It's your Mortgage Day!
On a daily basis we hear a number of mortgages myths that we would like to bust. Here are some of the most common ones.
Although it’s the biggest financial commitment you’ll ever make, you’re not necessarily tied to sticking with the mortgage provider you opted for at the time.
It’s always worth checking whether a different mortgage provider could make your life easier, and could save you money in the long term. Switching mortgages may be a great way to save money on your current repayments with many customers
’ saving considerable amounts by switching.
Another myth is that you’ll never get a mortgage if there’s evidence that you’re spending money on things you don’t need or cannot afford. For example spending a lot of money on travel or gambling is noticed in your bank account. These are an issue only if it’s frequent, if you place bets you can’t afford, or if your mortgage advisor thinks it might impact your mortgage repayments.
The same goes for spending money on ‘silly’ things. We all do it, so go out and have a good time! Just make sure to follow your budget and to do it all in moderation.
Just because you are self-employed does not mean you can’t get a mortgage. It just means there are different criteria to be met and different documents needed. If you are self-employed you’ll need to provide KBC with a copy of your audited accounts for the two most recent financial years. The accounts must be audited by an accountant acceptable to KBC and signed by directors and accountants. We also require a copy of your two most recent tax returns (P21 or Form 11 and Chapter 4 Revenue Cert). We will also need a minimum of 6 months business bank statements.
This isn't true. The amount an applicant can borrow is based on a number of factors including your income, rent you're currently paying and how much you have saved. Our mortgage specialists will be delighted to support you on all aspects of your mortgage application. In fact, we are seeing more and more single applicants in the past few years.
No, you don’t have to wait until you find a property before applying for a mortgage. We can provide you with approval in principle for a mortgage amount even before you’ve found a suitable property. This approval in principle lasts for 6 months and enables you to start your house hunt with confidence.
This is another myth that is not the case; your rent is taken into consideration when you are being assessed for a mortgage. It allows us to see what you might be able to afford in mortgage repayments and also demonstrates to us your repayment capacity. In the same way the savings you make every month are looked at when determining affordability.
This isn’t true. If your approval runs out before you’ve found a suitable property to buy, come and talk to us. Extending your approval can be really easy if your circumstances haven’t changed significantly.
This is a common myth with people believing it is better to rent than to buy. In nearly all the cases we see, the monthly mortgage cost is lower than if the property had been rented as a whole.
This may not be the case. First Time Buyers can apply for a mortgage with a 10% deposit, regardless of the value of a property. This means that first-time buyers may be able to borrow up to 90 per cent of a value of a home.
Read more about being a First Time Buyer on our dedicated First Time Buyers page.