.

jlm29

mortgage69 wrote: »

Hello, great thread. We are a couple with a combined income of 115k so i believe that amounts to roughly 400k.

Living in the west of Ireland so thats an advantage from the get go i suppose being a bit cheaper than Dublin. We are hoping to buy in 12 months time and have just started the savings now really! My question is im looking to get a loan for 20k in August for a car and if approved(whick i think it will be) will the banks frown on this when it comes to the mortgage?

I have read ptsb and the like are fine with it just AIB that might be a problem. I assume people get approved for mortgages all the time while still having loans right? I know it depends on how much etc but just wondered in general. We have no credit cards or outstanding loans.

They’ll look at your repayments on the loan, and knock it off how much you can afford to pay back every month. Unless it’s changed recently, AIB calculate affordability by adding both monthly salaries together. The subtracting any loan repayments or commitments like childcare. There needs to be (I think) €1050 and €275 (again, not 100% on the figure, but it’s not too far away from that) per child to live on, after the mortgage is paid.

mortgage69

jlm29 wrote: »

They’ll look at your repayments on the loan, and knock it off how much you can afford to pay back every month. Unless it’s changed recently, AIB calculate affordability by adding both monthly salaries together. The subtracting any loan repayments or commitments like childcare. There needs to be (I think) €1050 and €275 (again, not 100% on the figure, but it’s not too far away from that) per child to live on, after the mortgage is paid.

Ok thanks, is 20k a hugh amount do you think to have? I must add we are 35 and 40 when going for this mortgage do you think our age will go against us in terms of borrowing?

Antares35

We are in a similar position but will be closer to 12 months when we are ready! I heard that if you have a credit card, you can use it to improve your credit rating by using e.g. one third of your limit and repaying in full each month. Is this a useful exercise or are we better to just cup up the card?

voluntary

mortgage69 wrote: »

Ok thanks, is 20k a hugh amount do you think to have? I must add we are 35 and 40 when going for this mortgage do you think our age will go against us in terms of borrowing?

24-25 years is likely the longest term you're looking for. It's unlikely bank gives you a loan with last repayment going over 65 years old.

voluntary

Antares35 wrote: »

We are in a similar position but will be closer to 12 months when we are ready! I heard that if you have a credit card, you can use it to improve your credit rating by using e.g. one third of your limit and repaying in full each month. Is this a useful exercise or are we better to just cup up the card?

This is a myth. Just make sure you have as little outstanding debt as possible when you apply for a mortgage. It's the regular savings + current rent what banks are looking for.

Creamy Goodness

Antares35 wrote: »

We are in a similar position but will be closer to 12 months when we are ready! I heard that if you have a credit card, you can use it to improve your credit rating by using e.g. one third of your limit and repaying in full each month. Is this a useful exercise or are we better to just cup up the card?

not really, Ireland isn't huge into credit scores. Just make sure you've never missed a payment on any credit you've been given and you'll be fine. If you've ever paid a cent interest on a credit card, cut it up as it's not doing any favours.

Sarn

voluntary wrote: »

24-25 years is likely the longest term you're looking for. It's unlikely bank gives you a loan with last repayment going over 65 years old.

Some banks give up to age 70, although I wouldn’t like to be paying a mortgage at that age.

mortgage69

voluntary wrote: »

24-25 years is likely the longest term you're looking for. It's unlikely bank gives you a loan with last repayment going over 65 years old.

ok thanks, would it be unlikely for us to be approved for say a 320k mortgage based on 25 years then?

voluntary

mortgage69 wrote: »

ok thanks, would it be unlikely for us to be approved for say a 320k mortgage based on 25 years then?

I think you should be able to easily get it. Assuming you can prove you can afford montly repayments about 1500 Euros (bank will test you against 30% more than that).

using mortgage calc:
house worth 360,000
loan 320,000
term 25 years
2.60%

repayments: €1,451.74

jlm29

mortgage69 wrote: »

Ok thanks, is 20k a hugh amount do you think to have? I must add we are 35 and 40 when going for this mortgage do you think our age will go against us in terms of borrowing?

My OH was 46 when we took out our mortgage, so we were given a 19 year term.
The fact that it’s 20k doesn’t matter, it’s how much monthly you’ll be repaying that’s the issue in terms of affordability. I think it’s BOI have a good (quick) calculator on their website that lets you put in a few figures and see what you’re at. You can put in the 2 salaries, other monthly commitments like loans, how much you’re thinking of spending, and see what you can borrow firstly, and how much your repayments will be.

Buy a banger and drive it for a year instead of borrowing 20k.
Once settled into your new house go for the new car.
20k might make a difference when buying or finishing a house.

