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Mortgage Application
Testimonials >> "It’s never to late to get started in the property game and if you want advice on mortgages, etc..."-Brian O’Reilly (Dublin)
F.A.Q.
Why should I use the services of Lucas Mortgage Finance?
How much can I borrow?
What is a Repayment Mortgage?
What is an Interest-Only Mortgage?
What is a Tracker Mortgage?
What does a Credit Check involve?
What Insurances do I need and why?
Q: Why should I use the services of Lucas Mortgage Finance?
A: If you are buying your home, then you are considering what may be the biggest financial commitment of your life. The range of financial options can be confusing and there are product changes nearly every week. Lucas Mortgage Finance can advise on all the available options, recommend what’s best in your circumstances and implement the agreed plan for you. As a one-stop-shop, we advise you on all the latest rates, maximum borrowing amounts, repayments and the pros and cons of fixed versus variable rate options.
Q: How much can I borrow?
A: Your total current income will determine how much you can borrow. Most lenders calculate your borrowing ability by reference to how much of your take home pay will be used to pay the mortgage and personal loans. We will help you calculate how much you can borrow, but a very rough guide is to set a ceiling of 40% of your net monthly pay to service all loans. Higher incomes can use a higher percentage. The maximum loan-to-value is usually 92% of the purchase price, although most lenders have reduced this maximum since the start of the “credit crunch”. Lenders are now more cautious than before and are looking closely for good banking histories and savings.
Q: What is a Repayment Mortgage?
A: This is the standard mortgage - simple, straightforward and effective. You make a monthly repayment, made up of capital and interest (like any personal loan) and over your chosen term it is paid off in full. It is also called an annuity mortgage or a capital plus interest mortgage.
Q: What is an Interest-Only Mortgage?
A: Your monthly repayments to the lender cover only the interest portion of the loan (i.e. you do not repay any of the capital borrowed). This means that your debt does not reduce.
Q: What is a Tracker Mortgage?
A: The rate is determined by the ECB's (European Central Bank) base rate, the rate at which lenders borrow their money. The Tracker Mortgage is a variable rate of interest with a fixed margin set on top of the ECB rate. This margin is guaranteed for the life of the loan. When the ECB rate changes, the mortgage rate will immediately change accordingly i.e. it is always tracking the actual cost of funds plus the lender's pre-set margin.
Q: What does a Credit Check involve?
A: Most banks and building societies in Ireland are members of the Irish Credit Bureau (ICB). All mortgage applicants are screened by the lender through this Bureau. The ICB record a rating of your previous repayment history with all of their members. If you experienced any arrears with previous loans repayments then the ICB record will probably show this. A bad rating could result in a refusal on the part of the lender without further explanation.
Q: What Insurances do I need and why?
A: (1) Mortgage Protection
This repays the mortgage in full in the event of your (or your partner's) death during the term of the mortgage. A mortgage protection policy covers the amount outstanding at any given time during the life of your mortgage. So, as your borrowings reduce, so does the level of cover. We can pick and help you choose the most competitive Mortgage Protection policies available for you. Alternatively, you could (and we would recommend should), take out a Life Policy instead. A Life Policy differs from Mortgage Protection in that the amount of cover does not reduce with the amount owing over the life of the mortgage term. So, should you die in say Year 24 of a 25 year mortgage, the same amount will pay out which will pay off the last year's loan repayment and the balance goes to your family or estate. The main point is that Life Cover is very affordable when you are young and healthy and gets progressively more expensive as you get older. Therefore, it makes sense to buy it as cheap as you can get it.
(2) House Insurance
The loan cheque will not issue until there is adequate insurance on your property. It is also advisable to insure your contents.
(3) Income Protection
This is not compulsory but, depending on your employment situation, could be a very prudent investment by you. If your income reduces drastically or stops altogether due to you being sick, this policy will pay you a regular income until such time as you are able to resume work.