Second Subsequent Buyers
So, you’ve outgrown your first home and need to trade up! Whether you are climbing the property ladder or your family has expanded, we are here to help.
The criteria for second time buyers is very similar to those for first time buyers. The main difference is you now generally need a larger deposit of 20% as opposed to 10%. For example, if you are looking to buy a house worth €400,000, you will need to pay a deposit of €80,000. For most people, this deposit will come from the equity on the sale of their first home.
Why use Financial Sense when applying for a Mortgage?
Using a Mortgage Broker such as ourselves saves you the time and hassle involved in going directly from Bank to Bank or Lender to Lender. We will take this difficult and cumbersome process away from you personally through the work of a dedicated Mortgage Adviser, Yvonne Walsh, who will liaise with the lenders and guide you simply through the Mortgage process step by step.
Buying a house and getting a Mortgage can be a challenging process with many people finding it very stressful and time consuming. Working with Yvonne will make your life easier as she will answer any questions you may have and ensure that the process runs as smoothly as possible.
We deal with a select number of Lenders who have very competitive interest rates. We can advise you on the best interest rates available from these Lenders and which ones are most likely to approve your application based on their Lending criteria.
At Financial Sense, we deal with the following Lenders:
• Haven (AIB)
• Finance Ireland
• ICS Mortgages
Approval in Principle
Before you start looking at properties, you ideally need to have ‘approval in principle’ from a Lender. This lets you know how much you can afford to bid on a property and allows you to spend your time in a more focussed manner. Indeed, many auctioneers will require you to have this approval in principle in place prior to viewing or bidding on properties.
What do lenders base their decision on?
- Income: Lenders will look at the annual income of each party to the mortgage. Some may take bonuses, overtime and other additional employment payments into account.
- Existing Mortgage & Personal Loans: Lenders will want to see what balance is left on the existing mortgage when compared to the value of the property. This is known as the ‘equity’ in the property. They will also want to see what other loans or debts you have and they will need to know if you intend on paying these off with the sale proceeds from your property
- Employment status: A lender will look at whether you are in permanent employment or on probation. If you work on contract they may require you to be employed for at least 12 months with the same employer or be on a second contract with the same employer.
- Residential status: Are you a resident in Ireland or moving to.
- Outgoings: Lenders will take your other financial commitments, such as childcare, into consideration.
- Money management: Lenders will look at your bank statements and assess things like ability to meet direct debits and standing orders, if you are using an overdraft facility on a regular basis, if there is evidence of excessive use of online gambling etc.
- Savings: Is the 20% deposit covered by the sale proceeds? If not, the Lender will want to see what level of savings you have in place and will want to see that you can save on a regular basis.
- Credit history: This shows your track record of paying other loans in the past. A poor credit history can prevent you from getting a mortgage.
- Property value: The purchase price of the home you want to buy (if you have one in mind) and the value of your current home.
- Amount you wish to borrow: This is the amount you apply for and is the difference between the purchase price of the property and the deposit.
- Number of applicants: Are you borrowing by yourself or with someone else? Full details will be required for all parties to the mortgage
- Age: What age you are now, what age you will be when you retire and/or when the mortgage ends.
You will need to complete an application form and supply a number of documents such as the following:
- Proof of Identity – Passport or Driving Licence
- Proof of Residence – A recent utility bill* *No more than 3 months old e.g. ESB, telephone, Credit Card Statement
- Employment Detail Summary (previously known as the P60)
- Payslips – 3 months up to date payslips
- Salary Cert – this is completed and stamped by your employer
- Bank Statements – 6 months original continuous Current Account Bank Statements for both personal and business bank accounts (the latest dated within the last 3 months)
- Existing Mortgage – Mortgage statement for current property
- Balance of Funds – Estimated value of current property and likely profit to be made from sale plus 6 months continuous savings statements, if applicable
- Credit Card Statements – 6 months continuous original Credit Card Statements
- Existing Loans – Minimum 6 Months Statements for any borrowings held
Additional items For Self Employed:
- Accounts – Last 3 years Audited/Certified Accounts and Tax Returns
- Form 11 – for last 3 years
- Chapter 4 – for last 3 years
- Tax Affairs – Letter from Accountant confirming tax affairs are up to date/tax clearance cert
You also need to satisfy relevant credit checks potentially including those from other countries if you have lived outside of Ireland in the past.
First Time Buyers Help to Buy incentive
You may be able to use the Help to Buy incentive to help you with the deposit for a newly built home or a once-off self-build. This scheme provides a refund of income tax and DIRT paid over the previous four years for people who have bought or self-built a new residential property between 19 July 2016 and 31 December 2021 up to certain limits and within certain criteria.
Need Some Guidance?
Call us on:
Tel: (059) 913 3800
For Mortgages of €100,000 or more, we charge a fee of €350 including VAT. For Mortgages less than €100,000 we charge a fee of €500 including VAT.
WARNINGS: In accordance with the provisions of the Consumer Credit Act 1995, the following are for your attention:
WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT. THE PAYMENT RATES ON THIS HOUSING LOAN MAY BE ADJUSTED BY THE LENDER FROM TIME TO TIME.
Note: The above notice in respect of adjustments to repayment rates will not apply during any period when the loan is at a fixed rate.
In accordance with the provision of the Consumer Protection Code (CPC) 2012 the following are for your attention:
WARNING: IF YOU DO NOT KEEP UP YOUR REPAYMENTS YOU MAY LOSE YOUR HOME.
WARNING: IF YOU DO NOT MEET THE REPAYMENTS ON YOUR LOAN, YOUR ACCOUNT WILL GO INTO ARREARS. THIS MAY AFFECT YOUR CREDIT RATING WHICH MAY LIMIT YOUR ABILITY TO ACCESS CREDIT IN THE FUTURE.
The following warning applies in the case of variable rate loans:
WARNING: THE COST OF YOUR MONTHLY REPAYMENTS MAY INCREASE.
The following warning applies in the case of fixed rate loans:
WARNING: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED RATE LOAN EARLY.