There comes a point in adulthood where the recurring nightmares of your youth (your teeth falling out; having to re-sit your Leaving and failing terribly; asking a young one out and being shot down with a look that still haunts you) fade away for something a bit more grown up.
It’ll happen all of a sudden. You’ll be having a class sleep (a rare thing in and of itself, between kids and work and all the rest) only to wake up in a pool of sweat, heart hammering, because you dreamed that you fecked up the paperwork on the mortgage application or that someone outbid you on your dream gaff.
No more cheese for you before bed, TYVM.
With the exception of welcoming little people into this world, there’s little scarier and more permanent-feeling than buying a house.
It’s no wonder you’ll be waking up in cold sweats about your mortgage, so today I’m looking at how to make your mortgage application as stress-free as possible.
I’m not a mortgage advisor but 1) I have a mortgage and 2) I’m a broker who helps clients get good deals on Mortgage Protection, so I’ve picked up a few tricks over the years about speeding up your application.
I talk to a lot of people who are looking into getting a mortgage and they use a mortgage calculator and presume they’re all set.
That’s grand, but when you’re doing the sums you need to account for an extra few percent on top in case the interest rates go up.
The lenders all require a fairly similar list of documents.
Employed people will need a signed and stamped salary certification, a P60, three payslips, and up-to-date, bank account statements for three months.
Self-employed people (*hat tip*) need their most recent Audited/Certified Accounts; three months’ personal and business statements; confirmation from their accountant that their tax affairs are up to date, details on their earnings, and confirmation that no big changes have recently occurred on their account.
That list is from PTSB, so make sure you check with your own lender. Get your documents together and have them ready to go before your meeting. Your P60 in particular can take a while, so give yourself a few weeks.
An overdraft or credit card is tempting, especially when you’re squeezed. It’s like free money. Except no money is ever free and it all comes with interest rates and possibly massive big lads knocking on your door for three months, shouting at you about owing them money.
Don’t borrow from loan sharks, kids.
And yes, you can get a mortgage if you have a loan or a credit card, but the repayments will be factored into what you can potentially pay back. However, if you have any missed payments or referral fees, you’ll raise a big red flag with the lender.
One last tip on this point: you may have missed payments yearrrrrssss ago and you might think they’ll slip right by, but they may have affected your credit rating and that’s a whopping no-no for banks. If you’re not sure, you can order your credit report from the Irish Credit Bureau.
Don’t try and be smart here either. Banks and lenders send info about borrowers to a central database that’s operated by a credit reference agency or register, so they’ll find out.
Yes, it’s all very 1984, I know.
I know I just said that having an overdraft, credit cards, or loans isn’t the end of the world your mortgage application (it isn’t), but paying them off will work in your favour as lenders will see that you’re reliable and can budget to clear your debts.
You’re a strong independent (wo)man who don’t need no loans. Except for the ginormous one you’re trying to get off your bank.
The hardest part about saving for a mortgage is the deposit, but a lot of people dive into the process before they fully get how it works.
Most lenders will need you to show a Proven Repayment Ability of at least 85 percent of the mortgage repayment for the previous month.
So while you may be asked to bring bank statements in for a few months, you’ll need to keep your account in good order a bit longer than that. You don’t want to go to all the effort of starting to save and looking at houses only to be knocked back because you haven’t allowed enough time to show your repayment ability.
Another handy tip is to label your payments in a way that makes sense to the lender. You might never have labelled anything before, but now is a good time to start. As well as that, if you pay your rent cash in hand, tell your landlord you’re going to start paying them by bank transfer or online so that there’s a paper trail, otherwise your lender will start asking questions.
Finally, if you like the occasional flutter, make sure you use cash. Lenders are zero craic; a tenner on the Grand National and they think you have a gambling problem.
Getting a mortgage is never really just about the mortgage; there’s a rake of other stuff you need to worry about too: stamp duty, legal fees, surveyors – all that good stuff.
Another consideration is Mortgage Protection, a type of insurance that pays off your mortgage to the bank if you die while you’re covered.
You have to get it, but don’t leave it to the wire, especially if you have a health condition. You don’t want to go through the whole rigmarole of applying for a mortgage only to have it all terminated because your application for Mortgage Protection was declined.
Instead, get a broker (hi!) to sort it for you. You can get your quote here or give me a call on 057 93 20836 if you think your case might not be so cut and dry.
Quick tip for you: drop your application into the letterbox at the local office. It’ll be considered internal mail so will land on their desk faster than if you post it to the office.
Just don’t find their home address and post it there. That’s stalking.
Complete this short questionnaire and I’ll arrange your cover for you; it’ll be quicker and easier than doing it yourself.
If you have a couple of questions you’d like me to answer first, call me on 05793 20836 for a quick chinwag.
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