Article First Published on Independent.ie by Michael Dowling on 23.03.2014.
Eight years ago, mortgage lending hit a peak of â‚¬40bn.
Things have changed since.
The value of mortgages dished out last year came to â‚¬2.5bn, but there are signs of recovery in the mortgage market â€“ and if you are a wealthy first-time buyer or well-heeled trader-upper, you have a good chance of getting a loan.
Furthermore, most lenders are offering â€˜track-moverâ€™ mortgages now, where you can trade up and carry your tracker mortgage with you â€“ albeit under a more expensive interest rate.
If you already own your own home, this could be just the carrot you need to trade up.
Here are 10 things you should know before applying for a mortgage:
(1)Â Â Â The security and nature of your job is of huge significance to a lender.
(2)Â Â Â You must be able to show you could have afforded the repayments for the mortgage you are seeking had you taken that loan out over the last 12 months.
(3)Â Â Â If paying rent, use direct debit or a standing order. Lenders do not recognise cash payments to your landlord.
(4)Donâ€™t try to hide credit union loans from your prospective lender. Over 200 credit unions are registered with the Irish Credit Bureau (ICB) and lenders will check its records.
(5)Â Â Â Credit cards show your pattern of spending on a monthly basis. So lenders will want to see three or six monthsâ€™ worth of credit card statements.
If you withdraw cash with your credit card, lenders will disapprove. If your credit limit is disproportionate to your salary, lenders will query it.
(6)Â Â Â Lenders will review your current account statements for six months. If you are always overdrawn, itâ€™ll be tough to get a loan.
(7)Â Â Â Your choice of lender will determine how long you have to repay a loan. Ulster will lend to age 65; AIB will lend to age 66; KBC lends to age 68 and Bank of Ireland and Permanent TSB lend to age 70.
(8)Â Â Â When you take out a mortgage, you must buy mortgage protection insurance to cover the mortgage repayments should you (or your partner if it is a joint mortgage) die before the loan is paid off.
Do not accept the policy offered by the bank, as this is unlikely to be the best value available.
(9)Â Â Â Like all professional fees, Solicitorsâ€™ fees vary greatly from one to another. Make a few calls and compare. Do not just go to the Solicitor that your parents used.
(10) A surveyorâ€™s report will usually cost around â‚¬400 and it is well worth it when you are spending hundreds of thousands on a property.
Michael Dowling is spokesman for the Independent Mortgage Advisers’ Federation.
It’s good to know your options, so why notÂ request a call back, as we are always happy to help.