What is the first step I should take when getting a Mortgage?
It is worth contacting a number of different banks to see what rates or incentives they are offering for those who avail of mortgages with them.
A mortgage broker can also help you with this and to estimate how much you can borrow and s/he will guide you through the application for the lending institution i.e. the bank or building society.
Lenders can vary in rates of interest (it is mostly variable rates being offered at the moment) and borrowing conditions and some will even have offers such as paying a portion of your stamp duty fees so it is worth looking at as many as possible.
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What is involved in applying for a mortgage?
A loan application will involve some or all of the following:-
o loan application forms,
o fire insurance,
o life insurance,
o standing order to Lender,
You will require a salary certificate from your employer and typically between three and six months payslips. If you are self-employed you will have to provide accounts for your business.
If you are building your property the bank will normally look for detailed costings to be submitted by your Engineer or Quantity Surveyor on the cost of the build.
Banks nowadays will usually offer a mortgage for between 90-92% of the price of the property which means that the balance of monies will need to come from your savings.
If your loan application is successful you will receive a formal “Loan Offer” from the Bank/Building Society. The Offer of Loan will detail the loan amount, interest rate, term of the loan, and the initial repayment. The Bank/ Building Society will forward a copy of the Loan Offer to your Solicitor and your Solicitor will review the documents with you.
Podcast: Getting A Mortgage
When I have made an offer, what is the next step?
A property valuation will be carried out by a valuer on behalf of the bank or lending institution, where you are receiving your loan from, to ensure the property is worth the amount you wish to borrow.
The various insurances will also have to be put in place as per your lender’s requirements. Your lender may offer to sell these insurances to you however you can again shop around if you wish to secure the best deal you can.
Do I need a solicitor when I am getting a mortgage- what do they do?
As soon as we receive your Loan Offer from your Bank we will establish contact with them. We have the responsibility to deal with the requirements of your Lender to make sure that they have adequate security.
They will ask us to sign a Certificate of Title which is a personal guarantee by us that the title is in order. What this means is that the bank will look for us to assure them that there are no issues with title to the property. If there are any issues these need to notified to the bank and the bank need to consent to them. This is a condition on which your mortgage is granted and it is important to ensure that it is complied with.
An area that frequently causes problems is Planning Permission.
If your house was built after the 1st of October 1964 we will have to ensure that we have copies of the Planning Permission. It is also necessary to obtain evidence that the Conditions in the Planning Permission have been complied with. This is done by Declaration from an Engineer or Architect who declares that he has inspected the house and the plans on foot of which the Planning Permission was granted and that the house was built in substantial compliance with the Planning Permission.
You may have built an extension, garage or shed since you first built or purchased your house. If so, evidence will have to be produced in the form of an Engineer’s Declaration that the extension was either exempt from the requirement to obtain planning permission or, if permission was required, a declaration that the conditions of the planning permission have been complied with.
If your house is served by a septic tank it will be necessary to arrange for an Architect or Engineer to inspect the property and sign a Certificate that the septic tank and the percolation area are located within the boundaries of your property.
Building Regulations came in to force on the 1st of June 1992 imposing rigorous standards for construction, extension and renovation works. From this date there is a legal obligation to comply with the Building Regulations in relation to all new buildings, alterations, extensions or changes of use. If you have carried out any work since this date an architect’s declaration of compliance or exemption in relation to the building regulations is required.
What else is involved in the process of getting funds?
Once our investigation of title is completed we will arrange for the legal documents to be returned to the Bank where they will be processed. Once the legal documents are processed and the bank are satisfied that you have complied with all of the conditions on the Loan Offer the loan cheque will be released to us.
Are there continuing obligations?
As well as making your mortgage payments each month for as long as the mortgage is in place you will be bound by additional terms which would include keeping all insurances up to date, notifying the bank if your financial circumstances change, and getting the consent of the bank if you want to sell, lease, transfer or get another loan on the property among others.