PROOF. The Mortgage Guide

Transcription

1 For the attention you deserve M&E Curtin (Financial Services) Limited T/A MC Financial is regulated by the Central Bank of Ireland The Mortgage Guide Buying a home is one of the most exciting ventures anyone could undertake. It is vital that you have a clear understanding of the process involved. MC Financial have designed this guide to aid buyers through the purchase process.

2 MC Financial Mission Statement Our Mission Statement To accommodate our clients with the best possible advice and solutions to their mortgage financing needs. Our Goal To be recognised as the leading and most reputable mortgage brokerage company in our geographical marketplace. We believe that by providing home ownership opportunities to people in our area we are making a positive impact in our community. For the attention you deserve Managing Director Michael Curtin QFA Michael Curtin

3 Meet The Team. Michael Curtin Robert O Neill Brian Courtney Michael has worked in the Financial Services industry for over 16 years holding numerous positions from Mortgage Specialist to Directorships in different Financial Houses. In 2013 Michael founded MC Financial to provide personal and business financial products from a wide range of providers. Michael specialises in mortgages and has a wealth of knowledge and experience in researching the market to find the right mortgage for you. If you are seeking clear and impartial mortgage advice contact Michael on or Robert is a Senior Financial Advisor at MC Financial having joined the company in early He has ten years experience in financial planning having worked as a Financial Advisor for Irish Mortgage Corporation, Canada Life and O Neill Financial Services. Like all of our advisors Robert is a fully Qualified Financial Advisor. You can contact Robert directly on or Brian is a Business Specialist at MC Financial having joined the company in June He has 16 years experience in financial institutions, having worked as a Private Clients Advisor for Irish Mortgage Corporation, Financial Adviser for Canada Life and a Business Development Manager at Ulster Bank. You can contact Brian directly on or

4 Contents Our Services Key Criteria Top Tips 8 steps to purchasing a property New Central Bank guidelines Variable and Fixed Mortgages Budget Planner Jargon Buster Testimonials

5 Our Services Mortgages Mortgage Protection Life Cover Family Cover Income Protection Serious Illness Cover Accident Cover Business Protection Pensions Group Pensions Group Schemes

6 Key Criteria. Secure PERMANENT employment at least 6 months prior to applying. History of regular savings and rent payments (minimum 6 months.) Evidence of repayment capacity (as your advisers we need to clearly demonstrate in our lender recommendation that you can afford your mortgage repayments even if interest rates were to increase by 2 %.) Good Credit History: It is really important all payments on existing and previous loans and credit card payments been made on time. If you are not sure you can order your own credit check on and then speak with one of our advisors Minimum personal debt, credit cards should be cleared monthly. General prudent spending habits no online gambling and try to keep banking straightforward e.g. one current account and a savings account.

7 Top Tips When Purchasing Property. 1. Only consider taking out a mortgage if you are happy that your income is secure and continuous. If you have any concerns in this area DON T BUY. 2. Always use an independent advisor like MC Financial; we have years of knowledge and experience for your benefit with a wide range of experts to advise you. 3. Remember that if you deal directly with a lender, they will offer you their range of products only. 4. Before you begin looking at properties find out how much you can borrow, MC Financial can arrange this for you. 5. The amount you can afford can be assessed by looking at your current savings and rental payments. For example, if you are paying rent of 700 and saving 250 regularly this indicates you can afford no more than 950 per month. 6. Prepare WELL IN ADVANCE. Keep your current accounts well maintained, avoid credit card debt and other short term loans and save regularly. 7. Organise your mortgage protection as early as possible as this can cause delays at mortgage closing. Mortgage Protection provides a lump sum to pay off the balance of your mortgage in the event of your death. 8. Be VERY CAREFUL with introductory rates and always consider the rates that apply after the expiry of the discount period.

