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Frequently Asked Questions

- Why should I use The Mortgage Advice Store
- Which lender offers the best mortgage package?
- What are the steps involved in the mortgage process?
- What are lenders normal lending criteria for a mortgage?
- How long does mortgage approval take?
- How much can I borrow?
- Which rate should I choose?
- Cost associated with a mortgage?
- What documents will I need to support a mortgage application?
- What classes of mortgages are available?
- Do you provide finance for non-residents buying a property in Ireland?
- Do you provide finance for foreign property investments by Irish residents?
- What is a repayment mortgage?
- What is an endowment mortgage?
- What is a pension mortgage?
- What is APR?
- What is loan to value?
- Which type of rate is better, fixed or variable?
- Can I borrow more money if I need to?
- Can I alter my repayments when it suits me?
- Can I take a break from my mortgage repayments?
 

Why should I use The Mortgage Advice Store?

Independence

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. Our website reflects our committment to bringing you all the latest news and information on the Irish Mortgage market to assist you in making an informed decision on the range of mortgages available in Ireland.

Experience

All Irish mortgage applications and enquiries are handled by highly experienced finance specialists.

Service

We pride ourselves on providing an unrivalled professional service to our clients.

1. If visiting our offices does not suit you, we will meet you at a location and time of your choosing e.g. evenings or Saturday mornings if required.
2. Each application is allocated to an experienced mortgage consultant .
3. Your dedicated consultant will deal with your application from start to finish.
4. We provide fast decisions and deal promptly with all relevant matters.
5. We meet with our clients in person.
6. We strive to build long lasting relationships.

Fees

We do charge arrangement fees for our service.

Mortgage Advice Store Ltd is regulated by the Central Bank Of Ireland .

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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.

AIB offer good variable rates in addition to impressive fixed rates, while maintaining a cautious approach with income multiples.

KBC are particularly strong in the re-mortgage area.

Permanent TSB are probably the best known lenders in the market, consistently provide quality products and service.

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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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 The Mortgage Advice Store
- 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
- Don’t 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 solicitors
- 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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What are lenders normal lending criteria for a mortgage?

1. Good Credit History
2. Age 21 or over
3. Age not greater than 65 at end of mortgage term
4. Ability to repay – as a guide repayments on all loans including your mortgage should not exceed 40% your net income
5. Secure employment
6. Continuous employment for 2yrs
7.

Maximum mortgage available to Irish residents is 90% - Non-Residents 70% of property value

First Time Buyers: 90% of 1st €220,000, 80% of balance
Second Time Buyer: 80%

The primary focus is on repayment capacity.

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How long does mortgage approval take?

Use our calculator to estimate your borrowing capacity and review the typical lending criteria above. The next step is to give us a call or complete our online contact form. 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 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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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.

1. Income
2. 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

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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. Your mortgage consultant will discuss the various options open to you.

 

Variable rate warning: The cost of your monthly repayments may increase - If you do not keep up your repayments you may lose your home. The payment rates on this housing loan may be adjusted by the lender from time to time.

Warning: Your home is at risk if you do not keep up payments on a mortgage or any other loan secured on it

Fixed rate warning: You may have to pay charges if you pay off your fixed-rate loan early

Interest only warning: The entire amount that you have borrowed will still be outstanding at the end of the interest-only period

Debt consolidation warning: This new loan may take longer to pay off than your previous loans. This means you may pay more than if you paid over a shorter term

Endowment loan warning: There is no guarantee that the proceeds of the [Insurance Policy / Pension Policy] will be sufficient to repay the loan in full when it becomes due for repayment

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Costs associated with a mortgage?

The Mortgage Advice Store 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.

What rate of stamp duty do I need to pay?

As of December 8th 2010, stamp duty has been reduced to a flat rate of 1% on properties values up to €1 million and 2% on any amounts over €1 million. There will no longer be a distinction between new versus second hand properties or first time and non-first time buyers. .

Property Value
Rate of Duty
First €1,000,000
1%
Excess over €1,000,000
2%

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.

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.

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.

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.

ARRANGEMENT FEE

We charge an arrangement fee of €399 only is loan approval is granted (can be waived)

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What documents will I need to support a mortgage application?

1. Signed Application form
2. Latest P60
3. Recent Payslips x 3
4. Completed Employee Status forms
5. ID – 2 forms – Photo and Utility Bill
6. Recent statement of ALL loans outstanding including mortgage statement
7. Evidence of Savings e.g. copy of deposit book etc

If you are Self-Employed:

1. Up to date accounts
2. Recent bank statements
3. Completed Auditor’s Reference Report

If you are building your own house:

1. Copy of Planning Permission
2. Architect’s Drawings
3. Building Contract

NOTE: We will provide you with the application form for signature together with Status Forms for your Employer.

