While you’re doing the hard work to get a mortgage, everything from moving back in with your parents, missing nights out, instant coffee instead of takeaways and homemade sandwiches for lunch, don’t let all your hard work be in vain!
Having the cash for a deposit may not be enough.
Banks and building societies don’t just look at how you save, but they also analyse how you spend!
Here are 6 main things to avoid if you are looking for mortgage approval in Ireland:
1. Missing payments
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.
2. Taking out a loan
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.
3. Changing jobs
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 a mortgage in principal.
4. Large payments
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.
5. Not set up direct debit for savings
This one catches lots of first time buyers out. Internet banking makes transferring money to your savings account easy but most banks prefer to see a more formal commitment to your savings in the form of a direct debit.
For most online banking options, a direct debit is just as easy to set up. By formalising the payment in this way, it 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 a major red flag to your bank 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 home insurance quote from Acorn Insurance. Give us a call on 1890 800 222 or Request a Callback and we’ll find the best value home insurance for you.
The best home insurance quote for you from the leading insurers.
That’s it in a nutshell.
If you’re starting out on your journey towards a mortgage, get in touch with our Acorn Mortgages team for all the help and assistance you need to get the keys to your new home.