Mortgage lenders in Ireland and probably in other countries too – have tightened up the rules on who they lend to.
Here are some ways you can increase your chances of getting mortgage approval.
1. Pay off Loans
If you can – try and pay off any loans before you apply for a mortgage – even if it means waiting a few months. Any outgoings on loan repayments will reduce the size of the mortgage the bank will be willing to give you.
2. Avoid going Self Employed:
If you do have the choice of staying as an employee or going self-employed – it is worth sorting out the mortgage before you leave the job . Lenders will usually need 2 years worth of self-employed accounts to show your income . The days of self-certification mortgages, where a lender was willing to take your word on how much you earned each year, are gone.
3 . Improve your Credit Rating
All lenders will check if you are a good credit risk before they agree to give you a mortgage – and recently they have tightened up their credit scoring.
You can improve your credit history record by making sure you are on the electoral register. It also helps to stay with your current bank account provider for several years. The longer you have been at your current address, job and bank the better. More here on Checking Your Credit Rating in Ireland.
If you have never previously had any credit – it might be a good idea to take some on to prove you can be trusted. You could apply for a couple of 0% credit cards, spend a few Euros on them and then just pay them off in full by direct debit.
4. Approach your own Bank
There are some people who say it is not a good idea to borrow from the bank where you have your current account. This is because there have been some examples of banks moving money from customers current accounts to pay off debts . If you have nothing to hide – you may find that the bank where you have your current account is much more likely to give you a mortgage than a lender that has never met you before.
They can see how much money you have coming in and going out of your account each month.
5. Buy a House and not an Apartment
Lenders are likely to lend more on a house rather than a new build city apartment. They are worried about the resale value of the glut of new apartments – and are more willing to lend more on houses.
Find the Lowest Mortgage Rates in Ireland Here