home loans
Frequently Asked Questions
Choose a topic below:
1. Why deal with Mortgage Company of Ireland?
Experience
Your mortgage application will be reviewed by our experienced mortgage
teams, headed by qualified Chartered Accountants with over 20 years finance
experience.
Independence
Mortgage Company of Ireland act as independent intermediaries for
Ireland's major lenders. Our recommendations are based on an independent
assessment of the suitability of a mortgage product to meet your unique requirements.
Our focus is on the long-term value of the mortgage product.
Service
We pride ourselves on providing an unrivalled professional service to our clients.
- Each
application is allocated to an experienced mortgage consultant.
- Your
dedicated consultant will deal with your application from start to finish.
- We
provide fast decisions and deal promptly with all relevant matters.
- It
is our policy to meet all clients in person.
- We strive to build long lasting relationships.
Fees
We do not charge you fees for our service. Lending institutions pay Mortgage
company of Ireland fees for introducing business to them. The level of
payment to mortgage company of Ireland is typically around .75% of the mortgage.
We also provide, if requested at the outset, a fee based service, charging you
the client an agreed fee and in turn refunding fees received from the lender
to you. The choice is yours.
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2. Which lender offers the best mortgage package?
The Irish market is very competitive. No single lender can claim to offer the
best package. There is a wide range of mortgage products available and significant
differences between lenders in regard to lending criteria. Our role is to advise
on a mortgage product that best suits your needs.
The arrival of Bank of Scotland into the market drove lenders margins
down for the benefit of borrowers. Bank of Scotland continue to compete aggressively
although they tend to restrict facilities to 80% of property value.
AIB offer equally good variable rates in addition to impressive fixed
rates, while maintaining a cautious approach with income multiples.
ICS offer an excellent range of rates backed up with very efficient
service.
IIB are particularly strong in the re-mortgage area.
Irish Permanent probably the best known lenders in the market, consistently
provide quality products and service.
First Active are primarily a mortgage bank and offer excellent first
time buyers and re-mortgage facilities.
Matters to be considered when choosing
a lender include:
- Lenders
lending criteria
- Current
mortgage rates both new business and existing customer rates
- History
of rates compared to the rest of the market
- Market
experience of lenders commitment to the Irish market
- Product
flexibility
- Service
factors including speed of which mortgage can be processed and service throughout
the life of the mortgage
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3. What are the steps involved in the mortgage process?
1. Make a decision to buy
property
- Once
decision is made, start saving
- Forgo
entering into new loan agreements whenever possible
- Keep
a close eye on property market
- Establish
your property goals
2. Obtain loan approval
- Review
our site in detail lending criteria, borrowing capacity, costs etc
- Complete
loan application form
- Quickly
assemble all information needed to support your application
- Choose
lender in conjunction with Mortgage Company of Ireland
- Obtain
formal approval in principle
3. Choose a property
- Choose
your preferred location and match borrowing capacity with property goals
- Be
prepared to negotiate aggressively
- Dont
rush or buy when you are not convinced
- Be
prepared to stretch - the property you want is usually just beyond your reach
- Obtain
approval in respect of the chosen property
4. Buy property
- Engage a Solicitor-our site has details and contact names of a range of
solisitors
- Read contracts and offer letters before signing ask questions
if you are not happy
- Sign contracts for purchase
- Sign Loan Offer Letter arrange house and life cover
- Close sale and draw down mortgage
- Move in
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4. What are lenders normal lending criteria for a mortgage?
- Good
Credit History
- Age
21 or over
- Age
not greater than 65 at end of mortgage term
- Ability
to repay as a guide repayments on all loans including your mortgage should
not exceed 40% your net income
- Secure
employment
- Continuous
employment for 2yrs
- Maximum
mortgage available to Irish residents is 92% - Non-Residents 70% of property
value
The primary focus is on repayment capacity.
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5. How long does mortgage approval take?
