Mortgages in 2024

by | Jul 1, 2024 | Mortgages, Back to Blog

Mortgages-in-2020

Mortgages Options in 2024

Mortgage Confusion

There is lots of noise in the media currently around mortgages, and 2024 is set to be a busy year for Mortgage Lending.  We are currently seeing weekly enhancements to both mortgage criteria and changes to interest rates which is being welcomed by customers, all be it somewhat confusing. We are also seeing new lenders enter the mortgage market which is great and very positive for borrowers to see. We have also seen some lenders move the maximum age for repayment of their mortgage out to age 80. Again, it is great to see change and innovation in the mortgage lending market in Ireland, but a word of caution, just because you can repay your mortgage to age 80, doesn’t mean you should.

With all the changes and more to come, it is more important than ever to seek advice from a Trusted Mortgage Broker.

With such a variety of lenders and products in the marketplace, it is a great time to get a Mortgage approval.

These are all options open to customers

  • First Time Buyers,
  • Home Movers,
  • Switchers,
  • Equity Release
  • Self Builds,
  • Buy to Let Mortgages,
  • Pension Mortgages
  • Non-resident Mortgages
  • Seniors Equity Release

Some lenders have preferential offers such as:

Cash Back Offers

With some lenders now offering cashback on their mortgages, it’s not surprising that customers, especially first-time buyers, are being tempted by these cash lump sums. The most important question to consider before jumping around the kitchen with excitement is; do these offers actually offer the best value over the mortgage term? For more click here 

 

Lender

Cash Back Offerings

AIB None available to first time buyers, €3,000 to switcher. Read Here For More 
Bank Of Ireland 2% cashback – first-time buyers, movers and switchers  Extra 1% available to BOI current account holders only , after 5 years. Read Here For More
PTSB 2% cashback – first-time buyers, movers and switchers & 2% cashback each month – on mortgage repayments from a PTSB Explore account. Read Here For More
EBS 2 % cashback – first-time buyers, movers and switchers. 2% upfront, 1% in 5 years. Read Here For More
Haven Mortgages €5,000 available to first and second time buyers who borrow in excess of €250,000. €3,000 available to switcher. Read Here For More
Avant  1% cashback- currently offering this to first time buyers only.

 

Are Mortgage cashback offers good value?

Now this is great question to ask yourself.
These cashback offerings whether you’re looking to buy your first home or switch mortgage, it’s essential to shop around and take advice, from a trusteed mortgage advisor, to make sure you’re getting the best deal for your situation. Let are terms and conditions to the cashback offers.

Switching Incentives

Anytime you look at social media or read the papers, somebody is telling you to switch your mortgage to a different lender. But it is a good idea?

So, let’s look at Should, Could & Would you switch providers.
Long answer short. Yes, if you are paying more than you should. That is, if your interest rate is higher than what is available for other providers. Always get advice though from someone who is not tied to any one lender, before switching your mortgage. While some offers look great, you need to know the full picture.
You need to know exactly what is being offered, the pro’s and the con’s. Your existing provider might offer a better rate than you are currently on as well, so check with them. For more on Switching Mortgage Providers

The government’s Help-to-Buy scheme

The Help to Buy Scheme having also been extended is another bonus to those First Time Buyers.
First time buyers who qualify for the scheme can factor the tax rebate into their deposit requirements. This will ease the burden a good bit. The big issue is that the Incentive is only available on new properties, either buying or self building.

Main Highlights

  • Designed to assist First Time Buyers with obtaining deposit required to purchase or build a new property to live in.
  • It is a refund of income tax paid over the previous 4 tax years.
  • It is only available if all parties to the mortgage application are First Time Buyers .
  • Applicants must borrow at least 70% for the purchase price or build cost if building.
  • Purchase price must be no greater than €500k.
  • Refund is currently the lesser of, 10% of the purchase price/ build cost, taxes paid or €30k. Whichever is the lowest figure.
  • If buying in a developer, the Building Contractor must be registered on the Revenue website as eligible For more on the help to buy scheme

Clearly the mortgage market is ever changing and developing and as such can leave people somewhat overwhelmed in an evolving climate.

As trusted Mortgage Advisors and Brokers, Advice First Financial monitor all these changes, making it easier for our customers to find the right mortgage for them.

