EDUC Mortgages Blog

Get Mortgage Ready in 7 Easy Steps: A Home Buyer’s Guide

by | Mortgage Advice

If you are thinking about applying for a mortgage in the imminent to near future, this article is for you. Get mortgage ready and maximise your chances of mortgage approval success by ensuring your financial health and documentation are in optimal condition, following the 7 easy steps below.

What does Mortgage Ready Mean?

Being “mortgage ready” essentially means having your financial house in order and being in a strong position to successfully obtain mortgage approval from a lender. But what does it take to reach this pivotal stage and how do lenders in Ireland assess your mortgage readiness?

7 Steps to Mortgage Readiness

Follow these 7 steps and ensure you are mortgage-ready so you can strike when the perfect house presents itself.

1. Speak to a qualified mortgage broker: After carrying out a ‘fact find’, your mortgage broker will advise you on your current state of mortgage readiness and will make recommendations on any areas that require attention or action.

2. Build up your savings: Lenders will want to see evidence of monthly savings. For at least 6 months prior to applying for a mortgage, you will need to demonstrate your ability to save. Consider setting up a monthly standing order from your current account into a savings account – the more you can save, the better. Important! Do not dip into your savings. What goes in stays in until you’ve drawn down your mortgage.

3. Pay rent by bank transfer: If you are paying rent, avoid any cash payments to your landlord. Lenders must be confident in your ability to repay any mortgage loan and will look at a combination your rent and savings as evidence in this regard.

4. Reduce any short term debt: Based on advice from your mortgage broker, work towards clearing any short-term debts (e.g. credit cards or personal loans). WARNING! Never miss a credit card or loan repayment! This cannot be understated. Establishing a minimum payment plan for your credit card repayments is highly advisable. Ensure too that you have sufficient funds to cover all direct debits and standing orders on a monthly basis.

5. Maintain steady employment: You must be in steady employment for a lender to even consider approving a loan application and you also must have passed any probationary period before a mortgage loan can be drawn down. If you intend on applying for a mortgage within 6 months or you are currently in the application process, speak to your broker before changing your employment or altering any terms and conditions associated with your current employment (e.g. reducing your hours or job sharing etc.). Changing job or altering your employment contract could delay your mortgage application however, in certain circumstances, such a change could benefit you in the long run (e.g. an increase in salary means a potentially bigger mortgage loan). Your broker can advise you on the pros and cons, explain any implications, and help you make an informed decision.

6. Don’t take out any new credit facilities: Once you are in the process and working with a broker or directly with a lender, do not take out any short-term loans. Moving house is exciting and it’s hard not to start planning for a big move however it is vitally important that you do not enter into any new loan agreements (e.g. furniture, household appliances etc) until after you have drawn down your mortgage! The gorgeous sofa will just have to wait!

7. Think about where your deposit is coming from: First-time (and second-time) buyers must be able to pay a deposit of 10% of the property purchase price. Lenders will want to know where this deposit is coming from. Remember that you will also need to be able to demonstrate that you have sufficient funds to cover additional costs such as stamp duty, legal fees etc.).

Get mortgage ready with EDUC Mortgages

Our friendly team at EDUC Mortgages has been helping teachers and public sector workers get mortgage ready for over 20 years. Our personalised end to end mortgage service is tailored to your unique situation and our advisers can meet at a time and location that suits you. Speak to us today and find our how mortgage ready you are.

Contact us to arrange a no fee consultation and get mortgage ready to secure your dream home.