Use our calculators to estimate your borrowing capacity and review the typical
lending criteria above. The next step is to give us a call or complete our secure
on line application Based on the information we will generally be able to advise
you straight away whether you will qualify for a mortgage and we will also provide
you with an estimated borrowing limit. Our consultant will then advise
you of the precise information required (see point 11 below) and make an appointment
to meet you. At that meeting our consultant will explain the various options
available and will guide you through the completion of any application forms
required. We will then submit the applications to the chosen lenders and we
would expect formal approval in two to three days.
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6. How much can I borrow?
The key consideration for you is to be happy that you can comfortably afford your
repayments. To calculate your borrowing limit please review our how much can you
borrow calculator. Lenders look at two main areas when considering an application.
- Income
- Loan
to Value
Income
Lenders look at both gross income and net income. As a guide lenders will advance
up to 3.5 times the gross income of the main earner plus 1 times the gross income
of the second earner. In reviewing net income repayments on all borrowings including
the proposed mortgage should not exceed 40% of net income.
- Some
overtime will be taken into account
- An
element of bonus, to the extent, it is guaranteed, will be taken into account
- Consideration
will be given to length of employment and security of employment
- For
commission based income lenders estimate normal income levels
Loan to Value
Irish residents qualify for a loan to value of up to 92% for Irish properties.
Foreign residents borrowing in Ireland are usually limited to a loan to value
of 70%.
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7. Which rate should I choose?
One decision which needs to be made is whether to choose a variable or fixed rate
mortgage. There are several factors to consider in making your choice. Future
interest rates are uncertain and fixing interest rates should be considered in
the following circumstances:
- Where
mortgage repayments represent a major portion of net income
- Where
mortgage levels are large > Euro120K
- Where
there are general feelings that interest rates will rise
- Where
rates are historically low
- Where
client is risk averse
Most lenders offer products, which allow you split your mortgage into fixed
and variable elements. It is important to bear in mind that breaking a
fixed rate contract may involve penalties. Please click here
to view current mortgage rates. Your mortgage consultant will discuss the various
options open to you.
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9. What is a First Time Buyers Grant?
The First Time Buyers grant is only available to a first time buyer of a new
property. It is not available for the second hand buyer.
A grant of 3,810 is available from the Department of the
Environment for new houses (including flats and maisonettes) where the buildings
in question meet the conditions of eligibility as laid down by the Department.
These conditions include:
- The size of the building must not exceed 125 sq. metres
- The contractor is registered for VAT and holds a C2 or tax clearance certificate
- The buyer and his/her spouse has never previously owned or built another
dweller in Ireland or abroad for his/her occupation.
Application form for new house grant form HAI 93 from the Department of the
Environment and Local Government Offices, Ballina, Co Mayo Ph: 096-24200.
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10. Costs associated with a mortgage?
Mortgage Company of Ireland do not charge arrangement or acceptance fees. There
are several costs associated with the mortgage process as outlined below:
Deposits
Savings are a key part of the mortgage process. Whereas banks currently place
less reliance on savings than in the past, the discipline of saving cannot be
underestimated. As max facilities of 92% are only available the remaining 8%,
plus funds to furnish the home etc. needs to be found. A steady savings record
helps an application. Banks will require evidence of the deposit in the form
of savings books etc as part of the loan underwriting process. Loans from parents
very often form a part of the deposit. Savings also reduce the necessity for
short term borrowing which may have a strong impact on cash flow following a
house purchase.
10 (b). Stamp Duty Rates STAMP DUTY RATES Nov 2001
Purchase Price
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First Time Buyers
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Other
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Up to 127,060
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---
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---
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127,060 - 190,590
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---
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3%
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190,590 - 254,120
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3%
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4%
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254,120 - 317,650
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3.75%
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5%
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317,650 - 381,180
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4.5%
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6%
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381,180 - 635,300
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7.5%
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7.5%
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Over 635,300
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9%
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9%
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There is relief for first time buyers as per above table. Stamp Duty on property
transfer is expensive in Ireland. For larger properties, the rate is as high
as 9% of the value of the property. Funds need to be set aside by the borrower
to cover stamp duty, which is payable on closing. Lenders do not advance funds
to pay stamp duty.
