How do you get a mortgage for the first time?

0:00Lunge Time Live with Andrea Gilligan on News Talk. Mortgage Applications, where do you start? Will Connor McGowan, who's the manager and director of Finance Solutions, which is Ireland's biggest mortgage broker, will hopefully be able to shed some light for you today? 08708-0800-106 of the WhatsApp number. Connor, you're very welcome in the studio, first of all. For anybody thinking of starting this process, what is the first starting point? Thanks very much, Andrea. Thanks for having us. Well, first of all, I'd say it's never too early to start. So I think that the first thing to do is to gather and touch with the mortgage broker and find out what your options are. A five-minute conversation will give you what you need to gather in terms of documentation. And then they will bring you through the process and give you an indication of what you might be able to borrow. I think it's important to say, particularly in first-time borrow market, which is 60% of the total market,

1:03the banks are landing, and everybody's circumstances are different, but the earlier you get into the process, the earlier you'll get an indication of how much you'll be able to borrow and chase that frame of home ownership. Most people will be able to gather mortgage. I mean, you might not get what you want, but as was at what point, are you not eligible together? I think, sorry, in our business, one of our things is that we never say no, we may say not yet. So it's a question of what state will prepare this year at. So that's why I say to engage early is the right thing to do. You may need to build some savings. You may not be there yet. So the banks will land 90% of the value of the property. So you need to have 10% to pause a port together. There are various ways of doing that through savings through we see plenty of gifts from family, but there are also government schemes there that can help you with that also. So it's a question of having that deposit ready, showing the affordability that you can't afford the repayments on whatever that mortgage is. But again, as I say, if you engage early,

2:04you can get to those things very quickly and build a plan. People always talk about rent a clear loan, credit cards, car loans, maybe they're not renting in advance of going to go and look for a mortgage application. Are they thing, do they weigh heavy on the lenders? It depends on how you're managing them. If you've got a good financial history, then that's OK. To be fair to the lenders, they want people to be able to afford to live. We all have different outgoing as well. So they want people to be able to live. So if you have a credit card, you have a car loan, as long as you're managing them appropriately, that's not an impediment to getting a mortgage. So 10% is your deposit if it's your first time buying a property. And the lending power is now, it's four times your salary, as well. Yeah, so the lenders will typically land four times your salary if you're single, applicant are both salaries if you're a joint applicant. But there are exceptions to that also.

3:04So what we would do is look at a case and see what people are looking for if they've identified a property, how much we can get them, what the best right we can get them. And then maybe it is that we go looking for one of those exceptions to really get them that little bit extra that they need. And who's getting exemptions, Connor, because prior to this, when it was previously three and a half times, there was a certain number of exemptions that were handed out. Is that still happening now that the rules have jumped to four times? So the rules for first time of ours are four times, for second time of ours, three and a half. So those rules haven't changed dramatically. I think what has happened is that we've seen that the rules work. And I think that those cases that can get an exception, the banks can land 15% of their total by exception above that four times rule. So again, each case is different. So when that case comes in, if it is that we need to look for an exception, that's what we're going to look for it then from whichever lender has the capacity to do it at that time. To do that. If you're somebody that's maybe you're already in a property,

4:05you're now looking at a drawn in a mortgage on something else who you're going to sell, there's some slight changes to this. Sorry, so there's an increase. But just deposit, sorry, an increase deposit, I should say. Sorry, so 10% is still what people need to show. But the multiple for a second time, by our three and a half times rather than four times, that's the difference there. So it's 10% still for second time buyers. OK, 087, 1400, 106 is the WhatsApp number. Listen to questions on this. We're planning to move and sell our house in three years time. We need a significant deposit to move in as a second time buyer. Would you advise that we pay off the existing mortgage or put it towards saving for a deposit? No, I think it depends on what circumstances there are three years time. It's a bit of a crystal ball. But I think the thing to do is if you can manage your mortgage today and build up additional savings, depending on what type of property you want to look for in three years time, it may be that having that additional cash will help you

