MORTGAGES & CREDIT RATINGS
BOI, KBC, AIB, PERMANENT TSB
Below we have listed some of the many questions that banks and other mortgage lenders will ask you when determining whether or not to grant your
house mortgage application.
The better you are able to answer these questions, the more chance you have of getting a mortgage
and owning your own property.
Obviously, mortgages, large house deposits and
jobs are currently hard to get.
But if you really want a house or apartment of your own in the future, now is the time to think ahead and to put yourself in the best position to obtain a home mortgage when the economy improves, not only in general terms, but for you in particular.
Are Your Income and Expenditure Claims Realistic?
Do your homework before meeting with the bank or mortgage lender regarding how much monthly income you expect to receive in the future. If you intend to rent out a room in your new house, make sure you know what the current monthly rent is in your area. How much will you need to spend in order to make the house or room rentable? First time buyers are allowed to receive a maximum of 10,000 euros per year tax-free as income from renting out a room.
Can You Manage Money?
Nowadays the banks will want to know that you are a trustworthy person to loan money to. Keeping good records of your rent as well as your other major repayments such as car loans will reassure the bank that you can manage money.
Do You Need Money For Other Payments?
In the past the banks were happy to lend money for the fitting out of a house, as well as the mortgage needed to buy it. Today, if you are lucky enough to obtain mortgage approval, the banks will try to reduce the amount loaned to you as much aspossible. It will help your mortgage application if you have no other major repayments to make, so defer any ideas you have about a new car or other big spend until after you receive your mortgage.
Do You Smoke?
Non smokers can make significant savings on the life assurance cover that will be needed in association with your mortgage.
Have You A Bad or Inaccurate Credit Rating?
Bad credit ratings can happen to good people. It may be due to an unpaid or lost bill, whilst it can also be due to inaccuracies in the credit report itself. It is better to find out your credit rating yourself, rather than waiting for a lender to inform you of your credit rating. This will give you an opportunity to address any inaccuracies and perhaps settle any outstanding debts. The more ''blemishes'' you have on your credit report, the more likely it is that your lender will charge you a higher interest rate to protect themselves against a potentially bad loan.
Do You Expect Higher Interest Rates?
Are you assuming that you can repay your mortgage on the basis of current interest rates or have you calculated what it would cost based on interest rates that are two, three or four percent higher than current rates? Ask yourself if you could afford to pay a higher monthly payment without infringing on other payment commitments you may have.
Please remember that the mortgage calculator should only be taken as an approximate guide, and may vary from the actual figures quoted by mortgage lenders.
This article is only intended as a basic general summary and you should always seek professional advice where necessary.