Tuesday 21 November 2017

10 myths about mortgages, busted

There are a whole slew of myths about mortgages muddying the waters out there. So here’s some clarity on the most popular ones.

1. You’ll be punished for that shopping splurge or holiday

While you will have to supply bank statements for at least three months to show your saving capacity, some people say that you’ll be punished for dipping into your savings. The important thing is the frequency and scale of spending for your savings, if you’ve tapped your savings for a good reason this shouldn’t work against you. What the banks will be looking for is your ability to recover from your spending. So it’s ok to spend if you need to, but you’ll have to show that you had the discipline to tighten your belt and achieve you saving goals despite the setback.

2. You won’t get a mortgage if you’ve backed Ireland to win the Rugby World Cup

Lenders can take a dim view of regular online betting. So if you’re withdrawing cash at a casino ATM or betting on the Premier League week in week out, then that will definitely work against you. However, the occasional flutter on the Grand National or backing Ireland to win the Rugby World Cup, well no one will hold that against you.

3. Single people won’t be approved for a mortgage

When applying for a mortgage you’ll be assessed on your ability to make repayments and your loan record only. Whether you’re in a relationship or not is your business. If you can supply proof of your income, saving record, rent repayments and demonstrate an ability to pass the ‘payment stress test’ designed to predict possible rises in repayments then that’s good enough.

4. You only need to apply for a mortgage once you’ve found a house you like

Some people think that a mortgage lender will want to inspect the property you wish to buy in order to ensure the soundness of your investment, this is not the case. You would be better off applying for a mortgage to see how much you are eligible for and being armed with approval for a set amount before you start looking. It will save you time and possible heartache in the search for your home.

5. You need to be a long-term customer of a bank before they will consider you for a mortgage

The bank you’ve been with since you started university? If you approach them for a mortgage they will treat you no differently than if you walked off the street. Talk to lenders about what they are offering and get the best possible deal for the biggest financial decision you’ve made so far. EBS will meet to talk mortgages anytime that suits you, early morning, in the evening or even at the weekends.

6. Self-employed people won’t be considered for a mortgage

Self-employed people will be considered for a mortgage providing they can provide three years of audited accounts.

7. Mortgage lenders aren’t interested in talking to you unless you tick all the boxes

There’s no harm in applying, if you get a negative response, at least you’ll get feedback about where your application fell down. So give it a go, you might be pleasantly surprised.

8. If you take a mortgage out over 35 years you are tied to that term

Thirty five years seems like a long, long time. However, taking out a loan over this period will keep your initial payments down and with the other costs and extras associated with buying a home that can be most welcome. But circumstances can change for the better. Maybe you’ve finished paying off your car, or maybe you’ve come into some money and you would like to pay down your mortgage. That won’t be a problem at any time.

9. A fixed rate mortgage is poor value in the current economic climate

Interest rates are at an all-time low. But that means interest rates on a fixed rate mortgages are also low. The thing about a fixed rate mortgage is the stability it gives you and while your repayments may be lower with a variable rate the fixed rate product gives you peace of mind. There is great value in that alone.

10. You have to get on the property ladder or you’ll lose out in the long run

You should only consider buying a home when you’re absolutely sure you want to make an investment for the future. Racing to get ‘on the property ladder’ can often blind first time buyers to the risks associated with buying a house in the Irish property market. As we all know, process of houses can go down as well as up, and that possibility should be very much factored into your decision to buy. Regardless of what a house is worth on the market, what is it worth to you?

Thinking of buying your first home in Ireland?

Don't forget to check out the EBS First Time Buyers Guide.

You can also use our mortgage calculator to find out how much you may be able to borrow.

And to chat through your mortgage options book a 30 Minute Mortgage today!

The content of this article is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS Ltd.

EBS Ltd neither accepts nor assumes any responsibility in relation to the contents of this blog and excludes all warranties, undertakings and representations (either express or implied) to the fullest extent permitted under applicable law.

EBS Ltd is regulated by the Central Bank of Ireland.


EBS Ltd is regulated by the Central Bank of Ireland.

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