Repayment Capacity

One of the most important elements of applying for a mortgage is repayment capacity. The lenders will want reassurance that you can pay the monthly mortgage amount that you would be due to pay.

You can demonstrate repayment capacity in many ways, the main three would be, savings, rent or your current mortgage.

As an example, if you mortgage repayments are going to be 1500 per month, the lenders will want to see you paying this amount for at least 6 months prior to an application. One common mistake we have seen recently is clients who are saving 1500 at the start of a month and gradually withdrawing it as the month progresses. If you save 1500 in at the start of the month and finish the month with an increase of 500 in savings, you have only saved 500 euros that calendar month.

We can offer our tips and explain the best way to monitor this at any stage, please feel free to contact me at james.curd(at)yes.ie

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No Deposit? No Worries!

In an inflated economy, saving up for a deposit can seem like the most difficult part of buying a home especially when most of your net income is going into paying rent and your monthly bills. While having a large deposit gives you the best chance of getting a good mortgage deal with a low interest rate and a bigger house, there are options available for people with lower deposits and government help to get you on the housing ladder.

The average first-time buyer puts down a 10% deposit on their first home, which could mean finding a daunting €30,000 (on a €300,000 property) or more. However, there are also a few government schemes to help first time buyers get on the property ladder. These include the Help to Buy & First home Shared equity scheme.

Although the Help to buy scheme only applies to new build properties, with the purchase price of less than €500,000 and has a maximum amount of €30,000 that you can claim (please see more information about the scheme on the Citizens information website or …

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First Time Buyers

First Time Buyers guide

 

As a First Time Buyer, the idea of purchasing a new home can be a daunting prospect and you will be asking yourself numerous questions. How much can I (we) borrow? How much of a deposit will I need? Where should my deposit come from?

These are some of the questions we are here to answer, our goal is to give you the knowledge and peace of mind that you have a Broker who will guide you through the process and keep you informed every step of the way, right up until you have your keys.

As a First Time Buyer, lenders will Mortgage up to 90% of the property value and allow you to borrow up to 4x your income. For example if you were to purchase a property for 300k you could borrow up to 270k from a lender. You would then need an income of 67,500 per annum to qualify for this amount, if you are applying as joint applicants this is a salary of 33,750 per annum each, however the split does …

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Mortgage Myths Busted

Mortgages for anyone can be confusing, especially for young people or first time home-buyers. There are several common misconceptions or myths when talking about mortgages. Here we will set the record straight and bust those mortgage myths. 

It is NOT true that you have to be an existing member of a bank to get approved for a mortgage. Mortgage applications are assessed on a case to case basis. Being established at a bank already does not affect the outcome or make you more or less likely to get approved. Existing members also do NOT get better agreements. 

Having evidence of gambling will NOT exclude you from being able to get you a mortgage. Having several transactions to online gambling websites may raise some concerns to lenders but occasional transactions will not strike your eligibility and will not be held against you. 

It is NOT impossible to get a mortgage if you’re self-employed. Many people think if you’re self employed it is challenging to get a mortgage and a home. Being self-employed does not exclude you from being approved from getting …

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When Do I Know If I’m Ready to Own a Home?

The decision to become a homeowner is a significant milestone in one’s life. It represents a step towards financial stability, independence, and the opportunity to create a place of your own. However, before taking the plunge into homeownership, it’s essential to assess your readiness. Let’s explore key indicators that can help you determine when you’re ready to own a home.

Financial Stability

Financial stability is a crucial factor to consider when contemplating homeownership. Evaluate your current financial situation by assessing your income, expenses, and debt obligations. Consider factors such as job security, income growth potential, and the stability of your financial foundation. Ensure you have a reliable source of income to cover mortgage payments, property taxes, insurance, and maintenance costs. Building an emergency fund for unexpected expenses is also vital. Having a stable financial position gives you confidence in your ability to meet the financial responsibilities that come with owning a home.

Debt and Credit Management

Assess your debt and credit situation to gauge your readiness for homeownership. Lenders typically consider your credit score and debt-to-income ratio when determining loan …

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Obtain a loan of up to 4x your income

The European Central Bank set a ceiling in 2015, allowing borrowers to take out loans from lenders who wish to lend them up to 3.5x their income. However, the ECB recently declared that as a borrower, you may request 4x your income. The loan-value caps will remain the same as before the change, so first-time buyers will be able to borrow 90% of the property’s value, while second-time buyers will be able to borrow 80% of the property’s value.

