We know from experience that buying your first home is more than just getting your loan approved by a lender. It can be a scary process, so many decisions and so many unknowns especially in the current climate. We aim to put you at an advantage over the banks by helping you to “get mortgage ready” and ensure you get your YES when needed!
What First Time Buyers need to know:
There are 7 mortgage lenders in the First Time Buyer Market
A 10% deposit is required for all purchases regardless of the purchase price. For example, if you are buying a property at €250k will require a TOTAL deposit of €25k PLUS LEGALS & 1% STAMP DUTY.
New Central Bank of Ireland restrictions are now in place in relation to ‘Loan to Income’ and ‘Loan to Value’. A ‘Loan to Income limit of 3.5 times gross annual income applies to all new lending for main residences.
DEFINITION of a First Time Buyer according to the Central Bank of Ireland…”A First Time Buyer is defined as a borrower to whom no housing loan has ever been advanced. Where the borrower under a housing loan includes more than one person (as in a couple!) and one or more of those persons has previously been advanced a housing loan – then NONE of those persons are considered a First-Time Buyer.” SO, in plain English, if you and your partner are NOT married and one of you HAS had a mortgage before in the past and the other hasn’t, then you are BOTH considered NOT TO BE FIRST-TIME BUYERS.
EXEMPTIONS – there are a proportionate level of mortgages that the lenders will allow to EXCEED the LTV and LTI caps under the new regulations, however, this is now built into the lenders calculators and the outcome only known at initial enquiry stage. The CBI Rules for Lenders are that:-
- 5% of the value of new lending to first-time buyers will be allowed above the 90% LTV limit for those buyers;
- 20% of the value of new lending to second and subsequent buyers will be allowed above the 80% LTV limit for those buyers;
- Up to 20% of total lending for primary (first-time, second and subsequent buyers) can exceed the LTI limits
Room Rental Income is no longer taken into consideration
Some Lenders have a minimum property value in rural areas of €70,000
Maximum term is between 30 – 35 years – up to a maximum age of 65 yrs with some lenders and 70 for other lenders
Minimum incomes – Single Applicant –€20k –€25k and Joint Applicants –€25k –€45k
Minimum employment history – usually 1 year minimum – two lenders will consider 6 months+
N.B. If RENT paid prior to mortgage application – please ensure this is paid by Standing Order or regular internet transfer and NOT CASH (minimum 6 months). Otherwise the Lenders may not include your rent in your repayment capacity and you may fail their lending criteria, unless full cash withdrawals for rent are visible on Bank statements.
Newstar FM are Independent Mortgage Brokers. For more on First Time Buying contact Tara at firstname.lastname@example.org