Banks are lending, without a doubt. But they are also applying rigorous credit assessments and approval processes before saying yes to any mortgage applicant.
Applying for a mortgage is a big undertaking – and one which needs to start months before the application forms are even looked at. You might only get one bite at the cherry with a lender so it’s crucial you put your best foot forward.
We would advise anyone who thinks they might be in a position to take their first steps onto the property ladder in 2018 to begin the prep work at least 3, but ideally 6, months out.
Preparation is imperative before you approach any lender. Taking the time to speak with an expert who can tell you what you need to do is an invaluable exercise and one which will stand to you throughout the process.
Before they will give any consideration to a mortgage application, a bank will first look the applicant’s credit history and their recent banking history. Ultimately, what they are looking for is a capacity to repay any loan tendered and a propensity to do so – as evidenced by past behaviour.
There are a number of “red flags” that will put a lender off in part, or perhaps, in full – any applicant must ensure that these are not raised on their application. “Red flags” might include:
- Overdrafts – authorised or otherwise
- On line gambling referred to on your bank/credit card statements
- Cash advances on credit cards, even on holidays
- Non-documentation of regular payments such as rent
- An irregular savings pattern
- Erratic spending patterns
- Poor credit rating
Steps applicants can take to boost their chances:
- Rent: Ensure this is paid through your bank account as bank will not accept this as proven repayment ability unless it is evidenced on your bank statement
- Overdrafts: Even if you have an approved overdraft facility, it is better not to use it on a regular basis
- Credit cards: Ensure balances are cleared each month. Aside from their portraying a better picture of the applicant, this will save interest as some credit card companies charge up to 18%
- Loans: Ensure all monthly repayments are fully up to date
- Savings: Transfer your savings into one account and save a regular amount each month – do not make any withdrawals from this dedicated savings account
- Deposit: You do not need to have all of your deposit before you apply. Once you have confirmation that a gift is available, that will suffice for Approval in Principle
- Employment: Being in permanent employment is often a plus. But applicants will be reviewed on a case by case basis. If you are self-employed then you must ensure that have all of your accounts fully up to date and all relevant returns filed with Revenue. Contract workers should include a copy of their CV as well as your last 3 p60s
- Expats will need to request a copy of their credit history from the country in which they currently reside
You will need the following to ensure your application is complete:
- Photo Identification
- P60 for last year
- Pay Slips – 6 most recent
- Certificate of Income – to be completed & stamped by employer
- Current Account Statements – last 6 months
- Savings Account Statements – last 6 months
- Credit Card Statements – last 6 months
- Loan / Mortgage Statements – last 12 months
If you are interested in getting a mortgage and would like to speak to us at MyMortgages.ie please don’t hesitate to contact us at [email protected] in Cork +353 21 4277037 or 353 86 8060601
MyMortgages Ltd t/a MyMortgages.ie is regulated by the Central Bank of Ireland