Question of Finance: I'd like to buy a house but are the banks lending?
Q Due to the good value to be had in the property market with the downturn, I've decided that now is the right time to purchase my first property.
I've a steady job and a good-sized deposit put aside, but I've heard conflicting stories about whether the banks are lending at the moment. Are the banks lending?
A With the banks taking such a cautious view on property values and their reluctance to lend to people who are not in secure, long-term employment, it is becoming extremely difficult for anyone trying to get a mortgage.
The majority of mortgage lenders claim that they are open for new business, but the underwriting criteria for lending approval has tightened up considerably, in particular when it comes to employment and salary, with not many loan approvals being issued.
Another big problem is job security -- candidates that are in permanent employment are preferred by most lenders.
Prior to this, people on contracts or a strong candidate on probation might have been considered.
Not surprisingly, certain sectors of employment are almost completely excluded, from tradesman to architects, some retail sectors and all those with property-related incomes are experiencing above-average difficulty in trying to secure a mortgage.
It's imperative that when you are applying for a mortgage to either knock on the door of every lender or get a mortgage broker to do it for you.
To give you any chance of securing that mortgage, it's very important that when you're submitting your mortgage application it be fully prepared and have every piece of supporting documentation with it so that your loan application will be viewed in a positive light.
- Ciaran Phelan, chief executive, Irish Brokers' Association.