One unique suggestion received by the ECB was that borrowers earning less than €60,000 be able to obtain a loan of up to 4.5x their income. After the rate crash, the mainstream banks removed development lending. Thus, smaller builders needed alternative finance providers to realize some projects because the extent of the limits was affecting them. Clients now have their own criteria for obtaining a mortgage due to domestic inflation (which was 8.6 percent in September), rising cost-of-living crises, and rising interest rates on loans.

ICS Mortgages, a non-bank lender, tightens its loan acceptance criteria. So, if you take a loan …

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What you need to know about ECB’s raising interest rates

The European Central Bank raised interest charges more than what they initially announced. Over the past few months, the rates have increased by around 1.25%. The clients have not yet been reached by institutions including Bank of Ireland and Permanent TSB.

Customers have a lot of pain for the future because there are a lot of uncertainties. They now have to deal with high mortgage interest rates in addition to inflation, rising electricity and fuel costs. New customers face a direct problem because their five-year fixed rates increase by 2%. As a first-time buyer, you will receive a rate of 5.95%. Long-term fixed loans rise by 1.49% to 1.58%. (depending on size and running time). As a result, banks such as AIB, ESB, and Haven must raise their rates for new and switching customers. The current customers are not affected. Customers with tracker mortgages face an increase in interest rates due to contractual obligations. Some of the new customers must take an expensive rate, which means they must pay 240€ more than before the ECB increase.

If the AIB, EBS, …

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Increasing rates across the continent

According to a recent poll, Ireland’s average mortgage rate is 2.64%. This is only 0.01% higher than it was the previous month, when it was 2.63%.

Irish rates have decreased as the economies of the rest of Europe have gotten more expensive. With the release of these new figures, Ireland actually dropped out of the top five most costly Eurozone nations for the first time in five years.

Ireland’s rate of 3.10 per cent, is higher than the average rate of 2.21 per cent in the Eurozone. Still, Ireland’s rate is lower than it was a year ago: 5.95 per cent this time last year.

The average interest rate on Irish fixed-rate mortgages is 2.49 percent and 3.77 percent on an Irish variable-rate mortgage.

Ireland now has the Eurozone’s eighth-highest mortgage rates, trailing only Germany and the Netherlands. Households in these countries, on the other hand, tend to take out much longer-term fixed rates than Irish households (up to 20 years or more), which typically have higher rates.

The average interest rate across the continent is increasing. Latvia has the …

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Are Irish banks the most generous in Europe?

Mortgage rates are rising, but at the time of writing they are higher in Germany than in Ireland, that isn’t the strange bit though.

What’s really strange is that the risk free rate in Ireland is higher than the mortgage rates available. In other words, financially speaking it is safer (if by ‘safe’ you mean accepting a lower return) to lend to a person in Ireland on a house than it is to lend to the Irish government. This is insane and it won’t last.

The response will need to be one of two things.

Banks stop lending Banks raise mortgage rates (or perhaps a little of 1 and a good dash of 2).

Take a look at government bond yields from last week, if a bank has a choice they can lend to the Irish government at 2.8% but they lend to people at closer to 2%. This is typically seen as an impossibility in financial markets so it will only last for a short time because as a rule there is no arbitrage, markets close them down …

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How to get a mortgage Ireland

There are many factors which play a huge role in your mortgage deal. Before starting to look for a house you should check with the lenders to get a statement of how much they are able to lend you. So you will know in what price range to look for a house.

The factors are: Your credit score – past payment history and borrowing behaviour [the higher score the better. The lower credit score you have the more you overpay.] Your debts – the less debts you have the better. If you owe too much, you will have to take out smaller mortgage or pay off your debt before you apply for a mortgage. Your work history – To get a mortgage you have to provide a proof that you are employed and have steady income and job [switching jobs all the time is not a great look for lenders]. Your down payment – The lender usually wants you to put money down so they have some sort of protection. Ideally 20% of the cost of your home [so you …

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