FAQ Mortgages – your questions answered

JC Mortgages Role as Mortgage Broker. A broker’s role is twofold, one is to educate people as to where they are in their mortgage process, and what they may need to do to get the home they want, and then when they are ready manage the process with the mortgage lenders (banks) to the very day you get the keys to your home.

Here at JC Mortgages we believe that a mortgage broker can help in making sure the little details don’t stop you from getting the bank to say Yes, whether it be by paying your rent in the wrong way, not saving enough money per month or sending money outside the country. On top of that, we make sure you get access to either the most amount of money or the best possible mortgage interest rate or a combination of both.

• Your mortgage broker will be educated where you stand and what you may need to do to get the home you want
• You then have someone whose profession is to present mortgage applications to the bank in a way that gives you (our client) the best opportunity to get approved for the maximum amount
• Once approved, making sure you, at the time you find your home and are ready to drawdown on your mortgage, you still have the best deal and interest rate in the market for you. If you go directly to a bank they won’t be bringing this information to you

This is definitely the painful part, yet very doable, as it involves collecting all your paperwork. All of your bank accounts statements, payslips (if PAYE employed), revenue documents and salary certs to name a few.

We at JC Mortgages have an IT portal system where you can upload your paperwork online with your computer or mobile phone. We will tell you if you have provided all the correct documents to apply for your mortgage or what is missing .This has been built using modern technology to help our customers and make this an easier process. That said, there is still a lot of paperwork required but all worth it when you get the keys to your home.

Once all the paperwork is submitted correctly we analyse fully and confirm how much we believe we can get you approved for from the bank and ask questions we believe the bank will ask. The overall aim being to present your application in the cleanest way possible to make it as easy as possible to get the bank to say yes.

Once your mortgage application is ready and submitted to the bank, it can take anywhere from two to four weeks for the bank to formally approve. Far too long in our opinion, but once we have seen your documents and are happy we will advise you to go and look for a home and if you find something we will present a document to you to allow you to move forward while we wait for the bank.

This is also known as an AIP (Approval in Principle). This is when the bank(s) have assessed all your submitted paperwork including payslips, bank statements etc. and confirm that they are happy to lend you an amount subject to certain conditions.

This is the best course – to look for an approval in principle before trying to buy a home. While human nature may lead to saying I will go to the bank after finding a home in practice it takes so much stress out of the process if you have the approval in advance. Property Selling agents will nearly always ask this question “have you got an approval in principle”.

Once you have the approval in principle the next step is to find a property. Once you have found your home we (on your behalf) would go back to the bank with details of the property and look to get you a formal loan offer so you can move forward and sign contracts.

This is when you gather all the documents / paperwork required by the bank and submit them for a formal analysis. If the bank is happy they will issue an approval in principle (AIP).

This is based on two main factors. 1) How much are you earning? And 2) That you prove to the bank that you can make the monthly repayments on your mortgage loan, based on your income. Other factors that are also included in this would include age, dependent children, your credit history and any other loans you have.

In practice the older you are the less the bank will lend, the more children you have may reduce lending capacity as well as short term loans or a poor credit history.

As a rule of thumb, the bank will lend four times your salary. However, this is subject to a lot of other factors. Basic salary is much more important than commission, overtime or bonuses. Your age, dependent children and short term loans all factor into the decision and could possibly reduce the amount you can borrow. The next key factor is proving to the bank you can meet your monthly mortgage repayments. Monthly savings and rent need to be very easy to identify.

We can also advise you, when looking to buy a home with our free mortgage roadmap. This will show you where you currently stand and what you might need to do to get the home you want taking all the above factors into account.

The maximum a bank will lend is 90% of cost price, so assuming you have qualified for 90% , you will need to bring 10% of cost price.

Where does this 10% mortgage deposit come from?
For a second hand home, it will have to come from your savings plus any gift if available. On top of this you will also need to have funds to cover stamp duty 1% of cost price along with funds to cover legal fees (Circa €3,500 made up of professional fee approximately €1,700 to €1,800, registration fee, VAT and search cost )

For new properties there are 2 schemes that can potentially help with the deposit:

1. 1. Help to buy scheme – up to €30,000 based on tax paid in 4 previous tax years, watch this video for more information on the Help to buy scheme
   2. First home scheme – makes up the difference between what the bank will lend and the cost price, subject to conditions based on where the property is, watch this video for more information on First home scheme

Unfortunately, yes, when buying a second hand home best practice is always to do a survey to make sure there are no issues that you need to know about before you go ahead with the purchase. Video: How to deal with a survey that you get information that you had not factored in

With new properties, you will always need to factor in the cost of furniture and what it will cost to fit out your new home.

Other costs would include:

1. Valuation when buying property €150 euro (with new properties there can be two required one a beginning and one at the end)
2. Insurance will be required. Both home insurance and mortgage protection insurance. The costs will all depend on your circumstances but you need to be aware of them for your budgeting

This is a question often asked. The answer is “it makes securing a mortgage more difficult”. If there is a debt that hasn’t been cleared, then unless a reason that can be proved beyond your control – then the answer is no you cannot get a mortgage with bad credit. However, in most cases if credit fixes it, then you wait a year before approaching a bank. Yet even then you could be refused. You will need to keep everything in good order and be able to properly explain what happened and why. The longer the time since credit was fixed the better the chance of overcoming any credit issue in the past.

Keeping your bank accounts in good order with no gambling, no living in overdraft and clearly identifiable savings and rent. If you have family living outside of Ireland don’t send money to them via your bank accounts. It goes against you. (I don’t agree with this but this is the view the banks have at this current time).

Normally approval lasts for six months. Some can last 12 months. Yet, I always advise my clients to keep their bank accounts in the same order as they had prior to submitting for mortgage approval, as at any point the banks are entitled to request you to resubmit your documentation again if they wish to do so. Once approved the aim is to find a property to purchase.

Absolutely, the benefits of dealing with a mortgage broker in Ireland is that our role is to make sure you are getting the best possible deal at the point of finding a property. We always advise to make the final decision about two months beforehand as moving from one bank to another can take time.