5:07if it's a house that needs refurbishment. A lot of people investing in retrofitting, etc. So it may be that that cash is more useful to you at that time rather than paying down the mortgage today, if the mortgage today is management. This listener, Connor, is wondering, my salary is 40,000 a year, but I want to buy in Dublin. Can I apply for an exemption to borrow more? Yes, you can, yeah, absolutely. As I say, each case is different. But if you talk to a good broker, they'll be able to bring you through the what's available in that space. Obviously that four times multiple, but then being able to get so much extra, perhaps depending on the circumstances. Look, when you look at people that are applying for the first time, Connor, what mistakes, what are the general mistakes or the things that people don't put enough weight on? So I think the most important thing that we would say to people at the very beginning is to get their documentation together. So you need to have your six months bank statements, your loan statements, etc. Right? You need to show that you've got good financial behavior.

6:08I think the mistakes people make is that they think they're on the road and they go, that's grand sure I'll go and take out a loan for a car and that as well. And then that brings them back to the start again. So it's really that financial behavior is the thing that we probably see people making most mistakes on that they, they, you really need to be disciplined for that period of time between when you apply and when you draw down. You need to continue your savings, you need to continue to manage your finances in a way that you're not missing direct efforts, you know, you're not going overdrawn where you don't have an overdraft facility. There are the things that people typically, it's six months, sort of prep work, isn't it? Six months of really good financial behavior when you get to there. Do I need to give my revenues or count details along with the buy-sitments? Yeah, everything. Everything, yeah. Because when the lander sees movement out of your main account, your primary account, they want to know where that's going and what's happening. Yeah, so the revenue statements, revenue statements as well. They have to be taken into account in the same major bank. As a 50-year-old and a 60-year-old,

7:10how long can we get a mortgage for or is our age going to be a factor? So it is a factor although less so than maybe it was in the past. There are landers there that will lend into retirement. But what you've got to be able to show is that you have that for repayment capacity in retirement. So, you know, they will look for things like pension statements and watch your pension will look like going forward if you're not going to be able, if you're not going to be working past 66 or 67 or whatever happens to be. But there are absolutely options out there. Okay. Email in from listener who says they're a worried parent, Connor. My daughter and her partner have been saving for the last two years, they're both living at home. She works in retail but is also training to become a teacher. Part of this training consists of teaching and schools that's unpaid. At the moment, she's in the middle of a five-week stint. Next January, she'll be in a 10-week stint. Obviously, she has to take time off her paid job to do this work and is unable to save during that time period. She will be qualified next April though. My query is should a house come up for sale during this period would her bank disqualify her due to this broken period of her savings,

8:13even though she's no choice? No, again, I think it's very difficult to get into a particular case. But I think, you know, if they're showing good financial behavior at the moment and being able to show that over a period of time, that'll all counts to be fair. You know, landers are willing to lend. They're not looking to try and catch people out. They're looking to help people get on the ladder. So I think once it's well presented, absolutely, we can get over those. I mean, the one thing about that kind of canvas, the banks know what the running power is going to be if they're willing to teach and jobs. Absolutely. They're showing ambition and whatever. So again, it's about putting that packaging, packaging that case in a way that gives the lander the best opportunity to say yes. Just a final question. I'm 50 and a first time buyer and trying to buy my brother out of the family home. I need to raise 160 grand to be able to do so. Is there any help for me buying a second hand home and being a first time buyer? Yeah. So again, there are options available there

9:17in terms of government scheme, the shared equity scheme, for instance, where the government takes a stake in the property. And that can help. But also, again, I would say, you know, talk to somebody there and get some advice because there are lots of options to be able to help that person get that it's not a substantial mortgage, if it's 160,000 in terms of the, it sounds like probably not in terms of the value of the property. So again, I would say seek independent advice in that. Yeah. Okay. So there is some there there will be some options for that for that candidate. Email is launchtimelive.newstalk.com. For the moment, Karam Agauin, managing director of finance solutions, Connor, thanks a million for joining us here in studio today to answer listener questions.