We got some experts to answer your mortgage questions!
Since 2018, we have been hosting fun and informative first-time buyer summits and brunch clubs. And our last two virtual events were a wonderful success, with guests logging on to listen to property experts and have all of their burning questions answered.
We have decided to pull together some of the most useful mortgage questions and answers from the last event and share them with those of you who are thinking about (or in the process of) getting onto the property ladder and becoming home-owners.
Here are some of the most useful bits to come out of the Q&A portion of our last AIB Livin Dublin event.
How long do you need to have on your employment contract to qualify for a mortgage with AIB? Is less than a year too short?
"We would recommend you're in your current employment contract for 1-year minimum however there can be times where we can look at a shorter time period. For example, if the norm for your employment was to work on contracts and you can show a history of working consecutive contracts. E.g. Social workers tend to work back to back contracts. "
Can overtime be factored into income in the application if it is substantial? E.g. a young doctor. Also, how are independent contractors viewed in the application process? Do you request tax statements from previous years to see income?
"Yes, we can take overtime into account. Regardless of whether you're an independent contractor or a PAYE applicant, we will look for your most recent three years tax returns. If your overtime is a consistent feature of the job we could take up to 50% of the average of your last three year's overtime earnings and add this to your basic income."
Because of Covid-19, my employer is receiving government support to pay part of my salary. Does that affect my mortgage application?
"We can now provide you with a conditional Approval in Principle document if you're in receipt of the Covid subsidy. This means that you can get approval and use this document to go house hunting, know your budget, etc. We review every case individually and carefully consider individual circumstances."
Do you have to have an account with AIB to get a callback?
"No. Simply drop into your local branch, ring the phone line or use our website to get in touch and a mortgage advisor will be happy to talk to you."
If you don't bank with AIB does that put you at a disadvantage?
"Everyone is treated the same. The only disadvantage is that we won’t have any accounts on file for you so it will mean gathering more statements for the application."
Does it make any difference when it comes to Approval in Principle if you do not have an account with AIB?
"No, everyone is treated the same."
If you're planning to buy within the next year, is it too early to meet a mortgage adviser?
"I would recommend talking to a mortgage advisor now. The earlier you talk to an advisor the better off you will be as they will guide you on your accounts, if you need to amend any savings, tidy up accounts, etc. They will also give you an idea of paperwork required so you will be in good shape when you put in a formal application."
What if we decide to sell the property before the end of the mortgage?
"There are no issues around this. Your solicitor will lodge the sale proceeds to the mortgage account to clear the debt. Once the debt is cleared, the mortgage account is automatically closed and the process for the release of deeds is put in train. If you're on a fixed interest rate there can be a breakage cost, so I would recommend talking to the mortgage department when thinking of doing this to get all the up-to-date information before selling so there are no surprises."
Can I use part of the mortgage to make small renovations in the property?
"Yes, this is called a Purchase and Renovate Application. We would need to know you're thinking of doing this at the start as it's a little different to your normal turnkey property. Depending on the renovations, we would usually release a portion of the funds for the purchase part of the property and the remainder in stage payments as renovations are carried out. Again, it depends on what renovations are required."
Keep an eye out for some more answers to some interesting mortgage questions coming soon!
To keep up to date with all the top first-time buyer tips and upcoming AIB Livin Dublin events, check out our bespoke hub here.
Lending criteria, terms and conditions will apply. Allied Irish Banks, p.l.c. is an authorised agent and servicer of AIB Mortgage Bank u.c. in relation to the origination and servicing of mortgage loans and mortgages. Allied Irish Banks, p.l.c. and AIB Mortgage Bank u.c. are regulated by the Central Bank of Ireland.