With the new year just around the corner, it may be time for you to begin thinking about how you can get mortgage ready for 2023, especially if owning a home in the New Year is your next big goal.
Being prepared for the year ahead will help you to put your best foot forward heading into a brand new year full of possibilities.
There are some great tips to consider when trying to get your mortgage organised and ready for you to go out and find your dream home.
Keep reading to learn more about some of the best tips we have for the best preparation for getting a mortgage loan in 2023.
1. Remember your deposit and stamp duty
It is very important whether you are a first-time buyer or a previous homeowner that you have the deposit necessary for the home you are looking to purchase.
In most instances, the deposit required for the purchase of a new home is 10% of the asking price, i.e, if the house is €300,000, you will require a deposit of €30,000, however, this can vary based on whether this is the purchase of your first home or if you have owned previously.
However, whether you are a first-time buyer or a seasoned home buyer, it can be a great idea to look at starting a savings scheme that works for you as it will be a great help in saving for the specific deposit you will require as this cannot be secured with the help of a loan.
Another payment you also need to remember to save for will be the stamp duty on your house.
Stamp duty is a tax put on houses at 1% of the value of the house up to €1,000,000 and 2% for anything above.
It is important to be aware of this tax in advance as you want to ensure that you will have the funds necessary to afford the level of stamp duty required for your home.
2. Demonstrate strong saving capabilities
There are a number of factors that will dictate the outcome of your mortgage loan application and how much you will be able to borrow.
Saving will come as no surprise, especially when we talk about preparing to own a home because it will help you to avoid being caught off guard by any payments you may have forgotten about.
Your ability to save will make a significant impression on a lender.
This is particularly because having the means to showcase that you are capable of saving consistently and frequently will instil confidence in the lender that you will have the ability to manage a mortgage loan.
Saving is a great initiative to start at any time, but what better incentive than a brand new year, helping you to kick 2023 off on the right path?
Remember, savings should also be set aside for other costs including solicitors fees, valuation fees and other ‘hidden costs’.
3. Maintain a good credit history
Maintaining a good credit history will have a significant influence on your success in obtaining a mortgage and is something to take a look at and take action to improve if necessary.
The main reason your credit history will be of interest to a lender is down to a matter of trust.
Your credit history is a clear indication of your ability to make payments promptly, especially where the payments are on a ‘buy now pay later’ basis and require you to be responsible for future payments, much like that of a mortgage loan.
Where your credit history reflects on you positively, your chances of getting a mortgage loan are much greater because your lender has clear proof of your level of responsibility.
4. Collect proof of your finances
A lender will need to be able to see your finances over approximately six months.
Again, as much proof as you can provide to instil trust in your lender that you will be capable and responsible enough to handle a mortgage loan will be required by the lender and help you go a long way in the approval process.
If you are starting on your journey to getting a mortgage loan, try to objectively review your finances and if necessary, proactively make an effort to tidy them up before applying for a loan.
5. Shop around for your mortgage
Shopping around for your mortgage is a really good way to make sure you know what a variety of lenders have to offer before you start to whittle down your options and submit applications.
It is important to note that you should proceed with caution when shopping for a mortgage as some advertisements can be misleading, for instance, stating that it is fixed or has a low-interest rate.
In this case, it is very important that you carefully read the terms of the agreement as this may only be for a short period, which may then change and increase drastically thereafter.
Our partners at Mortgage ABC have the technology to streamline your approval process, checking the market for you to find the best mortgage to fit your needs.
Mortgage ABC is not tied to any one mortgage provider, and has a very simple calculation and application process.
6. Get Approval in Principle (AIP)
Once you have completed the necessary research on mortgages and have your required documentation together, the next step will be to get approval in principle.
Getting approval in principle will allow you to gauge how much you may be able to borrow for a mortgage loan, which you can then use as a guide for when you start looking for your brand new home.
Before you draw down on a mortgage, a number of other things will then need to occur, including retaining a solicitors, getting a valuation and more.
7. Check your eligibility for government housing schemes or housing initiatives
Now that you have gotten as far as getting your AIP, you can officially being looking for your new home, now knowing how much you will be able to afford.
After getting your AIP, it may be worthwhile to look into some government housing schemes and the eligibility criteria as you may be eligible to apply for some schemes or initiatives to help you to find a home.
For example, our Summerfields development is part of the Waterford Council Affordable Housing Scheme – further details available here.
Some housing schemes will often require information on your mortgage and approval, so be sure that you have completed all of the necessary steps in the mortgage preparation and application process before applying for housing schemes.
Once you have gotten as mortgage ready as possible, you can let the house-hunting adventure begin.
We hope you have found our guide to getting you mortgage ready for 2023.