The Key to a Successful Mortgage Application Process – Free Guide
Are you ‘good’ for a loan? Your employment status, income, credit record, bank account conduct & more…
For PAYE Applicants
- Permanent (At least 6 months continuous employment)
- if in new employment probation period must be completed before drawdown
- Fixed term contracts will be considered on an individual basis.
- Salary should be mandated into your bank account.
- Evidence of Work permit/Visa if required.
For Self-employed Applicants
- 2 years’ accounts
- 2 years’ revenue returns
- 6 months recent business bank statements
- Tax clearance cert
Income Considerations;
- Basic Per annum
- Breakdown of Overtime /Bonus Shift Allowance pa.
- Salary Mandated e.g. weekly. Biweekly or monthly
(All of this will be detailed in a Salary Cert which your employer will be required to complete)
Credit Record
If you have any concerns about previous credit agreements or a history of missed repayments. You can request a report from the Central Banks Central Credit Register|Central Credit Register or Irish Credit Bureau www.icb.ie. If there is an issue the lender will want a comprehensive explanation upfront before they will consider.
Financial Expenses
Lenders will look at any other financial commitments you may have such as childcare costs, Maintenance/ support payments if applicable.
Outstanding Debt
- Revolving Credit Facilities – CC / Bank Overdraft – Limits, Min Payments per month.
- Existing Personal Loans, Car Finance – Payments per month, Term remaining, Bal outstanding.
- Existing Mortgage /Buy to Let property – Balance Outstanding, Term, Repayment & Current Rate
Bank Account Conduct Checklist
- Have you had account payments reversed?
- Does your bank charge fees for dishonoured payments?
- Does your Credit card go over its limit?
- Do you pay bills late?
- Have you ever been charged an unauthorised overdraft fee?
Repayment Capacity
A lender will look for evidence that a mortgage applicant can meet their future mortgage repayments. Lending institutions will also stress test repayments to ensure any future interest rate increases can be tolerated by the applicants. Repayment capacity is normally taken over a 6 month period. For each month, an applicant will need to demonstrate you are putting away a consistent sum of money such as rent or savings which would equal or exceed any proposed mortgage repayment.
Balance of Funds
Deposit Means – Breakdown of Savings, Parental Gift, HTB, or sale proceeds from another property.
Ancillary Costs – Stamp Duty, Valuation, Structural Survey & Legal Fees
Rent – Where rent paid in not evident in current accounts or is paid in cash, we will require a copy of a lease or rental agreement to validate the payments.
If Separated/Divorced – Where you are separated or divorced, we will seek a copy of the separation agreement.
Work leave – If an applicant is currently on leave from work, eg Maternity Leave, this will necessitate a letter from your employer outlining the return date and also confirming the same terms and conditions of employment as before.
Foreign Residency – Where an applicant has resided abroad within the last 3 years, or operates a bank account outside Ireland, the lender may require a foreign credit check from the country concerned.
Mortgage Application Checklist
Forms
- Application Form Completed and signed by all applicants. (Declaration, Authorisations & consents)
- Salary Certificate completed & stamped by employer.
- Gift Letter completed by Donor and Recipients (If Applicable & Lender Specific)
Employment Payslips / P60 etc
- Employment Detail Summary (Previously Known as P60) for previous year.
- 3 months most recent payslips for each applicant.
Bank Statements
- 6 Months most recent current account statements for all applicants (stats must show your name and address). This requirement will also extend to Revolut and N26 Mobile bank accounts.
- 3 months most recent Credit Card statements.
- 12 month Mortgage and Loan statement (If applicable).
Identification
- Certified Photocopy of Passport or Driving Licence for all applicants.
- Original Bank statement or Utility Bill for all applicants dated within the last 3 months
Proof of your deposit
- 6 months Saving statements to demonstrate build-up of savings.
- Evidence of Share Certs etc.
- Evidence of Help To Buy scheme (if applicable). You can apply for this through the revenue website
Approval in Principle
An Approval in principle will be issued by the bank when they are happy to lend to you. A lender may require some further clarifications which is normal practice. Once these are addressed, a decision can be made.
Mortgage Approval, known as AIP is not a formal loan offer. This will be determined at a later point by a specified Property, Rate & Term etc. A formal loan offer is customised to the client’s exact specification
Loan Offer
Once you have chosen a property and have paid a booking Deposit, we begin working on what items, if any are required to progress from AIP to Loan offer. These items are detailed on the AIP.
A valuation will be required and instructed for the chosen property to progress to loan offer. All lenders will have their own panel of valuers and we will issue the valuation instruction. The cost of the valuation is approx €150 payable by you directly to the auctioneer.
A solicitor will also be required at this point. On receipt of the valuation report, a formal letter of loan offer will issue to you and your solicitor. A solicitor will review the legal contents of the loan offer and advise in this regard.
At this point the seller’s solicitor will also issue a contract for the sale of the property to your solicitor. You will attend the solicitor’s office to sign the letter of offer and the purchase contracts. Contracts are returned to the seller and a closing date is agreed.
Closing
All formal loan offer will specify a number of standard and specific conditions that will need to be addressed and satisfied prior to cheque issue.
Standard loan offer conditions will include items such as mortgage protection (life cover), Home Insurance & Direct Debit mandate completion.
Specific conditions may relate to Balance of Funds, proof of end of probation period etc
A few days prior to closure the solicitor will request funds from the lender and on the specified closing date, the purchase process will be completed on your behalf.
We have helped many happy clients to secure their optimal property finance deal.
