DO YOU HAVE recurring nightmares about being buried knee deep in paperwork, chewing your nails as you wait for the green light on your mortgage?
A home is one of the biggest purchases you’ll ever make, if not the biggest, so it makes sense that you’d be a little nervy at the thought of applying for a mortgage.
But in reality, it’s like any other application, and it’s nothing to fear, says Rob Livingstone, Head of Underwriting and Acquisition Strategy with permanent tsb:
We want to get customers through the application process as quickly and easily as they do, and we aim to make a decision within 72 hours. We understand that customers may have had repayment struggles or even negative credit history in the past, but this is no reason to panic about a mortgage application.
Your best bet for speedy approval? Get organised as early as possible. Here’s everything you can do now to fly your way through the process, according to Rob…
“You don’t need to have a current account with the bank where you’ve applied for a mortgage,” says Rob.
It could very well be the case that ‘your bank’ is not the best mortgage provider for you.
School yourself up well in advance by speaking to more than one bank. The more information you can get, the better position you’ll be in to make an informed decision.
If you can get the application nailed down airtight the first time round with all of the necessary documents, you’ll be in good shape for a quick decision.
“The process is not as document heavy as you might think,” says Rob. “If you’re not sure a piece of paperwork is necessary or not, give the mortgage consultant a shout.”
Not entirely sure what you need to have to hand? Find a full list here.
You must show a Proven Repayment Ability (PRA) of at least 85% of your new mortgage repayment for the previous six months leading up to your application date, so do your sums and figure it all out.
For example, if your new mortgage repayment will be €1,000 a month, you’ll need to show you have the ability to repay at least €850 every month. (No idea what your repayments might be? Try this calculator.)
“This proof can be in the form of rent payments, savings or any loan repayments that will be replaced by the mortgage repayment when it kicks in,” says Rob.
Many people think that a loan or credit card is going to automatically disqualify them from the mortgages game. That’s not the case, says Rob, but you do need to be on your best behaviour.
As long as things like loans and PCPs are manageable, and you can show this in your repayment history, that’s fine. Similarly, with overdrafts and credit cards, if you are using them within their T&Cs, that’s cool too.
One thing you should avoid at all costs though? Missed payments which have led to unpaid or referral fees. “We’re not really a fan of those,” says Rob.
Generally, a mortgage provider will only check your previous three months’ bank statements on application, but that doesn’t mean you can plan to stop paying off your loan or max out your credit card the second you get approval.
“Keep your banking slate clean while your application is being processed and until you’ve found a home,” says Rob.
“We understand you have a lifestyle,” says Rob:
Contrary to popular belief, we’re not looking at where you spend your money or which treats you’re indulging in. All we need to see is that you have a float at the end of the month to show you can manage your spend.
Even so, presenting an application that’s as clearly organised as possible will help speed things along. “Try to ensure that all your regular payments are easy to identify on your bank statements. For example, title them as ‘Rent,’ ‘Savings’ or ‘Car Loan’,” he suggests.
Yes, you might have your 10% deposit ready to go, but there are other costs like stamp duty and legal fees that will be unavoidable as the home-buying process rolls on – and your mortgage consultant is well aware of this.
“Most banks need to see that you have enough to cover all of those extras,” says Rob. “So figure out the rough amount and start saving for it.”
Don’t forget, if you hit a dead end along the way or get confused, check in with your mortgage consultant. “There really is no such thing as a silly question,” says Rob.
When you’re making the decision to sell up or renovate, everyone will have their opinion – and won’t think twice about letting you know what it is. But how do you block out the noise and get to the point?
At permanent tsb, we value finding a better way. If you’re house-hunting, or even just saving for your deposit, you’ll want to do things the right way. Head over to our Bring It Home Hub for the inside scoop.
Lending criteria, terms and conditions apply. Security and Insurance required. permanent tsb p.l.c is regulated by the Central Bank of Ireland.
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