First Time Buyers 101: What You Need To Know When Applying For A Mortgage
Where to start and how to begin.
Unless you’re a bonafide mortgage expert, the thought of even beginning to get mortgage ready can be pretty daunting. There’s so much to think of, even before you decide it’s time to head to the bank and apply. What do you need to have ready? How much money should you have? What unexpected costs can crop up?
Yep, plenty of questions – before legal jargon is thrown on top of it too.
So, if you are hoping to take the first step in your mortgage application anytime soon, we caught up with Senior Mortgage Manager, Eimear Shannon aka @missmortgages, to iron out the finer details.
Where’s the best place to start when applying for a mortgage?
“The best place to start is trying to get in touch with someone early, so a mortgage advisor or broker, to find out exactly what you need to be doing. For a lot of people, when it comes to applying they’re thinking that they’ve done the right things and haven’t done so, so it’s good to be preemptive, start early and find out what you need to do. It is a good idea to reach out at least six months just to make sure you’re doing the right things, so that when you do go to apply you’re going to check all the boxes.”
Continuing, Eimear shared: “You need to figure out your budget, so know your max limit of what you can afford to repay and each of the repayments. So, one, what’s the maximum range you can borrow, and two, what’s the maximum range you will be comfortable with repaying each month.
“This is a good one to think of because a lot of people don’t look at it that way, they always look at what’s the max that can be received, when really you should be looking at what would you be comfortable with borrowing so you can still live your life. You then also need to prove or demonstrate you can afford to repay the mortgage so saving regular amounts each month or paying rent.”
As well as saving for your deposit, what other costs should be taken into account?
“You’d have to pay stamp duty on the property, that’s usually 1% of the property value. There’s then solicitor fees, which can vary depending on where you go to, who you’re dealing with etc. There’s your evaluation fee, which is around €200 but can also vary. If you’re getting a second-hand property it would be recommended that you get a structural review which can usually be €500/600, you then might also have a broker fee if you’re using a broker or not.
“Other things to take into consideration are your home and life insurance, they’re not going to be a one-off payment but they will have to be taken into consideration that it’s not just your mortgage repayments you’re going to have to pay in the future.”
What needs to be taken into account if you work freelance?
“For those who are freelance, you need to be able to show two to three years of accounts. But if you’re doing extra work on the side, it may not be taken into account towards your mortgage application at all. It has to be consistent, and you’d have to show two to three years of accounts with it again.
“In general, the best thing you can do is to really do your homework, make sure you do plenty of research. Start early, know exactly what you need to do and particularly in the six months before your application make sure you’re living within your means and not overspending.”
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