House Movers

Moving home can be a big task to take on board between putting your house on the market, applying for a mortgage and the house hunting process. With that, we hope to alleviate some of the pressure on you in relation to the mortgage aspect by being your advocate when dealing with the banks and streamlining the process for you. Also, based on our experience working alongside one of the main estate agents, we can offer some insight in relation to the process of buying and selling houses, too. We have outlined some of the most popular questions below from our clients, however if you have any other queries, please feel free to contact us.

All sources of information correct as of 01/01/2023.

1. How much do we qualify for?

From 1st January 2023 the mortgage lending rules in Ireland state that second-time buyers can qualify for a mortgage of up to 3.5 times their salary/combined salaries*. This is not an automatic guarantee because all banks must take your current circumstances into account when assessing you for a mortgage i.e., the number of dependents that you have, your age, the term of the mortgage required, any existing personal/car loans or family commitments and your demonstrated affordability over the previous six months. Your circumstances could reduce the mortgage amount that you qualify for but in general, the rule of 3.5 times your income is a good guide to work with.

*https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures

2. We own a property in our home country overseas and have a mortgage on it but never owned a property Ireland, are we first-time buyers or second-time buyers in Ireland?

Unfortunately, not. The banks in Ireland will consider you a FTB if you have never held nor currently hold a mortgage in Ireland or outside Ireland. A first-time buyer is specifically linked to whether you held or hold a mortgage anywhere in the world.

We own a property in our home country overseas and have a mortgage on it but never owned a property Ireland, are we first-time buyers or second-time buyers in Ireland?

3. We don’t have a mortgage on our current home and want to move house, are we second-time buyers?

The banks in Ireland will consider you a FTB (first -time-buyer) if you have never held nor currently hold a mortgage in Ireland or outside Ireland. They will also consider you a first-time buyer even if you own 10 properties but never held nor currently hold a mortgage on any of the properties that you own or previously owned. A first-time or second-time buyer is specifically linked to whether you held a mortgage or not.

4. What deposit do I need?

From 1st January 2023, as a rule, you need to contribute a deposit of at least 10%*. This means that if you are purchasing a property costing €300,000, you will need to contribute at least €30,000. This can come from the sale proceeds of your existing property, savings and/or a family gift. You can also contribute more if you wish but you cannot break the 10% deposit rule. *https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures

5. What is the right bank for you?

3.5 Times your income could be different with each bank because each bank treats your income differently. For example, if part of your salary includes bonus payments, commission payments, car allowance credits, health benefit credits, stock income, premiums for weekend work, overtime and shift allowance, each bank looks at this differently. Some banks may take all your extra income into account, and some may not. Therefore, your variable income could be your leverage in terms of increasing the mortgage amount that you qualify for depending on which bank you proceed with. Finding the right bank for you is our job.

6. Can we borrow more than 3.5 times our income? We heard about exemptions, what exactly are they?

In certain circumstances the banks may be able to offer you a higher mortgage than 4 times your income* with effect from 1st January 2023. This is called an exemption. The banks may be able to offer you a mortgage of say, up to 4.5 times your income or more. These exemptions are not freely available, while the banks also only have a limited number of exemptions that they can give out. In addition to this each bank will have their own policy regarding this and may require your situation to fall within specific parameters in order to qualify for an exemption. Some banks may not even lend any exemptions as part of their policy.

*https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures

Can we borrow more than 3.5 times our income? We heard about exemptions, what exactly are they?

Wrapped vintage gift box with red ribbon bow, isolated on white

7. Can I get a gift for all the 10% deposit?

In general, the banks prefer to see some savings from you, however as a second-time buyer the banks are generally little bit more relaxed about gifted funds for the deposit. The reason why the banks are more relaxed regarding gifted deposits for second-time buyers as opposed to first-time buyers is because as a second-time buyer you have already demonstrated your ability to pay a mortgage back whereas a first-time buyer has not.

8. Can I purchase a property with 100% of a mortgage?

If you qualify for a mortgage of 1 million Euro and you are seeking to purchase a property costing €300,000, you will still have to pay a deposit of 10%* (effective of 01.01.2023). This means the maximum mortgage on this property can only ever be 90% i.e., €270,000 in this case. This is a rule set by the Central Bank of Ireland and cannot be broken.

