When you are looking to get a mortgage there are certain criteria that all lenders will look for. These are the checks and balances that the lenders have in place to ensure you have the ability to repay the loan. Here are some simple checks to help you prepare.
- Regular Savings: When a lender is looking at your ability to pay back a loan the easiest way to show them that you have financial discipline is to save regularly. This will show a lender that you capacity to put a sum of money aside on a regular basis. Make sure this is going into a savings account or credit union.
- Pay your bills on time: Having you bills paid on time shows that you have financial discipline.
- Rent payment: Regular rent payments show that you already have the capacity to make a monthly repayment. This payment should be on a direct debit or standing order from your bank clearing stating rent. Do not pay in cash as there is no record.
- Secure employment: All lending providers will look at how secure your current position is. They will be looking to see if you have a permanent contract and the length of time that you are currently employed. For self employed people they will be looking for financial statements and tax returns.
- Credit history: Your credit history will be a major factor when applying for a mortgage. To ensure a good credit rating make sure all your Credit cards, overdrafts, loans and bills are paid on time.
- Monthly budget: Do you have a monthly budget? Can you track your spending and know that your outgoings match your income. Having a monthly budget show that you are aware of your financial affairs and you are able to manage your money.
- Loans and overdrafts: When applying for a mortgage it is best not to have any outstanding loans or credit card debt. These are red flags to lenders and show that you are spending outside of your budget.
- Deposit: Have you got your deposit ready? Lenders require a minimum deposit of 10%. If the property is €210,000 then you would be required to provide a deposit of €21,000. This would make the loan value €189,000. Of course the bigger deposit you have the less you will have to borrow. But remember to keep some money aside for moving in as you will expenses such as furniture and decorating.
- Lifestyle: Make sure that you don’t have any red flags in your bank statements. Purchasing luxury items and online gambling are issues and can be an issue when applying for a loan.
With a plan and regular saving you will be well on the way to buy your new home. If you have any questions or need help in applying please feel free to contact us. We are happy to help.