Applying for a mortgage is much more difficult than it was in the past. Before a lender will approve your mortgage application, you have to satisfy a number of conditions first.
Underwriters want to see that you have the capacity to meet the stressed monthly repayments. This rate is usually 2% over the variable rate but differs between lenders.
They will look at your current account to make sure there is no irregular spending patterns and you are living within your means. Repayment capacity can be satisfied in a number of ways:
- Existing mortgage repayments
- Regular savings
- Discontinuing other loans or outgoings
Net Disposable Income
After the stressed monthly repayment is paid, you have to have a minimum disposable net income to live on. Again, this varies so the following is just an example
- Single Applicant €1,300 per month
- Joint Applicants €2,050 per month
- Additional for each child €250 per month
Lenders will typically lend 90% – 92% of the purchase price. They will request proof that you have the deposit amount as well as the funds required for whatever fees are required e.g. solicitor and surveyor fees.
If the deposit amount is being gifted to you, they want proof that the funds are available and in some cases will request the person gifting the money signs a declaration stating they will not look for the money back.
The gathering of documentation can take a while but it is all required before you can submit your mortgage application.
- P60, last 3 months payslips & Salary Certificate
- If self employed, 2/3 years audited accounts and Notice of Assessment as well as business current account statements
- 6 months credit card statements
- 12 months savings statements
- 12 months current account statements
- 12 months mortgage statements
- 12 months loan statements
- Photo id and proof of address