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Applying for a mortgage

What you need to apply for a mortgage
Having decided which mortgage is best for you, the next step is to submit your application.

The mortgage application form will ask for details of you, any joint buyers, your income and its source, your bank account, how you will fund the difference between the advance and the full purchase price and details of the property itself.

You will need confirmation of your earnings, either from your employer or in the form of three years accounts if you are self-employed.

Application fees are generally no longer levied. However, you will probably still have to pay the valuation fee of €80 to €140 and stamp duty on the mortgage document.

This is separate to the Stamp Duty on the property itself and is of the order of 25c per €200 on all mortgages over €12,000. Think of it as €1.25 per €1000 borrowed.

The same regulations apply to opening a mortgage account as to any other account in Ireland today. If you do not already have an account with the lender, you will need to supply proof of identity and proof of your address.

If there are no hitches, and the lender receives satisfactory responses to all of their enquiries, you should receive a loan offer within a couple of weeks.

However, there is a lot to do and lots of scope for hitches so you would be well advised to get this process under way before you have found the property you want to buy.

See the section on Loan Approval for information on getting Approval in Principle or use the calculators here to find out how much you can borrow and what it will cost.

How much?
How much you can borrow is subject to some fairly strict guidelines imposed on lenders by the Central Bank.

In summary, the guideline is that you can borrow up to 2.5 times the highest earner's income (including any regular overtime or bonus payments) plus once the second income if any. We provide a calculator here to help you work out how much you can borrow.

Most lenders also impose a maximum limit of 80% of the purchase price on the loan. Some lenders operate different criteria which may allow you to borrow more. For example, some will lend 3 times the main income plus 1.25 times the second income.

Others work out the amount you can afford to borrow based on the proportion of your income that would be required to make the repayments. For example they may base the maximum loan amount on what you could repay using 30% of your income.

The risk with this approach is that, should interest rates rise sharply, you could find yourself stretched to meet the repayments.

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Irish property