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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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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.

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Do you provide finance for Foreign Property Investments by Irish residents?

No

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What is a repayment mortgage?

With this type of mortgage your repayments are made up of interest and a part of the capital itself. In the early days your repayments are mostly interest, but over time the balance reduces and as you near the end of your loan your repayments are mostly capital.

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What is an endowment mortgage?

Here you repay only the interest element of the loan. At the same time you make separate payments into an endowment policy. At the end of the mortgage term, depending on the performance of the endowment policy, the proceeds may be enough to pay off the mortgage.

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What is a pension mortgage?

Here you pay only the interest on the mortgage and also make payments into a pension plan. When you retire you use the proceeds of the pension lump sum to pay off your mortgage. This type of mortgage is more suitable for self-employed people.

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What is APR?

People often have difficulty comparing different interest rates. The Consumer Credit Act 1995 has attempted to rectify this situation. APR stands for Annual Percentage Rate. It must be included in advertising to make it simpler for consumers to compare offers of credit from different sources.

APR calculates the total amount of interest which will be paid on a loan, and adds to this any other charges which the borrower has to meet. This total cost is then divided by the number of years in the loan term to find out what the borrower will be paying per year. This amount is then expressed as a percentage of the loan, i.e. as the APR.

Finally, when choosing a mortgage, don't always be swayed by an attractive rate alone. While it is certainly important, you should also consider the flexibility of the mortgage on offer and whether it is suitable for your particular needs as you move through your mortgage term.

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What is loan to value?

Loan to value shows your mortgage as a percentage of the value of your property.

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Which type of rate is better, fixed or variable?

That really depends on how you feel about your mortgage repayments changing from time to time. Variable rates will rise and fall as general market rates rise and fall. However, a fixed rate will always stay the same for as long as the fixed rate period is in effect. This makes monthly budgeting easier. Contact us now to talk to a mortgage consultant.

Variable rate warning: The cost of your monthly repayments may increase - If you do not keep up your repayments you may lose your home. The payment rates on this housing loan may be adjusted by the lender from time to time.

Warning: Your home is at risk if you do not keep up payments on a mortgage or any other loan secured on it

Fixed rate warning: You may have to pay charges if you pay off your fixed-rate loan early

Interest only warning: The entire amount that you have borrowed will still be outstanding at the end of the interest-only period

Debt consolidation warning: This new loan may take longer to pay off than your previous loans. This means you may pay more than if you paid over a shorter term

Endowment loan warning: There is no guarantee that the proceeds of the [Insurance Policy / Pension Policy] will be sufficient to repay the loan in full when it becomes due for repayment

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Can I borrow more money if I need to?

Yes. Additional funds are available for a range of purposes, from home improvements to educational or medical fees.

You can top up your loan provided it does not exceed 90% of the value of the property. Additional funds are normally issued as a separate loan, so that you can choose a different term of repayment, interest rate etc. as required.

If you require additional funds, or would like further information, Contact us now to talk to a mortgage consultant.

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Can I alter my repayments when it suits me?

Yes. As your life changes so will your mortgage needs. What suits you this year may not suit next year. That’s why we can offer you a wide range of useful options that let you change your mortgage to suit your needs. At different times these options allow you to pay more, pay less – and believe it or not – pay nothing at all by deferring payments! Check out our Flexible Options package for more information.

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Can I take a break from my mortgage repayments?

We have a number of mortgage breaks available to Mortgage Store customers, ranging from 1 to 3 months. Check out our Flexible options package for mortgage information.

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Mortgage Advice Store Ltd is regulated by the Central Bank Of Ireland

Variable rate warning: The cost of your monthly repayments may increase - If you do not keep up your repayments you may lose your home. The payment rates on this housing loan may be adjusted by the lender from time to time.

Warning: Your home is at risk if you do not keep up payments on a mortgage or any other loan secured on it

Fixed rate warning: You may have to pay charges if you pay off your fixed-rate loan early

Interest only warning: The entire amount that you have borrowed will still be outstanding at the end of the interest-only period

Debt consolidation warning: This new loan may take longer to pay off than your previous loans. This means you may pay more than if you paid over a shorter term

Endowment loan warning: There is no guarantee that the proceeds of the [Insurance Policy / Pension Policy] will be sufficient to repay the loan in full when it becomes due for repayment