The Seven Deadly Sins for young Mortgage Applicants
As of March 2017, the number of mortgage approvals jumped by 62.1% according to the Banking & Payments Federation of Ireland. As demand increases, applicants are facing tighter rules and regulations.
Linda Daly of the Sunday Times outlines the 7 Deadly Sins that young couples should be aware of in order to make the process that little bit easier.
As many young people fled the country in their masses during the Celtic Tiger crash, many are planning their return to Ireland. With the introduction of the EU Mortgage Credit Directive, banks must now accept repayments from the currency in which the applicants salary is paid.
Not Having a Permanent Job
Acquiring a mortgage will also depend on your employment status, like always, nurses and teachers will find it easier to get a loan due to the shortage of skills in those fields. Contract employees however will find it more difficult depending on the type of work and employment duration.
All kinds of applications for the Self employed are challenging and mortgage applications are no exception. Banks will look at the past three years of accounts and calculate the average income from those years.
Failing to Manage your Finances
Managing your finances is a skill. Ensuring your current account is in continuous credit is a must! Avoiding credit card splurges and dipping into your overdraft are to be avoided. “Payday loans” are a definite no and ensure your standing order or direct debit are marked with a rent title or landlords name, otherwise the bank will disregard these payments and assume this money was spent on luxury goods.
Opening an Online Gambling Account
Fond of gambling a little each month? A little is a lot in the banking world. If you currently hold an online betting account, close it! This transaction on your statement within 6 months of your application is a guaranteed no from the bank.
Buying Land without Planning Permission
Whether buying a plot of land or building your own home, planning permission is essential. If building your home, your application must include planning permission, architect’s drawings and a building contract.
Failing to cope with Interest Rate hikes
Interest rates fluctuate; add 2% to the average interest rate to ensure you can always keep up with repayments.
Not Shopping Around
Shop around as you would for any purchase. Picking the best option is important as you will be paying this for 30 years+, therefore it is essential that you pick the best product for you.
Linda Daly, Sunday Times
The views and opinions summarised in this article are those of the author – Linda Daly, The Sunday Times, 28th May 2017.