How much can I borrow?What types of mortgages can I choose from? What is tax relief at source?What is mortgage interest relief?How long will it take me to get my mortgage?What is Building Insurance?Do I need life insurance?What is an Indemnity bond Fee?What interest rate options are available to me?How much will it cost?What Insurance cover do I need?What is Stamp duty?What is a Property valuationCan I get approval for a mortgage before I find my property?How much can I borrow?
The amount your mortgage provider will lend you is based on your salary, bonuses and commissions. Each lender will have its own formula for calculating how much they will lend to you.
The maximum amount you can borrow is 92% of either the property value or the purchase price - whichever is the lower. Repayment terms vary between 5 years and 35 years depending on your age.
To find out how much you can borrow click here.
Back to TopWhat types of mortgages can I choose from?
There are a wide range of different kinds of mortgage you can opt for: Repayment, Tracker, Endowment, Pension, Interest only, are just some of the wide range of mortgage products available.
Repayment Mortgage
This is the most popular mortgage and is also known as an annuity mortgage. Your monthly repayments are made up of both interest and principle i.e. the interest due on the borrowings plus a portion of the actual amount borrowed i.e. the principle. In the early years of a mortgage, borrowers tend to pay back more interest than principle. However this trend is reversed in the second half of the mortgage life, where more principle than interest is paid off.
Tracker mortgage
A tracker mortgage is a repayment mortgage with an added commitment from the lending institution that the interest rate will not move more than a certain percentage above the European bank base rate. Generally, this product is highly recommended as it is transparent and good value for money.
Endowment Mortgage
This is an interest-only mortgage. The principle (the original sum borrowed) ,is repaid by taking out a policy with an insurance company. Each month, you will make two payments - one to cover the interest on the loan, the second to cover the premiums on the insurance policy.
Endowment mortgages while still sold, do attract their sceptics. With volatility in equity markets in the past, there have been a number of cases both in Ireland and the UK where the value of the policy on maturity was less than the original principle borrowed. In this case the customer has to make up the short fall - through their own savings or through borrowing.
Pension mortgage
This is an interest-only mortgage, with the principal being paid off through a pension plan. A pension mortgage only an option for someone who is either self employed or in non-pensionable employment.
A personal pension plan is designed to pay a tax-free lump sum on retirement in addition to a monthly pension income. It is the lump sum that is used to repay the mortgage debt. The advantage of this type of repayment method is that the pension contributions attract tax relief at the saver's highest rate of tax.
Back to TopWhat is tax relief at source?
Tax Relief for home mortgage interest is now available "at source". This means that the tax relief element on the mortgage interest will be "built into" your monthly mortgage repayment and will no longer be given through the tax system. The onus is on the lending institution to make the return on your behalf.
Any future adjustments in the tax relief (for example, arising from changes in interest rates) will be made automatically by the lender. It will not be necessary to claim relief in the annual tax return or to contact your tax office.
Back to TopWhat is mortgage interest relief?
This is a tax relief you are entitled to on mortgage interest payments.
Back to TopHow long will it take me to get my mortgage?
This very much depends on your own time frame. We at NC Mortgage Brokers will work around the clock to make sure your loan cheque is issued with expedience. To get started, why not give us a call or Make an Enquiry.
Back to TopWhat is Building Insurance?
All lending institutions will require you to take out buildings insurance on the home you are buying. A building insurance policy covers you in the case of damage being caused to the structure of your home i.e. through fire, natural disasters etc. Different building insurance policies offer different types of cover and different costs of cover.
It is prudent to take out contents insurance as well, so your contents are protected as well as your buildings. The cost of home insurance varies depending on the insurer. NC Mortgage Brokers will negotiate with all leading insurance companies to source you the best deal possible for building only and combined building and content cover.
Back to TopDo I need life insurance?
Life insurance is a legal requirement by the lender when you take out a mortgage.
If you were unable to work for some reason for example, you lost your job or were unwell for a long period of time, it is crucial that you are still able to make payments on your mortgage.
Because of this many lenders insist you obtain life cover (also referred to as “term assurance” or “life insurance”) when you take out your mortgage. You may also want to consider taking out critical illness cover, which would pay off your mortgage if you suffer an illness which would affect your earning power, such as a stroke or cancer.
Back to TopWhat is an Indemnity bond Fee?
No indemnity bond fee applies if the property purchased is your main residence.
Back to TopWhat interest rate options are available to me?
What is a Variable interest rate
With variable interest rate loans, the amount of your repayment will increase and decrease depending on changes in the base interest rates set by the European Central Bank. In other words if European rates go down and this decrease is passed on by the lender, you will benefit through lower monthly repayments. If on the other hand rates go up, and again this is passed on by the lender, your monthly repayment will also increase.
What is a Fixed interest rate
With fixed rate loans your mortgage repayments remains constant for a set period of time. This can vary from 1 year to 10 years.
Fixed rates offer greater security to borrowers, certainly in the early stages of a mortgage. However there is a caveat. If you have a fixed rate loan, and you decide to pay your loan back early or change to a different interest rate offer, you will have to pay an “early redemption fee” for terminating your fixed rate agreement. This redemption fee can be substantial.
Rates based on Loan to value Ratio (LTV)
Loan to value ratio is essentially the amount you borrow against the actual value of the property. Whilst most lenders will allow you borrow up to 92% of the property value, others will reward you with a lower rate if you borrow less.
What is a Split Rate
A split rate is where a portion of your mortgage is on a fixed rate and the other portion is on a variable rate.
Back to TopHow much will it cost?
At NC Mortgage Brokers we shop around to find you the lowest possible mortgage deal. We will negotiate with the different financial institutions to source you the most competitive mortgage to suit your needs. To find out roughly how much you can expect to pay back each month click on our How much will it cost calculator
Back to TopWhat Insurance cover do I need?
It is mandatory to take out both building cover on the property you intend buying and life cover on your own life.
Back to TopWhat is Stamp duty?
This is a tax payable to the government when you buy a new or second-hand home. However, in certain circumstances, you might not have to pay it. (New homes are exempt from stamp duty provided they are owner occupied and the floor area is less than 125 metres square). All other properties incur stamp duty.
Back to TopWhat is a Property valuation
To assess the value of the property a registered valuer must complete a valuation report on your property. This is a prerequisite for all lending institutions before they issue a loan offer. The cost of this valuation depends on the value of the property and the minimum costs you can hope to incur will be €127 plus VAT @ 21%
Back to TopCan I get approval for a mortgage before I find my property?
Yes. NC Mortgage Brokers will help you to find the mortgage that suits you before you have found a property, and then to get an Approval in Principal from a lender. An approval in principle can be helpful in getting the mortgage process underway, but the lender won’t make a formal mortgage offer until a valuation has been carried out on the property you wish to buy.
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