Loan / mortgage query:

mkdon

Loan / mortgage query:
 
Need a loan of approx. 75k euros say for instant?
 
Regarding getting a loan in Ireland that could go towards a property what is the max loan one could get? 50,000 euros to be paid back in 5 years is it?
 
Also mortgage is ballpark 3.5 times annual salary before tax right?
 
Also what are the requirements for a short term loan v a mortgage?
 
Anyone know about pros and cons?
 
I presume for instance short term loan quicker to get and easier than a mortgage?
 
Can one get a loan or a mortgage with a contract work or must their work be permanent??
 
Also regarding rates. The rates for a mortgage are better and lower right?
 

Thanks and kind regards,

LirW

We had a very similar scenario, I'll just tell you what I know:

1) Depends on where you get your loan from, it's usually somewhere between 40-50k on 10 years.

2) Yes, 3,5 gross annual salary is the maximum a bank can lend you unless you qualify for an exemption (which would be high income couples with a substantial deposit). From the max there will be deductions if you have dependants like children. The general rule of thumb is as a single applicant you need a minimum salary of 35k/pa as single applicant or 45k/pa as a couple.

3) A mortgage application is a process with lots of paperwork involved. You need to show secure employment, a steady savings history of at least 6 months and if you have any other debt, that'll be taken into account. If you have any doubts, talk to a broker.
A shortterm personal loan doesn't have this intense screening, even though they will check certain things. With a mortgage you're securing an asset against a big loan while that's not the case with a short term loan.

4) The big con is the interest rate for a personal loan. They are expensive and you're going to pay at least 8% interest. On the other hand if you wanna clear earlier you can do that with most banks without any penalties, which you'd have with a fixed rate mortgage if you wanna overpay.
Banks are hesitant to give out very small mortgages because they aren't making any profit on them really. But it depends on the area really. If you're looking at a very rural area where prices are pretty low, local banks offer deals to cater for the regional market.

5) You'll very likely get a loan quicker and faster.

6) When you apply for a mortgage and you have no certainty of employment after the contract is over, you might have trouble proceeding in the process. If you're a contractor with a history of work, for example your contract got renewed every year for the past few years, show them the proof and it shouldn't be a problem.
There are banks that cater better for contractors and self-employed than others. Again, if your application might not be that straight forward, talk to a broker.

7) Yes, mortgages have a variety of rates and they are significantly less than personal loans, which are almost always fixed and quite high. But then again small mortgages are a pain to get.

jlm29

Mortgage interest rates are less than 3% at the moment. Personal loan interest rates are between 8 and 9 % I think?
It’s not an awful ordeal to get a small mortgage, at least in my (recent) experience