Mortgage Process

Arun Thomas

Hi can someone explain the mortgage process .How long it takes and the documents that needed and whether they give just 3.5x of the Basic pay or will they take into consideration OT ,bonus or any other benefits

dennyk

You can usually get an Approval in Principle fairly quickly, which is what you'd need when you start bidding on a property to demonstrate that you have financing available. The AIP is usually just based on self-reported information, so it can be issued within days or sometimes even hours. The official letter of offer can take ages to issue, though, as it's dependent on other requirements that themselves may take time to obtain (e.g. valuation of the property, etc.). You won't be needing it until you actually have gone sale agreed on a place anyway, though.

For your own documents, you usually need the usual proof of ID and address, plus proof of income (usually a letter from your employer confirming your role, hire date, salary, etc. as well as some recent pay stubs), bank statements from all your bank accounts, details of your current rent payments, any other loans you have outstanding, and your P60s/Employment Detail Summaries from Revenue for the past few years. In some cases you might need additional documents, e.g. if you've lived overseas in the past several years then you might have to provide a credit report from your previous country of residence. Sometimes they'll ask you for credit card statements as well, if you have a credit card. On your bank statements, the bank likes to see a clear history of regular monthly savings, which, when combined with your monthly rent payments, significantly exceeds whatever your mortgage repayments would be. They don't like to see activity that indicates you might have financial issues that could affect your ability to make your repayments, such as a lack of regular saving, total monthly spending equal to or more than your income, regular payments that look like they might be repayments of some other debt or loan that you've failed to disclose, or significant gambling activity. They'll also need to see proof that you have the necessary cash for your full deposit and all the other up-front costs involved in purchasing a property.

If you've been gifted a large sum of money from a relative or friend as part of your deposit, they'll need that party to fill out an affidavit attesting that the money in question is a gift, no repayment is expected, and the gifting party is waiving any interest in the property being purchased.

For things like OT and bonuses which are not guaranteed income, the bank will sometimes give you "partial credit" for those payments if you can demonstrate that you receive them consistently. For example, if you can show via pay stubs and P60/EDS documents that you received an average of, say, €10,000 in such discretionary payments each year over the past few years, they might be willing to add a few thousand or so to your annual salary for the purpose of calculating your maximum borrowing limit. Other types of non-cash income such as benefits in kind will not be included, as you of course couldn't use such benefits to make your mortgage repayments.

Kurooi

How long it takes - if you're a first time buyer, have your deposit and the documents ready, and you're in capable hands (a broker) it can be just days. Failing any of those points, few weeks.

Documents required - Bank statements, including savings accounts and revolut , that cover past 6 months. IDs, payslips, salary certs (bank will give you a template, your employer fills it out. I advise to do these first and ahead of everything else because some HR departments can take long!) Over covid banks have also started to request a form from employer stating that they are not in receipt of COVID funds. Normally they request that after your mortgage is approved in principle but prior to draw down. I'm not sure whether that is still practice but you can expect some extra document requests there.All of this for both you and second applicant if there is one. Ofc the bank/broker will run you through lots of questions regarding personal details, your job, salary, expenses.

Also note, as you present your accounts you are expected to have the history of savings and a deposit saved up. First time buyer 10% of purchase price. Plus some spare for solicitors , tax and legal fees.

3.5 times rule - yes correct, it's based on gross annual salary, 3.5 times is the ceiling. you can try applying for a central bank LTI exemption (to take it up to 4.5 times, this is not guaranteed and mostly depends on how secure your job situation is)

And lastly bonus/OT - BIKs like healthcare are completely ignored. Cash like bonuses, OT, commission are also generally not taken into consideration, but you can try. The key is your salary cert, example below is Permanent TSB, if your employer ticks 'guaranteed' then that may get taken into consideration depending on the bank, but generally those are not guaranteed in which case they ignore the extra income. Bonuses likewise are usually at least somewhat tied to performance to employers don't like to state them as guaranteed

roger8900

I used to top up my wife’s Revolut card frequently three months ago. She closed her account. Now mortgage lender asking to submit six month statements but I have only three statements.

I have last three months statement without any Revolut activity.

anyone been in this situation ? Will they accept three months statements ?