Buying your first home is without a doubt one of the most important decisions you can make. Whether you’re a couple wishing to start a family or a solo professional seeking to settle into a space to call your own, the moment you finally get the keys is a day you won’t forget in a hurry. Getting a mortgage in Ireland as a single person follows the same steps as those for couples or multiple applicants. If that is you, let us take you through the process from start to finish. We understand that the prospect of getting your mortgage can be daunting- but it doesn’t need to be!
Did you know that almost 30,500 First Time Buyer mortgages were approved in 2023? If it can happen for them, it can happen for you, too.
Step-by-Step Guide to Mortgage Approval
Step 1: Evaluate Your Finances
Before applying for a mortgage, review your finances. Calculate your income, expenses, and any outstanding debts. Determine how much you can afford to borrow and repay each month. As early as possible, start to be mindful about your outgoings and the way you manage your account/s. Lenders evaluate the way you handle your finances including the type of purchases you make, how often and the amount spent.
Step 2: Save Your Deposit
Lenders in Ireland require a deposit, typically 10% of the property’s purchase price. As a single person, we would recommend that you try to save more than the required deposit to reduce the amount you need to borrow. Ultimately, the longer you can save, the better. Remember that the bank will lend you 4 times your gross income. For example, if you make €50,000 per annum, you can borrow €200,000.
Step 3: Check Your Credit Score
Your credit history plays a crucial role in mortgage approval. Although the banks will routinely carry out these checks when they receive your application, it might be worth doing yourself, especially if you have concerns about a past debt. You can receive a credit report from the Central Bank of Ireland.
Step 4 Reach Out to a Broker
Using a mortgage broker, like SMART Mortgages, has several advantages over directly approaching a bank for a mortgage. Brokers work with multiple lenders, providing access to a broader range of mortgage products and rates. They offer expertise, guiding you through complex mortgage options and offering personalised advice. Brokers save time by gathering quotes from different lenders and presenting the best options. They have negotiation power with lenders, potentially securing better terms. For more information on working with us, visit us here.
Step 5: Research Schemes
Always take advantage of any additional help you can get by researching the schemes available in Ireland. Here are two that are worth looking into, but bear in mind, they are for newly built houses or apartments.
Help to Buy Scheme: The Help to Buy Scheme gives a refund of the income tax and Deposit Interest Retention Tax (DIRT) you have paid in Ireland for the 4 years before the year you apply.
First Home Scheme: The First Home Scheme (FHS) is an affordable housing scheme, which supports you in buying a new home or building your first home.
Step 6: Get Mortgage Approval in Principle
Before house hunting, it’s advisable to get a mortgage approval in principle (AIP). This indicates how much you can borrow based on your financial situation. It’s not a guarantee of a mortgage, but it helps when making offers on properties.
Step 7: Find a Property
Start looking for properties within your budget! Consider factors like location, size, and amenities. Once you find a property you’re interested in, you can make an offer.
Step 8: Formally Apply for the Mortgage
Once you’ve found a property and your offer has been accepted, you can formally apply for the mortgage with your Broker. At this stage, they should already have the necessary documentation, including proof of income, bank statements, and identification.
Step 9: Property Valuation and Legal Process
The lender will conduct a valuation of the property to ensure it’s worth the amount you’re borrowing. They will also carry out legal checks. You will need a solicitor or conveyancer to handle the legal aspects of the purchase.
Step 10: Receive Mortgage Offer
If everything checks out, the lender will issue a mortgage offer outlining the terms and conditions of the loan. Congrats, you’ve just bought a house!
So, is it really more difficult to buy a house as a single person?
Although the process is the same, a single person, with a single income, won’t be able to borrow as much as a couple. However, by getting in touch with a Broker as soon as possible and knowing what schemes and initiatives are available to you – you can find your dream home like anyone else.
Using the SMART Mortgages Process
Securing a mortgage can feel like a scary task. At SMART Mortgages, we’re committed to streamlining this process, making it simpler and faster for you. One way we achieve this is through our user-friendly online application system. Applying for a mortgage online offers convenience for those with busy schedules. We understand that traditional applications often demand extensive paperwork. That’s why we’ve developed a secure online portal where clients can easily upload the necessary documents. From there, we handle the application process with the banks on your behalf, ensuring a smoother experience for you.