*https://www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures

Can I purchase a property with 100% of a mortgage?

We own a property in our home country overseas and have a mortgage on it but never owned a property Ireland, are we first-time buyers?

9. Can we retain our existing property (and the mortgage on the property) and possibly rent it out when we move house and take out a new mortgage?

Yes, in short. Each bank has their own policy regarding this which means that some banks are better for this than others. Finding the right bank for you can make a big difference.

10. Divorced or separated, are you classed as a second-time buyer?

From 1st January 2023 people who are divorced or separated and who previously were named on a mortgage can qualify for first-time buyer status in certain circumstances*. The main circumstance is where they have not benefited from the sale proceeds or the equity of the property in any way and would e considered under the ‘fresh start’ status. Otherwise, they will be generally classed as second-time buyers.

*https://www.centralbank.ie/news/article/central-bank-announces-targeted-changes-to-mortgage-measures-framework

Divorced or separated, are you classed as a first-time buyer?

11. My partner had a mortgage before we met. If we go for a mortgage together, can we use my first-time buyer status?

If you are a joint couple and one person is a FTB and the second person is not (i.e., the second person previously held or currently has a mortgage), the joint application will be deemed as a second time buyer application because one of the applicants has or had a mortgage. This means that second-time buyer lending rules apply. The reason for this is because it is deemed that the second time buyer may have benefited from the sale or equity in the property currently or previously owned. However, with effect from 1st January 2023, if the second-time-buyer qualifies under the ‘fresh-start’* status, your application may be classed as a first-time-buyer application.

*https://www.centralbank.ie/news/article/central-bank-announces-targeted-changes-to-mortgage-measures-framework

12. I bought a house with my brother/sister years ago and now I want to buy my own home and let my brother/sister stay in the house but it is affecting how much I qualify for. Is there anything that be done?

Yes, each lender views this differently. As you are named on the mortgage you are fully liable for the mortgage. This means that the banks will not view that your brother/sister has taken over the mortgage because they are paying the mortgage, you are still legally liable for the full mortgage. This is the challenge that most people in this situation find themselves and it is inhibiting them from moving forward. However, there are some lenders that are more flexible regarding this, and they want to support you. We work alongside these lenders.

I bought a house with my brother/sister years ago and now I want to buy my own home and let my brother/sister stay in the house but it is affecting how much I qualify for. Is there anything that be done?

13. I am still on my probation period in my new job, can we apply for a mortgage or do we have to wait until it is completed?

Yes, you can apply for a mortgage in most cases. A lot of the time, the banks will condition for your probation period to be completed before your mortgage funds issue/collect the keys to your new home. Generally, the timeframe from submitting your mortgage application to completing the purchase of a house takes a few months which means that you may naturally have passed your probation period by the time you are due to collect your keys. The banks will simply require a one-liner from your employer to confirm that you have successfully passed your probation period, then they will issue your mortgage funds.

For certain professionals, some banks could waive this condition. It all depends on your overall profile, your employment sector, your job role, your length of service in your previous job etc. In these cases, we would approach the most suitable lenders at the start of the process for you in order to give you the certainty that you need.

14. I am going on maternity leave, can I take out a new mortgage?

The banks will first look at it in this way – you are possibly seeking mortgage funds to issue while you are on maternity leave (and even on unpaid leave). This can leave the banks with no guarantee that you will go back to work at the same terms as before because they are unable to see it in your bank statements and payslips. If they are using your income to calculate how much you can borrow, they want to be sure that you will still be on that same income when you return to work. Therefore, in general the banks will ask that the mortgage funds will issue when you are back at work i.e., they will let you progress to formal contracts but will seek a payslip at the very end and before they issue any mortgage funds in order to confirm that you are back at work on the same terms (the same salary, not part-time on taking parent’s leave). Although, the banks can waive this condition sometimes depending on your profession, length of time with current employer and industry. We know the best way and the best banks to approach regarding this.