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How much can I borrow?
The amount that you can borrow is based on your annual gross basic income as well as any bonuses or overtime that you may earn throughout the course of a year. However, each lender has a different method of calculating the affordability and so there will be some variations between lenders. McNamara & Associates will help you to calculate your affordability with each lender through our knowledge of the lenders calculation methods. Having done this we will then find you the most suitable mortgage for your individual needs.
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What are the advantages of refinancing my current mortgage?
There may be a number of advantages that come with refinancing your mortgage. Many people who have mortgages which were taken out a number of years ago will have been offered the going rates at that time. With increased competition in the mortgage market, interest rates now vary greatly between lenders. Therefore, rates that may have been competitive a few years ago can now be well above rates being offered by other lenders. This has resulted in many people paying too much in their monthly repayments.
You may also wish to consolidate some short term loans in to your mortgage to ease a cash flow burden or simply release some equity to carry out home improvements.
McNamara & Associates will help you to review your current mortgage arrangements so that you can avail of the best rates and most suitable mortgage structure.
Warning: This new loan may take longer to pay off that your previous loans. This means you may pay more than if you paid over a shorter term.
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Do I need a deposit?
With the recent “Credit Crunch” that we have been experiencing, lenders have now removed the 100% mortgage product from the market (except for certain professional such as doctors etc).
The maximum mortgage now available is 92% of the purchase price of the property. This means that you will have to fund the remaining 8% of the purchase price yourself. This must be funded though an un-borrowed source such as savings or a gift.
The maximum mortgage for investment properties is less again and is usually around 80% of the purchase price depending on the lender.
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What is TRS and how can I claim for it?
Since 1 January 2002, tax relief for home mortgage interest (known as TRS) is now given at source. Mortgage TRS can be claimed in respect of qualifying loans secured on the deeds of your main residence i.e. a new mortgage, a top up loan, a home improvement loan, a re-mortgage or a consolidation of existing borrowings. The mortgage tax relief element on the mortgage interest is given, by your lender, either in the form of a reduced mortgage payment or a credit to your funding account. It is not necessary to claim mortgage interest relief in the annual tax return, and it no longer appears on your Notice of Tax Credits.
With each new home mortgage, you should be given a TRS1 form to complete which will be sent to Revenue in order to start claiming the relief. McNamara & Associates will help guide you through the process.
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Should I Fix my mortgage rates or choose a Variable rate?
The decision to fix your mortgage is very much dependent on each individual’s circumstances. Some people prefer to know that their rate will not change for the duration of the fixed period and therefore will not be affected by rate increase. This can help people to plan and budget for the future with greater certainty. On the other side of this, people who elect to take a fixed rate may miss out on the benefits that come with lowering interest rates.
The other issue that must be considered is the flexibility that is offered by variable rates as opposed to fixed rates. With fixed rates, there are usually penalties for any changes that you make in the mortgage arrangement. These may include, early redemption, changing the term of the mortgage, overpayment or breaking out of the fixed rate to take advantage of a lower variable rate.
It is important therefore that a full review is carried out on each case so that an appropriate mortgage can be designed around your individual needs. This is where the experts at McNamara & Associates can help to arrange the most suitable mortgage for you.
Warning: You may have to pay charges if you pay off a fixed-rate loan early.
Warning: The cost of your monthly repayments may increase – If you do not keep up your repayments you may lose your home.
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What is an Interest Only Mortgage?
An interest only mortgage is where your monthly repayments are made up of the Interest that is due on your mortgage loan. This means that you are not reducing the capital outstanding on the loan while the loan is interest only. This type of mortgage is commonly used for investment property mortgages or where people need to improve their cash flow position for a period.
Warning: The entire amount you have borrowed will still be outstanding at the end of the interest-only period.
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What is the maximum term I can take the mortgage over?
In general, the term of the mortgage that you can take is dependent on your age. Most lenders will allow you take a mortgage that will bring you to the age of 70 but limited to a maximum term of 40 years. For example, an individual aged 35 can elect to take a mortgage for a maximum term of 35 years which will bring them to age 70.
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What documents will the lenders require from me?
The documents required by lenders will differ depending on the type of mortgage that you are taking out. Below is a rough guide to the standard documents required for mortgage purposes.
Standard Mortgage Checklist Items
- Three recent payslips
- P60
- Salary Enquiry Form
- Mortgage Statement
- Loan Statement (if any)
- Evidence of Deposit/Savings
- Photographic ID
- Utility Bill
- Bank Statements(3 months)
- Confirmation of rental income
- Additional documents may be requested depending on the lender
Please note: The ID that is requested needs to be either a copy of your passport or drivers licence and a utility bill in each name. Each form needs to be very clear and readable.
ALL DOCUMENTS SUBMITTED MUST BE ORIGINALS
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What is a Pension Mortgage?
Pension Mortgaging is a relatively new type of mortgage. For some, it offers an extremely attractive method of arranging finance to purchase your home, residential investment property, home abroad or commercial property.
The basic concept with this type of mortgage is that you make repayments of interest only for the duration of your mortgage with the capital being repaid from the maturity value of your pension and ideally, from the tax free lump sum arising from the maturity value.
Through this type of mortgage, one can purchase assets now on the strength of the buying power of your pension at retirement age.
The cost of building this capital is tax relieved with tax relief on contributions made, tax exempt on growth and a tax free lump sum is available. This tax relief ensures that the cost of building the capital is much less than the cost of funding repayments under a normal annuity mortgage.
This type of mortgage requires careful and expert tax and financial planning and may not be available to certain type of pension holder.
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