8 The 8 Steps To Purchasing a Property Explained. 1 Secure mortgage approval in principle. 2 Secure a Property & pay booking deposit. 3 Appoint a Solicitor. 4 Property Valuation & Survey. 5 Formal Loan Offer. 6 Sign Contracts & pay balance of 10% deposit *. 7 Organise closing documents. 8 Get the keys, Move in. * See New Central Guidelines page Step ONE Secure Mortgage Approval in Principle. You need to carefully calculate your budget before considering any property. You should complete our income and outgoings gs budget planner provided and this will give you an indication of what you think is affordable as a mortgage repayment each month. You will then need to calculate the funds at your disposal either from savings, gift from family or equity from the sale of your house if applicable. At this stage you should approach an Independent Mortgage Broker who will seek to optain approval on your behalf. Once your Mortgage Broker such as MC Financial has secured your approval in principle you will then know your budget and can begin your search.

9 Step TWO Secure a Property & Pay Booking Deposit. 2 Step THREE Appoint a Solicitor. 3 Once you have approval in principle we would suggest you then begin to look for a Property. There are many useful websites to aid your search including and When you discover a Property that you are interested in you should then contact the selling agent who will arrange a viewing for you. Once you are happy that this is the Property for you a formal offer can be made with the estate agent. As soon as your offer has been accepted you will then be asked to pay a booking deposit. This booking deposit can vary from a set figure of 5,000 to 5% of the value of the property. You will need a solicitor to take care of all the legal aspects of buying a home. Your solicitor will carry out all the necessary searches to ensure full ownership of the property can be passed to you and oversee this process. Solicitors fees vary and are normally a percentage of the purchase price. We recommend clients research these fees before appointing a solicitor. Once you have found your Property it is important not to delay in seeking formal mortgage approval. There will be specific documentation required such as photo ID, proof of address, proof of income and current bank statements. It is important to have this to hand to avoid unnecessary delays. Step FOUR Property Valuation & Survey. Mortgage Lenders require a valuation to prove that the property is worth the amount you want to borrow. A structural survey is an investigation inspection of the construction and services of a property in sufficient detail to enable the building surveyor to advise what impact its condition have upon the client. It is recommended that a structural survey is o4s 4 or ficient will organised prior to the purchase of the property.

10 Step FIVE Formal Loan Offer & Arranging Adequate Cover. Formal Loan offer is an offer from your financial institution 5offering to give you the mortgage after assessing all your relevant documents and the property valuation report. Before mortgage drawdown, you will need to have adequate Life Assurance and Home Insurance in place. Your Life Assurance will depend on the amount, term and type of mortgage that you have secured. Here at MC Financial we will ensure that you get the best advice available. We will do a full financial review to ensure you have adequate cover based on your individual needs. Step SIX Sign Contracts & Pay Balance of 10% Deposit. * Contracts will be drawn up by the vendors solicitors and sent to your 6 solicitors. Once your solicitor has checked the contracts and is 6ppy happy for you to sign the balance of 10 % of the purchase price is payable. At this point the property is not in your hands but you are almost there! * See New Central Guidelines page Step SEVEN Organise Closing Documents. Once unconditional contracts have been signed by you and the vendor normally a closing date is finalised. Your solicitor will have issued you statement detailing any outstanding costs to be paid including duty fees. Once this has been paid your solicitor will arrange to drawdown your mortgage and transfer funds to the vendors solicitor and you7you 7a stamp wn will become the official owner of the property.

11 Step EIGHT Get the keys, Move in! 8 You are now the proud owner of your new home, it is time to collect your keys from your solicitor and get moving! Generally you can expect your first mortgage repayment to come out of your account a mo8llect month after it has been drawn down.