10 (c). LEGAL FEES
Use 1% of property value plus vat at 20% as a general guide. In addition outlay
for stamp duty on the mortgage document and other miscellaneous costs might
add in the region of 400 for a standard mortgage. Should you require a solicitor,
contact us and we would be happy to make a recommendation.
10 (d). INDEMNITY BOND
Indemnity Bonds are insurance policies taken out by the lender to insure against
a potential loss in the event of a forced disposal of the property. Lenders
only take out such bonds when the loans exceed 75% of the value of the property
(which is highly likely for first time buyers). Many lenders waive indemnity
bond charges.
10 (e). SURVEYORS FEES
It is recommended that you employ the services of a qualified surveyor to check
the property for any structural problems or to advise you on any matters that
may involve significant outlay e.g. dry-rot, subsidence, dampness etc. The structural
survey is usually not a condition of the loan offer and is a completely different
matter to the valuation, which is carried out on the lenders behalf. Use a reliable
firm, agree their fees at the outset and insist on a written report. Budget
200 approx.
10 (f). VALUATION FEES
Before a lender will issue a formal offer letter in respect of a property,
they require an independent valuation from a qualified valuer. We will arrange
this for you. Budget 125 approx.
LIFE ASSURANCE
Lenders require mortgage holders to take out a life insurance policy. This
policy provides for the repayment in full of the mortgage in the event of death
of one of the mortgage holders. You are not required to take this policy out
with the mortgage provider.
HOME INSURANCE
The lender will also require that you take out a building insurance policy
on your house and that the interest of the lender be noted on the policy.
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11. What documents will I need to support a mortgage application?
- Signed
Application form
- Latest
P60
- Recent
Payslips x 3
- Completed
Employee Status forms
- ID
2 forms Photo and Utility Bill
- Recent
statement of ALL loans outstanding including mortgage statement
- Evidence
of Savings e.g. copy of deposit book etc
If you are Self-Employed:
- Up
to date accounts
- Recent
bank statements
- Completed
Auditors Reference Report
If you are building your
own house:
- Copy
of Planning Permission
- Architects
Drawings
- Building
Contract
NOTE: We will provide you with the application form for signature together
with Status Forms for your Employer.
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12. What classes of mortgages are available?
1. Annuity Mortgages:
- Majority
of mortgages in Ireland are Annuity Mortgages
- Interest
and capital are repaid over term of mortgage. In early years bulk of repayments
represent interest
- Not
exposed to stock market fluctuations
2. Pension Mortgages:
- Repay
interest only over mortgage term
- Suitable
for Self-Employed
- Pension
fund builds up over life of mortgage
- Pension
lump sum on retirement used to clear mortgage
- Tax
efficient
- Professional
advice essential taxation, pensions etc.
3. Endowment Mortgage:
- Repay interest only over mortgage term
- Exposed to stock market
- Less popular today than in the past
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13. Do you provide finance for Non-Residents buying a property in Ireland?
In general the profile that lenders are looking for in respect of non-resident
and a residents are very similar. Many non-resident mortgages are for investment
purposes perhaps with the intention of returning at some time in the future
with the property initially being available for rent. In such instance, mortgages
are usually charged at the investment mortgage rate, which is typically ½% higher
than home loans and may not attract some of the discounted offers available
to resident home owners. With e-mail and fax facilities, there is no reason
to expect any significant delays in processing non-resident applications. The
main difference is the percentage loan to value. For residents this is 92% and
for non-residents the normal limit is in the region of 70%.
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14. Do you provide finance for Foreign Property Investments by Irish residents?
In certain circumstances, foreign banks are willing to advance in the region
of 60% facilities to Irish residents buying properties overseas. We do not currently
act for any foreign banks in this regard. Irish banks will only fund overseas
property by taking security on existing property in Ireland. We can provide
facilities in this area.
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about us -
contact us - info@financeirl.ie
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Dublin
Office, 97 Malahide Road Dublin 3
Dublin - Cork - Kerry
Tel: 01 8327250 - Fax: 01 8327273 - Email: info@financeirl.ie
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