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Which comes first?....
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25-05-2010 2:25pm#1
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Sorry, another question... Are your savings taken into account when applying for a mortgage or is it simple based on your income
Savings will be taken into account, especially since you will need at least 8% of the purchase price saved as a deposit, plus solicitors fees.I was looking at fairly cheap houses
No such thing yet
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Savings will be taken into account, especially since you will need at least 8% of the purchase price saved as a deposit, plus solicitors fees.
No such thing yet
Well.... Cheaper.... Everything i look up on the net says it is basically 3-4 times your salary you're allowed borrow. Which isn't very much. But working it out myself, i have the 8% deposit, i have enough for the legal fees and the repayments shouldn't be much more than the rent. But i'm not sure the bank will agree with me.0 -
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The rent i pay. I did the mortgage calculator thing on the aib website and the monthly repayments are similar to the monthly rent i pay.
Hey Phi,
Just remember to also add in the variety of charges that comes with ownership in comparison to renting when you are doing your math.
Council charges, water (future), waste etc./Management fees
Insurances
Repairs - Paintwork etc
Boiler/Heating servicing
Upkeep equipment - Lawnmowers etc
When you add all that in it may seem more appealing to stay renting to a bit longer
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OP some banks arent really open for mortgage business at the moment.
You say you have 8% deposit saved which pretty much means that you require a 92% mortgage...so you are largely talking about one of two lenders who offer this.
The bank will make their decision based on:
Evidence of your ability to repay (E.g monthly rent you have been paying, combined with any regular savings). They stress test every application. Although interest rates are around the 3% mark now...they wont always be so the bank will assess what your repayment would be at 5/6/7% and see if you still meet their criteria.
Your employment sector.
The lender is unlikely to approve an application if you work in an industry which is particularly volitile at the moment (which isnt?
)
Income multiples and net affordability
Most lenders will apply one or the other (or sometimes both) when calculating what you can afford. Income multiple is usually 3-4 times your salary and net affordability is a percentage of your take home pay (e.g the lender will allow 30% - 40% of your take home pay to be used as monthly mortgage payment.
Track record
If you have had any loans in the past (or missed payments) this will be taken into consideration.
With regard to your question about fixed rate...yes, if you opt for a fixed rate for 3 years, your rate will not change for 3 years. At the end of the 3 years the bank will give you the option of fixing again or taking their variable rate.
My advice...take your time out there. Its a buyers market and once you have loan approval, use it to your advantage. Make a cheeky offer on property with the promise that as a first time buyer you can move quickly (and not caught up in a chain of selling a property yourself).
I am a financial adviser and work with lenders on a daily basis. If you have any further questions...I'll do my best to answer.
Best of luck,
Sean0 -
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