Switching lenders

how.gareth

Hi I’m just looking for some info on trying to switch mortgage lenders, do I need to get the property valued first myself to make sure I have enough equity? Are the bank as strict regarding income and savings as they would be with a first time buyer?

Q&A

how.gareth wrote: »

Hi I’m just looking for some info on trying to switch mortgage lenders, do I need to get the property valued first myself to make sure I have enough equity? Are the bank as strict regarding income and savings as they would be with a first time buyer?

First step is borrower assessment. They will assess your finances first. You should be able to show you can afford your repayments at current rates plus 2% in stress scenario. Obviously making current repayments are a good start. Savings can take the form of overpayments.

If the bank is happy with all that then you move to collateral assessment. Basically you'll have someone walk around your house estimate rebuild cost and also is current market value. You can make a stab at the latter by seeing what similar properties nearby have sold for (that's part of what they do). Depending on which bank you're considering moving to they may cover the cost or you might have to pay for it. Think its in and around €150.

how.gareth

Q&A wrote: »

First step is borrower assessment. They will assess your finances first. You should be able to show you can afford your repayments at current rates plus 2% in stress scenario. Obviously making current repayments are a good start. Savings can take the form of overpayments.

If the bank is happy with all that then you move to collateral assessment. Basically you'll have someone walk around your house estimate rebuild cost and also is current market value. You can make a stab at the latter by seeing what similar properties nearby have sold for (that's part of what they do). Depending on which bank you're considering moving to they may cover the cost or you might have to pay for it. Think its in and around €150.

Thanks for that, I’m with a sub prime crowd since 2008 and paying nearly 5% without ever missing a payment so if I switched to a new lender who was offering 3% would that difference cover the stress test?

mugsymugsy

how.gareth wrote: »

Thanks for that, I’m with a sub prime crowd since 2008 and paying nearly 5% without ever missing a payment so if I switched to a new lender who was offering 3% would that difference cover the stress test?

In theory you will go to bank and say I want a mortgage for x which is on a property worth y over a number of years (depending on your age how long they give). The loan to value ratio might determine what rate they give you and thus calculate what your monthly repayments they will then stress test this by + 2%.

The bank will look at your income and ecide whether you fit their criteria. If you do then you might need to pay for a valuation (depending on bank)

Ensure you have your bank statements ready and preferably tidy in terms of no spending on gambling etc

Oh and best of luck

how.gareth

mugsymugsy wrote: »

In theory you will go to bank and say I want a mortgage for x which is on a property worth y over a number of years (depending on your age how long they give). The loan to value ratio might determine what rate they give you and thus calculate what your monthly repayments they will then stress test this by + 2%.

The bank will look at your income and ecide whether you fit their criteria. If you do then you might need to pay for a valuation (depending on bank)

Ensure you have your bank statements ready and preferably tidy in terms of no spending on gambling etc

Oh and best of luck

Excellent thanks a lot