Are you doing the hard work to get a mortgage? Whether that is moving back in with the folks, missing nights out with friends or having homemade sandwiches for lunch.
But did you know, having the cash for a deposit may not be enough?
Banks and building societies look at how you spend, not just how you save, when they are assessing you for a mortgage.
Here are six things to avoid if you are looking for mortgage approval in Ireland:
If you are in the process of saving for a mortgage it is worth getting a credit check from the Irish Credit Bureau (ICB) particularly if you may have missed a payment or two on a student credit card while at college. Loans stay on the books of the ICB for a period of five years after they are closed off, whether they were paid or not.
If missed or failed repayments are more recent, they may stop you getting mortgage approval, even if you have saved a deposit.
We all need a loan from time to time, whether it is for a car, education or an unexpected expense. The year you plan on getting mortgage approval is probably not the best time to take out a loan if you can avoid it. Consider holding on to the car you have or swapping that holiday for a staycation instead of having another repayment from your account.
Although it is likely many of us will hold 10 to 15 jobs in our lifetime, most mortgage providers want to see that you have been in your current role for at least 6 months and passed any probationary period before you will be considered for mortgage in principal.
It goes without saying but avoid the temptation to dip into your savings for something significant in the run up to meeting the bank. Although most lenders will be sympathetic towards the cost of a wedding or a car, if a promotion at work required you to have one, a holiday, shopping spree or frivolous spending will not be looked on as favourably.
This one catches lots of first time buyers out. Internet banking makes transferring moneyto your savings account easy, so you transfer it when you have it, right? This isn’t good enough for most banks, they want to see that for a period of at least 6 months you have been direct debiting a similar amount to a mortgage into your savings account or as rent. Formalising the payment in this way shows you have a commitment to paying on a regular basis and that you have enough cash in your account to cover the repayment costs of the loan.
Finally, while most banks won’t be concerned about a small flutter on the horses at Christmas or on the world cup final, if you gamble large amounts or regularly, it is something your bank will flag as a concern if you are getting a mortgage. It might prevent you from getting approval at all. If you are starting to save for a deposit, cancel your bookmaker accounts and delete any apps because you know, the house always wins.
Another thing to be aware of as a first-time buyer is home insurance. Most banks or building societies insist you have it to protect against damage to the property but you don’t have to take home insurance out with your mortgage provider.
Why not get a quote from AIG home insurance? We’ve been insuring businesses and homes in Ireland since the 1970’s.