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Mortgage Frequently Asked Questions

 

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Here at Advice First Financial we receive many Frequently Asked Questions about Mortgages, so we have compiled a list of our Mortgage FAQs which you may find useful.

 

Mortgage FAQs

How do lenders calculate how much I can borrow?

How much you can borrow really depends on what you can prove you can comfortably afford in monthly repayments for the life of the loan.
When assessing your borrowing capacity, the lenders will look at the overall financial situation. This will include:

  • Your income – only guaranteed income will be used for calculations. Bonuses and overtime may not be taken into account.
  • Outgoings
  • Savings
  • Other loan repayments

A “stress test” will be carried out on all applications. This will show whether you could continue to pay your mortgage if interest rates were to increase.

What is the maximum term I can avail of?

The maximum term is 35 years or to age 65, whichever comes first. A couple of lenders will go to age 70. Our advisers will be able to advise which term best suits you.

How much of a deposit will I need to purchase my home?

  • For first time buyers or people switching providers, you can borrow up to 90% of the valuation of the property or 90% of the purchase price, whichever is lower. 
  • Second time buyers or people moving house, you can borrow up to 80% of the valuation of the property or 80% of the purchase price, whichever is lower.
  • Investors you can borrow up to 70% of the valuation of the property or 70% of the purchase price, whichever is lower.

This may vary between lenders and will also depend on the location and type of property.

I have a site and I am planning to build my own home – will I be able to get a mortgage?

Mortgages are available for self-build customers subject to you meeting all the usual criteria.

Borowing 100% of the build cost is possible if you own the site already or it has been gifted you. Otherwise the above loan to value figures apply. Our advisers will be able to give you all the details.

What is the difference between the Interest Rate and the APRC?

The Interest Rate is the actual rate at which interest is charged on the amount you borrow.
APRC stands for Annual Percentage Rate of Charge. A lender is always required to quote the APRC when advertising a loan or borrowing rate. It is a standard interest rate calculation designed to reflect the total amount of interest that will be paid over the entire period of the loan..

What insurances will I need to take out with a mortgage?

There are two main types of insurances that you need to have in place before the lender will issue your loan. These are Life Assurance and House Insurance. You may also want to consider Income Protection. Our advisers will be able to advise on what policy best suits your needs.

What other costs are associated with purchasing a property?

Legal Fees:
You will need to choose a solicitor to act on your behalf. Some solicitor’s fees can start at €900, not including VAT and outlay. It is worth shopping around to get the most competitive quote available. We have a panel of solicitors we are happy to recommend.

Valuation:
A valuation report must be completed for the lender. The standard valuation fee is €150.

Surveyors Fees:
A structural survey is not required by the lender (unless the valuation report states that a survey is required); however, for your own peace of mind we would recommend organising a survey on the property. Fees for a structural survey are approx. €400 but can vary between firms.

Stamp Duty:

Stamp Duty rates on land and buildings
Type of property Consideration Rate of Stamp Duty
Residential First €1 million 1%
Residential Excess over €1 million 2%
Non-residential - 6%*

For further information on Stamp Duty click here https://bit.ly/2Mjpoy2

Advice First Financial fees: 
As we work for our clients and not for the lenders, we do charges fees for our services. These are listed in our terms of business. We are happy to discuss our fees with you.

What Interest Rate options are available?

Variable Rate:
Your monthly repayments may rise and fall as interest rate changes over the life of the loan.
You have the option to make early or lump sum repayments without any penalty.
You can switch to a Fixed Rate at any time.

Fixed Rate:
Your repayments will stay the same for an agreed period. Some lenders offer up to 10-year fixed rates. This gives you the peace of mind of knowing that your monthly repayments are fixed and protects you from interest rate increases. Fixed rates are generally higher that variable rates.
A breakage cost may be incurred if you wish to pay a lump sum or switch to a variable rate during the fixed term.

Split Rate:
You can opt to split your loan between variable and fixed.

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Who can I contact for advice and further information?

Please contact a member of our Mortgage Team to discuss our Mortgage FAQs or any other mortgage queries on

074 910 3938Email us

 

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