We offer an enquiry service, and our dedicated staff are always available to assist you and answer your questions.
Advice First Financial are not tried to any lenders, meaning we offer trusted, unbiased advice on your mortgage requirements.

If you want help, we are happy to advice.

Call us today in Letterkenny: 074 910 3938

Get Advice

Talk to us now and make an appointment with one of our Letterkenny team of QFAs. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 91 03938.

Financial services firms in Ireland are regulated by the Central Bank.

For the latest updates and financial news, connect with us on Facebook and LinkedIn.

Mortgages Options in 2024 FAQ’s

What exactly is a mortgage?

A mortgage is simply a long-term loan that’s used to pay for a house.

How do I start the application process?

There are a number of easy ways to begin your application:
Get in touch with a mortgage broker, who will do all the work for you or get in touch with the lenders directly. Obviously, we would recommend the mortgage broker route as they will shop around all the lender and provide you with the best options for you. I would suggest dealing with a fee-based broker though. If the broker is not charging a fee, then they will only deal with lender who pay them a commission, which means you only get options from a select number of lenders rather than the entire market.

Here are some tips on getting mortgage ready

What’s a fixed rate mortgage?

With a fixed rate mortgage, your interest rate and monthly repayments are fixed for a set time as agreed between you and the lender. You can choose the best time frame for you.

Although a fixed rate means your repayments cannot increase for a set period of time, your repayments will not fall during the fixed rate period. As a result, you could miss out on lower interest rates and lower repayments. Fixed rates may cost more over the long run, but they offer peace of mind as you know your repayments will not rise during the fixed rate period.

We would recommend speaking with a mortgage broker though, you can discuss all rate options and they will help you decided whether a variable rate fixed rate is right for you. They will also be able to do market research for you on the best rates available for you.

What’s a variable rate mortgage?

Variable rates offer the most flexibility. They allow you to increase your repayments, use a lump sum to pay off all or part of your mortgage or re-mortgage without having to pay any fixed rate breakage fees.

However, because variable rates can rise and fall, your mortgage repayments can go up or down during the term of your loan.

How much will my repayments be every month?

Your repayments will depend on how much you borrow, the term or length of your mortgage as well as the interest rate that you’re charged. See this handy online Mortgage Calculator for an indication of how much your monthly repayments might be. We would recommend speaking with a mortgage broker though, you can discuss all rate options and they will help you decided whether a variable rate fixed rate is right for you. They will also be able to do market research for you on the best rates available for you.

How long will my mortgage last for?

Every mortgage has a life span or term. The minimum term would be 5 years and you could also possibly qualify for the maximum term possible which is 35 years. For a family home the maximum term of the mortgage is determined by your age. The maximum to have the loan repaid is age 68 with some lenders and age 70 with others. For Buy to Let mortgages have a maximum term of 25 years.

A shorter term means you’ll pay your mortgage off quicker, but it also means your monthly repayments will be higher. It is good advice to clear your debts, including your mortgage, as quickly as you can, it is also important to have a life and have to money to do all the other things in life that are important. So, striking the right balance is very important.

What documents do I need to make a mortgage application?

You will need certain documents when you apply for a mortgage, and you should keep a copy of anything you give to a lender or broker.

Proof of ID, proof of address and proof of your Personal Public Service Number (PPSN)

Proof of income: latest P60, payslips, certified accounts if self-employed

Evidence of how you manage your money such as current and loan account statements for the last three to 12 months, depending on the lender

Her is Permanent TSB’s full list of documents required here.
Her is AIB’s full list of documents required here.
You can see that the lists are very similar, which is the same with all other lenders.
These lists will not be complete for everybody as they do not take account of your individual circumstances.

What are the other Mortgage fees and charges?

When buying a property, or switching your mortgage, it is not just your regular mortgage repayments you need to think about. There are a number of other costs involved which you should be aware of and ask your lender about. Some of these can be reduced or avoided by shopping around.

