Buying a new property is one of the biggest and best investments you can have in your life. There is a lot that goes into it before you even visit your local real estate agency. You need to first arrange sufficient finances for the mortgage deposit.
So, you should first ask yourself a few questions before you even consider looking at some properties.
- Is my income enough for me to apply for a mortgage?
- How much mortgage can I apply for with this income?
- How much mortgage deposit can I afford?
The best way to find the correct answers is to get the help of a mortgage broker. Since these are critical questions and the answers to these will be the deciding factors to your dream of buying your first home, it is recommended to hire the services of one of these mortgage professionals. They will not only help you with finding the best deals for a mortgage in Ireland but will also clearly tell you what is affordable as per your financial records, how much deposit can you make initially, the duration of the mortgage, what will be the monthly instalment towards your mortgage and so on.
What to expect when you apply for a Mortgage?
There are several different elements that will be the deciding factors in the amount you will be able to borrow for a mortgage. Your annual income, your monthly expenses, other loans, or financial obligations are some of the most important ones.
Fortunately, the lending criteria set out by Central Bank of Ireland is a little bit more relaxed now compared to their stricter rules a few years ago, but for first-time buyers, a set of general rules do still apply. If they are looking for a mortgage against a principal residence, then they will be allowed to borrow an amount, not over 90% of the total property value. However, this amount cannot exceed 3.5 times their gross annual income.
So, as outlined by Central Bank of Ireland, the mortgage deposit can be expected to be a minimum of 10% of the total house value.
On the other hand, in 5% of the cases, lenders can exceed 90% of the loan to value limit. This can happen only at the discretion of the lender and under particular circumstances. If you are in this situation and are looking to apply for a mortgage and borrow more than 90% of the property´s value, you should talk to a mortgage broker, who will more likely be able to secure this type of deal than if you would apply for yourself.
The Benefits of Using a Mortgage Broker
While one may be tempted to apply for a mortgage by themselves based on all the online calculators and articles available, you shouldn´t apply for a mortgage individually, especially as a first-time buyer. A mortgage broker can help you calculate precisely how much you can afford, as well as with their skills and connections with lenders they can get you the best possible deal, saving you this way a lot of money in the long run.