12 New Central Bank Guidelines There are different limits for different categories of buyers: First Time Buyers You can borrow up to 90% on the first 220,000 of a residential property and 80% for any value above 220,000. Private Dwelling Homes (PDH) are subject to a limit of 3.5 times loan to your gross annual income. To qualify as a First Time Buyer you must not have previously purchased or built a house in Ireland. Non First Time Buyers Mortgages for non first time buyers are subject to a limit of 80 per cent Loan to Value. Buy to Let mortgages (Investment Mortgages) BTL mortgages are subject to a limit of 70 per cent Loan to Value. This limit can only be exceeded by no more than 10 per cent of the euro value of all housingloans for non PDH purposes during an annual period. Switcher Mortgages The Regulations do not apply to Switcher mortgages or refinancing of existing housing loan. Negative Equity Mortgages Housing loans for borrowers in negative equity who wish to obtain a mortgage for a new property are not within the scope of the LTV limits. However there are variables in terms of deposits and multiple incomes and exceptions are made on a bank by bank basis. We will be happy to go through your options with you based on your individual circumstances.

13 Types of Mortgages WARNING: IF YOU DO NOT KEEP UP YOUR REPAYMENTS YOU MAY LOSE YOUR HOME Standard Variable Rate Mortgage The Variable Rate Mortgage is a rate set and controlled by the lending institution that you are borrowing from. It gives the borrower a level of control in the sense that it allows you to manage your mortgage in a way that suits your own individual needs. You have the choice to overpay this mortgage/pay off lump sums. As the lending institution controls the rate they can increase or decrease it as they wish so your payment will fluctuate and follow suit. In general the lower the LTV on your property the lower the rate you will get. Fixed Rate Mortgage The repayment amount on your mortgage is fixed for a set period of time so you don t have to worry about any increases in the interest rate. However you do not get the benefit of a decrease in interest rates either. Once the set period of time has lapsed your mortgage will revert to a Standard Variable Rate. Split Rates WARNING: THE COST OF MONTHLY REPAYMENTS MAY INCREASE WARNING: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED-RATE LOAN EARLY An alternative option is to split your mortgage part fixed and part variable. You can choose the split % yourself and/or in consultation with your mortgage adviser.

14 Switcher Mortgages A lot of people are currently paying too much on their mortgages. In the majority of cases if a person is on a standard variable rate simply switching to a more competitive lender they can save thousands over the remaining term of the mortgage. There may be an option to release equity in your home to consolidate debt or do some home improvements. The upper limit for Re-mortgages is 90% of the value of your property. Re-mortgages were specifically excluded in the changes introduced by the Central Bank in early There are currently cash-back incentives to switch mortgage providers with some lenders ranging from 1,000 to 2,000. Similar to all other types of mortgage Life Cover to the value of your whole mortgage will need to be in place. WARNING: THIS NEW LOAN MAY TAKE LONGER TO PAY OFF THAN YOUR PREVIOUS LOAN. THIS MEANS YOU MAY PAY MORE THAN IF YOU PAID OVER A SHORTER TERM Self Build Mortgages This refers to houses built by direct labour or by a building contractor under a fixed price contract. This process generally takes longer than buying a completed property as there are a number of steps involved: Acquiring a site. Securing Planning Permission. Construction of the Property. Documents required: Copy of Fixed Price Contract or Self-Build Template completed, signed and stamped by a qualified architect/engineer or surveyor. Copies of architect s Professional Indemnity Insurance. Site Map & Plans. Standard Mortgage Documents Funds are drawn down by way of stage payments by your solicitor so that money is available to the builder etc. NO FUNDS WILL BE ADVANCED BY A LENDER UNLESS THE STAGE OF THE DEVELOPMENT HAS BEEN CERTIFIED BY A SUITABLY QUALIFIED ARCHITECT OR ENGINEER

15 Steps to Moving House Arrange a mortgage consultation to assess your options. Complete an application to receive mortgage approval in principle from a bank. Assign an estate agent. Secure a buyer for your home. Decide on a property you wish to purchase. Sign contracts with your solicitor. Move into your new home Standard Documents required: * 6 months bank statements including all credit card/loan accounts. Proof of savings. Evidence of employment/salary: For PAYE employees this will include 3 month s payslips, a P60 and a salary certificate. *These documents vary from lender to lender

