The right preparation can significantly improve your chances of being approved for a mortgage. Here are 7 steps to help you prepare for a mortgage application.
If you’re a first time buyer, you’ll need to start saving for a deposit. If you own a home, you should find out how much equity the property has, and whether this is a big enough deposit.
Our guide: How do mortgage deposits in Ireland work? includes how much deposit you’ll need, and tips to reduce your spending.
If you need to save, you could set up a standing order for an affordable amount each month, and keep the money in a separate account so you’re not tempted to spend it.
Your credit record affects what you can borrow, so you should check your report before the lender does.
Here’s how to check your credit record for free and what it means.
If you’ve got arrears showing on your report, you may need to wait until your finances are more stable before taking on a big financial commitment like a mortgage.
Our guide: How to get a mortgage if you have bad credit, explains how a poor credit history can affect your mortgage application, and has tips on how to improve your credit rating.
Whether your credit report is good or bad, there are some dos and don’ts when it comes to applying for a mortgage:
*If you do change jobs and there’s a probation period, you may have to pass this before you can get a mortgage.
If you’re self employed, chase any outstanding invoices and keep your accounts up to date. Here’s how to get a mortgage if you’re self employed.
You’ll be required to produce bank statements and credit card statements for review. Keeping your general spending to a minimum will help increase your borrowing potential.
Understanding how much you could borrow can help you work out your budget to buy a property.
The Central Bank mortgage measures, set Loan to Value (LTV) and Loan to Income (LTI) limits for first time buyers, and those who already own a property.
Our how much you could borrow calculator works out the most you might be able to borrow and explains what affects this amount in more detail.
Don’t forget to factor in stamp duty and solicitors fees into your total costs.
If you need an extra helping hand to get on the property ladder, there are some government backed schemes that could help. Different initiatives offer different benefits, such as:
The Citizens Information website includes details of the current schemes available to first time buyers.
You’ll need to meet the eligibility criteria of a scheme to qualify.
There are a number of documents you’ll need to apply for a mortgage, these vary depending on the lender, and whether you’re:
Typically, you’ll need to provide:
Once you have most of your deposit saved, it’s time to find a mortgage deal. You can do this yourself, using our mortgage comparisons, or with the help of a mortgage broker (mortgage credit intermediary).
Our interest only mortgage guide compares interest only and repayment mortgages, to help you decide which type is right for you.
You’ll then need to choose either a:
Once you’ve found a mortgage deal, you’ll need to apply for a mortgage with the lender.
The first stage of your application is often to get a mortgage Approval in Principle (AIP) which is an indication of what a lender will lend to you, but not a guarantee. If you’re approved for an AIP, you’re a step closer to getting full mortgage approval.
The interest rate used for the AIP isn’t necessarily the rate you’ll get for your mortgage.
This is because it may be several months until you find a property and are ready to drawdown your mortgage, by which time, the rate may have changed.
Mortgage protection insurance and buildings insurance are compulsory, so you’ll need to shop around for these before you drawdown your mortgage.
There are also other insurances that are worth considering with a mortgage.
Our complete guide to mortgages walks you through the mortgage process in full.
Find the best first time buyer and home mover mortgage deals in Ireland using our comparison.