Getting a Mortgage in Ireland Ep 1: Are You Eligible for a Mortgage?

Getting a Mortgage in Ireland Ep 1: Are You Eligible for a Mortgage?

I'm delighted to be joined by Dave curry of the Irish mortgage corporation today we're gonna be asking the question are you eligible for a mortgage well Dave if I'm looking to get a mortgage what are the first things I need to consider well the first things the bank thinks about would be things like your age and the number of people in your households and the most important starting point after that is your employment and income okay and how much should I be earning before I start even thinking about getting a mortgage well the banks have what they call a minimum disposable income requirement and that depends on how many people are involved in the application or in the household so for a single person typically the banks will want to see that you have a minimum income leftover after your proposed mortgage payment repayment of around 1300 to 1400 euros per month okay and is there any type of income that the bank doesn't consider to be valid income in this regard the banks will only take into account taxable income earned income that there's a tax liability on so an income from employment naturally enough is the main one and also maybe rental income if you have a rental property or other forms of what some people might consider income would not be factored into a mortgage application okay and one of the things like commission and bonus because a lot of people will be quite reliant in those for their overall income in a year yes the banks will take into account a certain amount of commissions and bonuses but only if they can be proven to have been received in the past typically they'll take about 25% to 50% of those into account okay so now that the bank is how to look at my income and my taxable income I presume the one will have a look at my spending habits too they will and also your financial commitment so for example if you have any loans they'll they'll look at those or if somebody has maintenance payments to a former spouse etc and but yes they will look at your spending habits and what they are most interested in is what they call repayment capacity so they want to see that you have been living as if you have your new mortgage in the periods in the run-up before your mortgage application okay so once the base of looks at all this maybe they're satisfied with what my repayment capacity is well they also look at things like my work status like if I'm in full-time or part-time or even if I'm self-employed yes that's hugely important so for PA ye employed people the first thing is that banks usually want people to be in employment for at least 12 months or in continuous employment for at least 12 months if they've moved jobs if you're in PA ye employment they want you to be past your probation period and and then if you're on contract it's a little bit more difficult but it is possible to get a mortgage while on contract in PA ye employment okay unless with a self-employed for self-employed people it's a lot more difficult and it takes a long time to build up the track record of earnings to prove to the banks that the self-employed person has sustained or sustainable earnings usually a minimum of two to three years of annual tax returns to show one's earnings okay so now we've had a look at my repayment capacity just say the banks was satisfied with that they haven't found any alarming spending habits that say where does the deposit commit what are they going to want to see there well yes you're going to need to have a minimum of a 10% deposit for the property and if you're a first-time buyer let's say you're buying for two hundred thousand you're going to have to want to have a deposit of twenty thousand at a minimum for non first-time buyers that deposit requirement could be twenty percent or forty thousand and the banks most of them will look will want to see that you've saved some or all of that deposit yourself okay so we've covered deposits we've covered repayment capacity do you think all of this information is going to scare some people off going and looking for a mortgage there well hopefully not hopefully it'll give them a good information to be able to decide whether they might be in a position to make an application now or whether they might have to wait a little bit of time to get past probation for example or two and you know finish off paying a loan or that kind of thing okay and do have any words of encouragement for someone who's maybe looking to get get a mortgage to have a long to wait before they have to get their application together well I would say that the banks look at at least six months of an applicant's financial history when assessing a mortgage application so and that would be the minimum kind of preparation time for an application okay and that's we're actually going to be discussing in our next mortgage video the reasons why the next six months are so vital if you're looking to apply for a mortgage Dave thank you so much for sitting under the sacrum you very much thank you for watching hope you found that video helpful to watch more videos in our how to get a mortgage in Ireland series just click this link there are seven videos in this series which covers the entire mortgage application process right up until the moment with the keys in the door of your new home

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