They include:

  • Brokers’ fees – some brokers charge a fee to arrange your mortgage or for mortgage advice. This might be a percentage of the mortgage amount or a flat fee. Not all brokers charge a fee so if you are planning to use a broker it is important to ask about this and to shop around. If a broker is not charging a fee, check with them what lenders they advise on. They may only work with lenders who pay them commission and you may not get a full market comparison.
  • Estate agent fees – if you are selling a property and using an estate agent you will have to pay a fee for this service. It is usually between 1% and 2.5% but can also be a flat rate.
  • Solicitor’s fees – to look after the legal aspects of your mortgage a solicitor will charge a flat fee or a percentage of the mortgage amount, typically 1% to 2%. It is worth shopping around a few solicitors.
  • Valuation fee – this is paid to a professional valuer to estimate a property’s market value and is required by the lender as part of your mortgage application. A valuation is valid for a short period of time, typically four months. You will need to get an up-to-date valuation of your property if you want to switch mortgage. Valuation fees typically run between €150 and €185.
  • Structural survey fee – a structural survey is done to find out the condition of a property. If any issues arose during the valuation of the property or it is very old, your lender may insist on a structural survey. Even if your lender does not require it, you may want to get a survey anyway to be sure there are no problems with the building. The amount you will pay can be dependent on the type, age and location of the property. It is not always a requirement for the lender, but it is always recommended to have a structural survey done for your own peace of mind.
  • Stamp duty – this is a tax payable on documents when you transfer ownership of a property. For residential property it is charged at 1% of the property value up to €1 million and 2% for anything above that.
  • Local Property Tax – this tax, collected by Revenue, is charged on all residential properties and came into effect in 2013. It is a self-assessment tax, and you calculate what is due based on your own assessment of the market value of your property. It can be paid in a lump sum or spread out over the year.

You should take the above into account when you are working out how much you will be able to borrow.

What is the stamp duty payable on mortgages?

Stamp duty is payable at 1% on properties up to the value of €1 million euro and 2% on properties over this amount.

What are lenders' normal lending criteria for a mortgage?

Every lender will look at various criteria before deciding whether to approve a mortgage. Some of the main factors that are taken into account are:

  • A good credit history.
  • Being aged 18 or over.
  • Age not greater than 70 at the end of the mortgage term. With some lender this age is 68.
  • Ability to repay – as a guide mortgage repayment on all loans including your mortgage should not exceed 35% of your net income
  • Secure employment.
  • Continuous employment at least 12years.
  • Self-employment for at least 2 years, some lenders require 3 years.
  • Good bank account management

With all lenders the primary focus is on your repayment capacity.

What else should I bear in mind when taking out a mortgage?

You’ll generally need to arrange home insurance and mortgage protection before drawing down your loan.

Home insurance is a property insurance which covers private homes, buildings and contents. The cost of home insurance often depends on what it would cost to rebuild your house and how much it would cost to replace all of the contents of the house. The replace value of your property may be more than the purchase price.

When taking out a mortgage you’ll also need to consider how it’ll be paid off in the unlikely event of your death before the mortgage has been fully repaid. When you get a mortgage to buy your home, you’ll generally be required by your lender to take out mortgage protection. This is a particular type of life assurance taken out for the term of the mortgage and is designed to pay it off on the death of the borrower or joint borrower before the end of the mortgage term.

What is the timeline for the mortgage process?

Wherever you are on your mortgage journey, whether you’re ready to make an application, or just want to ask some questions – we’re here to support you so book an appointment today with our mortgage team!

We’ll outline the mortgage process and the required documents you’ll need for your application and you can then gather and submit the documents required at a time that suits you, allow 1-2 weeks for gathering these documents.

Once the lender receives your application and supporting documentation, they will get back to you in 3 working days to let you know if it’s ready to go to our underwriting team for a full assessment, or if they need any further documents or information from you first.

Once they submit the documents to their underwriting team for full assessment, they will let you know if they can approve your application within 10 working days. In the rare event that they can’t come to a decision in that timeframe, they will be in touch to let you know and to inform you of when they will have a decision.
If you are using a mortgage broker the lenders will communicate this update to them who will in turn communicate with you.

Once your application for credit is approved, (called approval in principle, AIP) and you have found your home, you will be required to arrange for a valuation of your property. A credit check will also be undertaken on all applicants of the mortgage, and you will need to arrange Life Insurance and Home Insurance. Your lender will issue the loan offer to your solicitor and once you sign the documents, your solicitor will arrange the transfer of funds and collection of your keys to your new home.

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