Saving/Applying for a mortgage 2020-22 Edition

AIP usually underwritten but they will always recheck stuff once sale agreed. Main thing is to be able to explain it if comes up. You need to still be meeting all same criteria at time of AIP. Savings pm key for showing repayments but maybe yours comes from rent. Hopefully it is all fine. Just follow the steps. But key message is even if AIP underwritten they will fully assess you now again. Makes sense as bank wants to make sure nothings changes in circumstances. Just need to explain OD use. Id only be worried if it was showing signs financially stretched.

It sounds like you will have no problem. You are paying rent and savings coming out every month so that should cover what you are looking as a loan.

hi everyone , back again for advice as people were so helpful the last time . My loan offer came through . However loan offer states the post code as Dublin 9 , however all details through solicitor on the property say Dublin 17 . It’s the same property obviously and I got the Dublin 9 detail directly from the estate agent advert . Will this cause issue ? I’m afraid I’ll have to get loan offer resissued .

I wouldn't worry about it too much. Two or three explainable late fees or overlimits should be fine.

But get your credit report for free to give you piece of mind. I thought I was over the limit a few times and got charged late fees incorrectly a few times. I made my payments just after the incorrect statements and nothing showed up in my credit report. I actually did go a few euro over the limit one time but because I paid back in a respectable time frame that late fee never showed up on my credit report. One or two mistakes doesn't automatically show up your credit report. Depends what way your banks reporting works.

I would suggest get your credit report and go to a mortgage advisor at a brokers they will hopefully be able to provide you with an advice on how to proceed. It’s better to approach it this way rather than submitting an application to the lender and for them to see or read about it for the first time. Looks better if you approach it first (if your credit is an issue)

Sorry if this has been asked before, for a self build mortgage, when you draw down money from the bank, do they pay it directly to you, your solicitor or the builder? Thanks

Wouldn't think 2022 will come into it if applying now. Also, are Avant not at 6 or 7% fixed these days?

If the mortgage repayments go over the affordability threshold you could either extend the term or borrow less to bring down the repayments. If there's no actual leeway the bank will just offer you less than the full 4x amount.

Ah yes OK, I see their interest rates are a lot less. I had incorrectly lumped them in with Finance Ireland, when Avant have an actual bank behind them.

So, we’ve just gotten our A.I.P and have looked at a few houses, planning on bidding on one on Monday. Going back to my original post, I had nothing to worry about. No matter how much previous debt you had or held simultaneously, if paid off correctly or staying within limits is fine. A few learnings from my mortgage journey that might help other PAYE workers on here.

I happened to meet a financial advisor randomly through friends and they told me the lender is primarily concerned with three things leading up to the mortgage application which thankfully I had sorted. If you can show these, you are well on your way.

Affordability – Affordability is an obvious one, but can your rent and savings combined cover the cost of the mortgage + a 2% interest rate stress test? A lot of people fall into this trap where they think if they can show 2k savings and rent a month that will cover a 2k a month mortgage. You need to be saving the stress test on top to guarantee yourself approval from affordability. A 30 year €350k mortgage with 10% deposit saved (a €315k loan) at 3.8% as an example will cost you €1470 a month. Ideally you want to be showing from savings and rent that you can cover a 5.8% rate, which is a monthly repayment of €1850. If you can do that for six months on your statements, you will pass the affordability test easily. Having the 10% deposit saved/available also falls within the affordability pass/fail.

Job Security and Guaranteed income – Make sure the applicants are at least 6 months employment with the same place, ideally a year. Lenders are hesitant to loan to anyone with under this. Do not apply if you are in a probationary period. Gross income or joint incomes combined should not be over 4 times the loan amount you are looking for. He also said even though you can now get 4 times your income, in the eyes of the lender, 3.5 is better to aim for – if you can save a little longer to make it 3.5, it is worth doing.

Credit history – Again an obvious one but there is no need to freak out over small things like a few overlimit fees on a credit card, an explainable missed payment on a loan or always being in your overdraft (if it is an arranged overdraft an you get your account into credit once a month) . You shouldn’t have a missed payment, go over-limit on anything or apply for any other credit in the 6 months leading up to applying for your mortgage though. If you have had more serious credit issues, it is best to get a mortgage broker to advise you. Outside of these three, just try and avoid regular gambling, regular cash withdrawals and don’t have any unexplained large transactions in or out of your account within the last six months (year would be better). Additionally, have a separate account for your monthly savings and DO NOT touch that account for six months. I had a friend dip into theirs for a small amount and the lender told them come back in six months!

In applying for the mortgage itself we decided to go with a broker just in case I had missed anything and to have them give my documents a once over before applying. Honestly, if you have your documents ready, have some knowledge of interest rates and how much you can afford I really don’t think you need one. I’d probably only recommend getting a mortgage broker if you’re not great with organisation, paperwork or have had credit history problems in the past. Finally, www.mortgages.ie is a fantastic little site for a simple mortgage calculator, how much it will cost you with each lender and for you to get an idea who to go with when applying. The “Lively” app is excellent for getting you mortgage ready too and will protect you from any affordability surprises that you may not have considered.

Anyway, best of luck to anyone going through the process!

It's not fit for purpose in Dublin....so frustrating!