- Understand the Central Bank’s rules – The Central Bank regulates how much you can borrow and how much the banks can lend. If the mortgage you are looking to buy is out of the banks’ lending range, it might not make sense to even show up. Current rules are that borrowers can take on a mortgage 3.5 times their (and their spouse’s) income level. First time buyers need a 10% deposit and people looking to refinance their house need 20% deposit.
- Exemptions are Rare – In 2018, 1 in 5 got an exemption – meaning they could borrow up to 4.5 times their income level or could have a deposit less than 10/20%. The Central Bank’s rules have only become more strict since then.
- Neaten up Current Account’s Balance – If you can get rid of dispensable credit card charges, a deficit in an account and/or other expendable charges, you may be able to alleviate the possibility of having the mortgage accepted and/or reduce the amount you have to pay.
- “Help to Buy” Helps – The Help to Buy program aids first time buyers by mitigating their deposit. Help to Buy does this by giving first time buyers tax rebates. This allows a person to make a deposit as little as 5%.
- Reapplying For a Mortgage – Most banks require you close the deal within 6 months. If you have trouble pinpointing the property you desire, you may have to reapply. Reapplying may require you to pay even more than before.
- Mortgage Deliveries – Bank are increasingly sending consultants to potential buyers that do not have time to meet with banks. Last year, 25% of Bank of Ireland’s mortgages were delivered to customers, indicating an expanding market.
- Banks like people with steady jobs – This means people who are self-employed might have more difficulty winning their trust over to the banks. For the most part, this does not apply for anybody working for a company as a lawyer, bookkeeper, etc.
- Working Abroad is Difficult – Expect banks to require a down payment of at least 30% if you are working abroad. The banks second guess people who earn money in a foreign currency
Mortgages Ireland: All You Need to Know