Creamy Goodness

this is the second time in the last few weeks that someone has looked to getting a largish loan for a depreciating asset whilst trying to get a mortgage... it's absolutely baffling.

mortgage69

Deleted User wrote: »

Buy a banger and drive it for a year instead of borrowing 20k.
Once settled into your new house go for the new car.
20k might make a difference when buying or finishing a house.

yeah i did consider this (and really should) suck it up for the year and go for it after.

mortgage69

Creamy Goodness wrote: »

this is the second time in the last few weeks that someone has looked to getting a largish loan for a depreciating asset whilst trying to get a mortgage... it's absolutely baffling.

sorry this aimed at me? Do explain please im new to all this.

mortgage69

voluntary wrote: »

I think you should be able to easily get it. Assuming you can prove you can afford montly repayments about 1500 Euros (bank will test you against 30% more than that).

using mortgage calc:
house worth 360,000
loan 320,000
term 25 years
2.60%

repayments: €1,451.74

Based on this would we need 40k deposit?

Creamy Goodness

mortgage69 wrote: »

sorry this aimed at me? Do explain please im new to all this.

Yes, a mortgage is one of the biggest loans you'll ever get. you're getting the guts of 1/3rd of a million euro over x amount of years. the trade off is you get a lovely home to live in, however you're willing to jeopardise getting this loan for the sake of a comfier car as banks do not like risk. Whilst depending on the circumstances a 20k loan might be a small risk, it's a risk in the banks eyes.

The advice above is good; buy a small get-around car for 2-3k to do you until you get your house, then use it as trade-in/scrappage to get a 20k car.

jlm29

Creamy Goodness wrote: »

this is the second time in the last few weeks that someone has looked to getting a largish loan for a depreciating asset whilst trying to get a mortgage... it's absolutely baffling.

It’s about context really. If they have salaries of 115k between them, and want to buy a house for 200k, so can easily afford it, there’s nothing wrong with buying a decent car. If they’re on the cusp of what they can afford, and looking at houses for 400k, then it might be a bit more reckless.

Looly8726

I would avoid any large debt now, if you can suck it up for another few months and drive what you have! If you think about it how will you feel in 12 months time if the car puts your dream home just out of your reach based on your disposable income calculations?

Creamy Goodness

jlm29 wrote: »

It’s about context really. If they have salaries of 115k between them, and want to buy a house for 200k, so can easily afford it, there’s nothing wrong with buying a decent car. If they’re on the cusp of what they can afford, and looking at houses for 400k, then it might be a bit more reckless.

of course it's about context, but without knowing exactly what house price they're looking at (other than them doing 115k * 3.5) it's safe to assume they're going to be at the higher end of their budget.

I never mentioned there was something wrong with buying a decent car, but the key is when the timing is right.

maybe I'm just overly cautious. but when I was getting my mortgage I made sure every cent coming/going in/out of my accounts was squeaky clean.

mortgage69

Creamy Goodness wrote: »

Yes, a mortgage is one of the biggest loans you'll ever get. you're getting the guts of 1/3rd of a million euro over x amount of years. the trade off is you get a lovely home to live in, however you're willing to jeopardise getting this loan for the sake of a comfier car as banks do not like risk. Whilst depending on the circumstances a 20k loan might be a small risk, it's a risk in the banks eyes.

The advice above is good; buy a small get-around car for 2-3k to do you until you get your house, then use it as trade-in/scrappage to get a 20k car.

So...just to be clear, in terms of a 340k mortgage i was just using that as an example. We would equally be happy with a 200k mortgage or even less when the time comes. It really depends whats on the market when we do decide to buy. All we know is it has to be right for us, the price of it we dont really care. BUT it would be nice to have the option of say a new build or something when time comes. And yes based on this discussion I think i will review the 20k car loan and wait until after. It makes sense. I am learning all this as i go along so thanks a million for all yer advice and opinions.

Thoie

Make sure each person going on the mortgage has utility bills at your current address in their name. E.g., if Mrs Homebuyer has all the utility bills in her name, get at least one switched to Partner Homebuyer's name. Mobile phone bills often won't do.

Start keeping things like salary slips if you work for a company that still prints them out.

You will be surprised how often "someone" wants 6-12 months proof of address, proof of salary, proof of shoe size...

If either of you smoke, and are planning on quitting, do it sooner rather than later. Being smoke-free for >12 months helps cut the cost of life insurance greatly. Similarly if you're overweight and plan to lose weight anyway - the closer to "normal" BMI you are at the time of the assessment, the cheaper the monthly cost (broadly speaking).

Start thinking about who your solicitor will be before you start looking at houses - you'll often have to name one at pretty short notice if you're putting down a holding deposit.

Start the decluttering now - you don't want to end up moving a whole bunch of crap you don't want into your new home, and even with the best intentions, you're unlikely to do it "as we're packing". Pick an evening a month and do a room at a time. Try not to buy more stuff in the interim.

TheShow

loads of info in this tread:

https://www.boards.ie/vbulletin/showthread.php?t=2057501206

Looly8726

Thoie wrote: »

Make sure each person going on the mortgage has utility bills at your current address in their name. E.g., if Mrs Homebuyer has all the utility bills in her name, get at least one switched to Partner Homebuyer's name. Mobile phone bills often won't do.

Start keeping things like salary slips if you work for a company that still prints them out.