16 Budget Planner Your Monthly Income Wages/Salary (after tax) Any other income (e.g. social welfare, rental, pension etc) Net Monthly Income Your Monthly Expenditure Mortgage/Rent Childcare and Maintenance All Insurances (car, life, health, household etc) Food, Groceries Household Bills (e.g. gas,oil, electricity,phone) Transport (bus, train, car loan, car tax, repairs, petrol etc) Entertainment (socialising, drinking, smoking etc) Personal Expenses (clothes, holidays etc) Miscellaneous Net Monthly Expenditure

17 Jargon Buster Approval in Principle: A document from a mortgage lender to show how much you should be able to borrow. You can use this to prove you can afford to buy a particular property you wish to make an offer on. It isn t a guaranteed offer at this stage. Annuity mortgage: this is a Capital and Interest Mortgage repayment loan. Affordability: A consumer s capacity to afford a house and repay their mortgage. Auction: A public sale in which goods or property are sold to the highest bidder. APR: (Annual Percentage Rate) this is the yearly cost of your mortgage. It includes other charges such as an arrangement fee as well as the interest on your loan. It also helps the consumer to compare like for like between mortgage providers. Arrears: If you fall behind on your mortgage repayments you are in arrears. Base Rate: A rate of interest set by the European Central Bank which tracker rates usually follow. BER: A building energy rating (BER) is an energy efficiency rating for homes. Breakage Cost: Normally there are penalties if you are on a fixed rate if you look to pay off a lump sum or pay off the mortgage early. This can vary from lender to lender and will be detailed on your letter of offer. Bridging Loan: a sum of money lent by a bank to cover an interval between two transactions, typically the buying of one house and the selling of another.

18 Buy to Let: Is a Phrase referring to the purchase of a property specifically to let out, that is to rent it out. A buy to let mortgage is a mortgage specifically designed for this purpose. Capital Gains Tax: A tax levied on profit from the sale of property or an investment. Consumer Credit Act: This is legislation to protect consumers. Conveyancing: The legal process of buying and selling a property. This can be done by a solicitor or specialist-licensed conveyancer. Cost of Credit: The difference between the amount you borrow and the actual amount paid back to the lender taking into account interest and other charges. Credit Bureau: This is where your loans history is stored. Debt Consolidation: is a form of debt refinancing that entails taking out one loan to pay off many others. Deeds: Official documents that prove ownership of a particular property. Deposit: the amount that will have to be funded by you at the outset to secure your mortgage and the property, minimum 10% of the purchase price. Drawdown: Drawdown refers to when you actually physically borrow the money from your mortgage lender. Equity: The difference between the current value of your property and the amount outstanding on your mortgage. Fixed-Rate Mortgage: A mortgage where the interest rate remains the same for a fixed period of time thus repayments remain static also. Guarantor: A mortgage guarantor guarantees that payments will be made if the borrower does not fulfil the mortgage obligations and payments. A guarantor is not on the title of the house or property and has no claim on the property.

19 Gazumping: Occurs when you have a verbal agreement with an agent or seller to buy a property at an agreed price but the property is not sold to you in the end. This usually happens when the vendor (the person selling the property) has decided to sell the property to someone else, usually for a higher amount. Home bond: When a home buyer purchases a home bond registered home they have insurance cover in relation to deposits, stage payments and structural defects issues Home insurance: Insurance to protect home and contents in cases of fire and theft. Interest only Mortgage: Is a mortgage loan in which, for a set term, the borrower pays only the interest on the principal balance, with the principal balance remaining unchanged. Income Protection: An insurance that protects your income in the event of accident or illness or injury. Land Registry: This is where the mortgage is registered against your property. Letter of indemnity: A written undertaking by a 3rd Party such as an Assurance/Insurance Company, on behalf of the Borrower to cover the 2nd Party (Bank or Lending Institution) against any financial loss, damage or death of the 1st Party (Borrower). Loan Offer: This is your formal loan offer setting out the terms and conditions. LTV (Loan to Value): Your mortgage amount vs the value of your property: e.g. your property is valued at 200,000 and your mortgage is 100,000 your LTV is 50%. Mortgage Broker: An intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages. A mortgage broker gathers paperwork from a borrower, and passes that paperwork along to a mortgage lender for underwriting and approval. Mortgage Protection: Also known as Life Cover that clears your mortgage on your death. Negative Equity: When the value of your home is less than what is owed.

