Mortgage Approval in Principle from a mortgage broker or lender gives prospective buyers an idea of how much they would be approved for based on the information they provide about their finances. This usually gives a reasonable indication of the type of mortgage you might be able to get but there is a lot more to an application process that can delay or lead to a declined proposal.
As such, I try to dig much deeper at application stage to make sure that there are less surprises and delays further on in the process. There have been instances where people have received approval in principle quickly with a financial institution, but have contacted me months into an application where they are still being asked to clarify information regarding their application.
Documents required when applying for a mortgage
If your application is approved in principle, the following are examples of documents that you might also be asked to provide:
If you are a PAYE employee, you will typically need to provide:
- Your most recent P60 (original)
- A Certificate of Income (a standard form provided by the bank for completion by your employer)
- Your last three months payslips
- The last six months bank account statements
If you are self-employed:
- Your last two years’ certified/audited accounts
- The last six months business bank account statements (if business account is not with that bank)
- Your accountant’s or auditor’s written confirmation that your personal/business tax affairs (PAYE/ PRSI/VAT) are up to date
- Your management figures for the current trading year
- You may also be required to provide identification documents and confirmation of your address. This is usually a current valid passport or driving licence and recent utility bill.
Additional costs in purchasing a property
Valuation: Before you draw down your mortgage, the property will need to be independently valued by a professional valuer – you should expect to pay a fee of between €150 and €250 plus VAT, but this can vary.
Legal fees: You will need to pay legal fees to your own solicitor. As part of your own arrangement you need to agree with him or her whether this is a flat fee or a percentage of the purchase price.
Stamp Duty: Stamp duty will also apply to the purchase. The current rates are 1 per cent of the purchase price up to €1,000,000 and 2 per cent of any value over that.
Insurance/assurance: You will also need life cover and home (buildings) insurance – the costs of these can vary depending on your requirements and circumstances. Life and buildings cover will need to be in place before you draw down your mortgage.
Mortgages of up to 35 years are available to first-time buyers. Terms of up to 30 years are available to those trading up or down. Irrespective of whether you’re a first-time buyer or a mover your mortgage term must not go past age 70.