You will be surprised how often "someone" wants 6-12 months proof of address, proof of salary, proof of shoe size...

If either of you smoke, and are planning on quitting, do it sooner rather than later. Being smoke-free for >12 months helps cut the cost of life insurance greatly. Similarly if you're overweight and plan to lose weight anyway - the closer to "normal" BMI you are at the time of the assessment, the cheaper the monthly cost (broadly speaking).

Start thinking about who your solicitor will be before you start looking at houses - you'll often have to name one at pretty short notice if you're putting down a holding deposit.

Start the decluttering now - you don't want to end up moving a whole bunch of crap you don't want into your new home, and even with the best intentions, you're unlikely to do it "as we're packing". Pick an evening a month and do a room at a time. Try not to buy more stuff in the interim.

Great advice. We are also selling at the moment and it was very frustrating to wait a week for our “buyer” to name their solicitor. In the end their finance was refused and it was all a complete disaster. So definitely also get full approval in principle before you start looking!

Proof of shoe size 😂 lol!

mortgage69

awesome advice guys!

mortgage69

I remember some time back someone posted a link and it basically shows a listing of new builds around the country, anyone any ideas? Just wanted to keep an eye on whats coming up.

mortgage69

Looly8726 wrote: »

I would avoid any large debt now, if you can suck it up for another few months and drive what you have! If you think about it how will you feel in 12 months time if the car puts your dream home just out of your reach based on your disposable income calculations?

yes for sure, i would be bet senseless lol.

mortgage69

Creamy Goodness wrote: »

of course it's about context, but without knowing exactly what house price they're looking at (other than them doing 115k * 3.5) it's safe to assume they're going to be at the higher end of their budget.

I never mentioned there was something wrong with buying a decent car, but the key is when the timing is right.

maybe I'm just overly cautious. but when I was getting my mortgage I made sure every cent coming/going in/out of my accounts was squeaky clean.

no your right its a good way to be. We are quite organised people so will be watching everything from now on.

worker bee

Whichever lending agent you are going to sign up with, make sure you get a mortgage where you don't have to pay penalties for paying off early - whether it's lump sums or a regular monthly overpayment. Get that stipulation in writing in the terms and conditions.

voluntary

mortgage69 wrote: »

Based on this would we need 40k deposit?

No, that 40k was a sample. You'd need whatever deposit you need based on your circumstances. You'll need a minimum of between 10% and 20%

flipflophead22

Sorry to but in here, what sort of deposit would ya need for house below?

https://www.daft.ie/clare/houses-for-sale/clonlara/coolisteige-clonlara-clare-2127227/

myshirt

123Vicki wrote: »

Bank of Ireland very harsh. Declined us as we had credit cards and I have a personal loan. Applied 1 week later with PTSB and they didn't factor in the credit cards or loan and got approved within the week. We will get 2% cashback at drawdown and 2%back off monthly mortgage payments.

Regular savings and any transactions over approx 100 looked at but not in great detail. Best of luck.

Of all the banks you could go with, PTSB are the last bank you want to be stuck with. They are not in as good financial shape, and they have exhorbitant standard variable rates which they'll land you on if you ever got snookered and couldn't switch provider, or if a new lender didn't want your business. They have no capacity to provide forbearance or work with you. Very heavy handed if you got boxed into a corner. If everything is going good, excellent, but be careful with them if they are not because you'll ruin your credit rating well beyond anything that could be resolved off your ICB report in 5 years.

Creamy Goodness

flipflophead22 wrote: »

Sorry to but in here, what sort of deposit would ya need for house below?

https://www.daft.ie/clare/houses-for-sale/clonlara/coolisteige-clonlara-clare-2127227/

10% of purchase price - €35.5k if first time buyer.
20% of purchase price - €71k if up/down sizing.

Of course this is entirely dependent on what the mortgage provider is willing to give you. Majority of people will need a bigger deposit to make up the short fall

Antares35

voluntary wrote: »

This is a myth. Just make sure you have as little outstanding debt as possible when you apply for a mortgage. It's the regular savings + current rent what banks are looking for.

Thank you I hate all this adulty savings business. I want to buy wine and shoes I actually got a pair repaired this week instead of buying new ones!

We were looking at the BOI mortgage saver but might reconsider now since some people here have said they are stricter.

Antares35

Creamy Goodness wrote: »

not really, Ireland isn't huge into credit scores. Just make sure you've never missed a payment on any credit you've been given and you'll be fine. If you've ever paid a cent interest on a credit card, cut it up as it's not doing any favours.

I always pay the balance in full, made a personal promise to myself to never pay interest! But sometimes paying it in full will leave me a bit short at month end and I end up using it again, then paying it off etc. It is almost like borrowing from yourself. Think it might be wise to just lock it up for an emergency.

Get a broker. Let them guide you through everything else.

zweton

They take a cut for this I presume?

Are you using them as a middle man ?

Creamy Goodness

zweton wrote: »

They take a cut for this I presume?

Are you using them as a middle man ?

They get commission from the bank for bringing them business, you don't need to pay them.