20 Owner Occupier: Person who lives and owns the property. Overpayment: Making additional payments into a Loan. Payment Holiday: This is a period where you make no payments on your mortgage. While you make no payments interest will continue to be charged. Planning Permission: Formal permission from a local authority for the erection or alteration of buildings or similar development. PDH Private Dwelling Home: A person s primary residence, you may only have one primary residence at any given time. Portability: Where an existing mortgage can be transferred between properties when you move house. Rebuild Costs: The amount it would cost to rebuild your home if it is destroyed (by fire for instance). This is needed for insurance purposes. Redemption: To redeem a loan/ finish it off. Remortgage: Also known as refinancing is the process of paying off one mortgage with the proceeds from a new mortgage using the same property as security. This is also used to raise additional funds for home improvements weddings etc. Rent a Room Scheme: If you rent out a room (or rooms) in your home to private tenants, you can receive this rental income tax free, up to an annual limit of 12,000. Security: This is the property itself. Stamp Duty: A tax which is placed on a legal document usually in the transfer of an asset or property. Underwriting: Mortgage Underwriting is the process a lender uses to determine the risk (especially the risk a borrower will default) of offering a mortgage loan to a particular borrower is acceptable Variable Rate: A rate that your lender will charge you for borrowings, this rate is subject to fluctuation and repayments will not remain static. Valuation Mortgage: lenders will need confirmation of the value of your property to ensure it is in line with the level of borrowing. Vendor: Person selling the property.

21 Testimonials. Karen and Stephen Lovell (November 2014) Dublin We highly recommend Michael. He is honest, trustworthy and has an excellent knowledge of the Irish mortgage business. Donna Hilliard (January 2015) Dublin We are now proud home owners and it is all thanks to Michael. We would have no problem recommending Michael to anyone going for a mortgage. Ilona Bodnar (February 2015) Dublin Thanks to his knowledge, helped us pass the whole complex way since the first meeting, until handing the keys. I will recommend his services to anyone. Tomasz Jochimski (April 2015) Dublin Michael is an excellent financial advisor. He made the whole process of getting a mortgage very straight forward. All the problems were resolved without delay.

22 MC Financial holds agencies with the above companies. SPECIAL OFFER With every new Mortgage Clients Will Receive 2 Months Free Mortgage Protection * USE PROMO CODE AOIBHEANNS PINK TIE *Terms & conditions apply

23 Charity Fundraising Every time we close a Mortgage, issue an insurance policy or a Pension a donation will be made to AOIBHEANNS PINK TIE. The fund has become a big part of MC Financial staff life with the companies 1% contribution being further boosted by ongoing fund-raising activities and events organised by staff in all areas of the company. Welcome to Aoibheanns Pink Tie Hello and welcome to Aoibheanns Pink Tie we are working to build an organisation to help and support Children and their families during their Childs battle to beat Cancer. The idea comes from personal experience having witnessed how difficult it can be to keep home life as normal as possible during long spells in hospital and long periods away from the family home, all the focus is on the sick child of course, but there is a need to support Mam and Dad and the rest of the Children who may not understand what is happening to their Brother or Sister. The Key word to this is Practical support. To help the family in the most practical way for their personal requirement this may vary greatly from family to family. That is our Goal PRACTICAL SUPPORT. FROM ALL AT AOIBHEANNS PINK TIE

24 Any queries on the contents of this guide don t hesitate to contact a member of the team Michael Rob Brian to arrange a consultation Call or For the attention you deserve Michael Curtin QFA Managing Director Unit 9, Coolmine Enterprise Centre, Coolmine, Dublin 15 Office: l Mobile: Web: M&E Curtin (Financial Services) Limited T/A MC Financial is regulated by the Central Bank of Ireland DISCLAIMER: This guide is provide for information purposes only, and the information is correct as at 1st September 2015.