Are you interested in getting a mortgage but don't know where to start? You're not alone!
A mortgage is one of the biggest commitments and most important decisions you'll ever make. That's why we've put together a 7-part video series to help you make the best choices at this exciting time.
Episode 4 explains the mortgage application process in an easy-to-understand manner. Watch it below!
New episodes of the series are released every Monday. You can watch previous episodes on the bonkers.ie YouTube channel. New episodes of the series are released every Monday.
MW: Hello and welcome to another episode of our Guide To Getting A Mortgage in Ireland. I’m here with Dave Curry of the Irish Mortgage Corporation and today we’ll going to be talking about what you can expect from the mortgage application process.
So Dave, in our previous videos, we talked about what people can do to prepare themselves an application process and today we’ll be talking about the application process itself.
So, what are the first steps in the mortgage application process?
DC: Well, the first step would be to contact a mortgage advisor, either a broker or a mortgage advisor in a bank and have a discussion about your possible application.
MW: Ok, so just say it’s a broker that I’m going with in this example, when I start speaking to my broker, what are they going to do to dig a bitter deeper to make sure that I will actually be approved?
DC: They’ll do a preliminary assessment, often over the phone, where they will go through the basic details, personal details, employment, income, financial etc. and really they’re trying to establish will the application be viable, does it have a good chance of being approved.
MW: Will there be any documentation required of me to help determine wither or not I will be viable?
DC: Once they have established that it looks positive then they’ll send a checklist of documentation for you to submit and that will be for a more formal assessment, so that will be documents relating to your employment, financial information, personal details, identification, that sort of thing.
MW: When it becomes time for me to actually go and start speaking to the banks, what will the broker do in that scenario?
DC: When you’ve submitted your documentation to the broker, they will do a much more detailed assessment and will come back to you with options, what they think is the likelihood of getting approval from certain banks, and a recommendation ultimately. And with your permission or instructions they will make an application to one or more lenders at that point.
MW: Ok, and at that point can I go and start shopping for a new home?
DC: Not just yet, what you’re looking for from the banks is approval in principle. Typically it takes anything from about five to ten working days for the approval in principle to come and at that point they will come back to you and let you know if you have been approved and if so, for how much.
MW: If I’m happy with my approval in principle and the amount I’ve been approved for and I go and start looking for a house, what happens if I can’t find a house that feels right to me in the first couple of weeks or couple of months?
DC: Well, typically the approval in principle will last for up to six months, so if you can’t find a house within that period of time, then you will to reapply whether to the existing bank that you have the approval in principle from or to a new bank which may be a better option at the time. So, it’s very important that you don’t have any major changes in your circumstances, and don’t change jobs, don’t take out any loans and also to keep up all of the good habits that helped you to get the approval in principle in the first place.
MW: We’ve talked about good habits there, what are the things that people should not do when considering applying for a mortgage?
DC: Well, for example, they shouldn’t start by buying a house! Often people will go shopping for house, make an offer, have it accepted, and then they’ll come looking for a mortgage and often they won’t be able to get it approved for what ever reason. So, the starting point is, get your approval in principle, then you know what your limits are, then you’re free to go out shopping for a house at that stage.
MW: Dave, thanks very much for telling us a bit about what the mortgage application process looks like.
In our next videos, we’re going to talk about what happens after you’ve got approval in principle, such as your loan offer and the closing stage. So be sure to tune in to those. And you can see our previous video linked in the comments below also.
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