Will
existing loans affect my borrowing capacity?
Your borrowing capacity is based on your ability to service the
repayments. The more loans and in turn repayments you have the
less you will have available to service a mortgage.
In this regard if you are contemplating buying your home in the
near future, think carefully before committing yourself to debt
repayments that may effect your morgtage borrowing capacity.
In
general lenders get a little uneasy when repayments exceed 35%
of net income. Lenders also stress test all applications to calculate
the impact of a mortgage rates rise on this ratio
For high income earners lenders may be happy with a 40% net service
ratio.
It is also worth noting that lenders place very significant emphasis
on credit history and your pattern of meeting any existing loan
commitments.
Lenders don’t like unpaid direct debits!
In considering an application is is likely that lenders will have
access to your credit history via their membership of The Irish
Credit Bureau
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