Tips To Being Mortgage Ready
It goes without saying that you should have secure employment and preferably in a sector that is relatively safe from the effects of recession. Full-time permanent positions are ideal. In certain circumstances, a long-term contract will be acceptable (with a state agency, for example). Lenders will look more favourably on you if you have held the position for at least a year.
Show evidence of
regular savings. Even if you are receiving a gift to help you make up the deposit, lenders like to see you have the discipline (and the disposable income) to save regularly. They like to see at least 50% of your deposit made up of your own savings. Lenders will assess your repayment capacity based on your ability to make regular rent payments, or, if this is not your first property,
mortgage payments. Your current account should be in good shape. It’s OK to have an overdraft facility but ideally you will not be using it! Lenders look closely at how you spend your money so think about how your spending might come across and adjust your habits accordingly – don’t blow your wages on pay-day, for example, and cut down on that on-line gambling!
Lenders want to see a clean credit history. Even where you are up to date on your repayments, it is best not to have a high level of personal borrowing. If you have short-term loans (a car loan for example, or credit card balance) try to pay them off before
applying for a mortgage.
In 2015, the Central Bank of Ireland Introduced new rules for lending for the purposes of buying a principal dwelling and these include a rule that they can lend a maximum of 3.5 times your annual gross income. This rule doesn’t apply to