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09th Aug 2019

House buying uncovered: busting all of those scary mortgage myths



Brought to you by permanent tsb

As if buying a house wasn’t complicated enough.

Then it’s made even more confusing by the all of those myths and urban legends surrounding it. Ever heard of that girl who when on a Vegas Hen Weekend, had a little extra fun with her credit card, and was denied a mortgage for the rest of her life? What was her name? Jenny…something? Wasn’t it? Yeah, she doesn’t exist.

So calm down, first-time buyers. We think you’ve got more than enough on your plate so we decided to take the time to bust some of these myths right now.

MYTH 1: To qualify for a mortgage you need an Irish Dancing medal, a unicorn horn and a hair from the head of your firstborn child

While it may seem like you have to jump through a lot of hoops when applying for a mortgage, the requirements are actually much more straightforward than you think. 3 months’ bank statements, your P60, your salary certificate and a payslip, as well as your ID, proof of your address and PPS number will do the job nicely. Check out our full list of what you need for your first meeting with the bank here.

MYTH 2: All you need to save is the deposit

Not quite.

Saving the deposit is a serious step in the right direction but, unfortunately, there are quite a few additional costs you’ll need to factor in.

Here are some extra costs you’ll need to consider:

Stamp Duty
1% up to €1 million euros and
2% of the balance of the selling price over €1 million
(e.g. €300,000 home = €3,000 Stamp Duty)

House valuation
Between €150-€250 +VAT = €307.50

Roughly €300 +VAT = €369

Legal fees
(Usually 1-2% of the purchase price or €1,500 – €3,000 +VAT)

Property Tax
Based on the value declared for the property and the rate that applies for the year that you buy.
Expect to pay €200-€500

 Home Insurance
Approximately €250-€350 per annum.

 Mortgage Protection
Roughly €100

 TOTAL: €8,332

Although it may seem like quite an intimidating list of extras, fortunately, these are not all payable at the same time so that gives you a bit of breathing space. In good news, some lenders offer cashback at drawdown, which may be too late to cover most of these payments, but could help with furnishing and decorating if you need to spend some of that budget on these expenses.

MYTH 3: If you’ve got an online betting account, you’ll never be approved for a mortgage

Even something seemingly innocent, like having an online Lotto account, could technically be classed as gambling. While online gambling is not something banks are overly keen on, it won’t automatically disqualify you from getting a mortgage. As long as it’s not too frequent and doesn’t cause missed payments or lead to your account being overdrawn, it shouldn’t be a problem. If you do enjoy the occasional flutter, try to keep it to a minimum and avoid doing it with your credit card.

MYTH 4: Paying rent is dead money

Not anymore! Banks like to see proof that you will be able to pay back your mortgage so your extortionate rent payments might actually come in handy for something.

MYTH 5: Getting credit approval in principle on your mortgage application is a bit like getting blood from a stone

There is a bit of a perception that getting credit approval in principle on a mortgage application is a bit like getting blood from a stone.

That bit’s down to you. It can actually take as little as 72 hours if you have all the paperwork required with your application so get your skates on and get that application in.

Keep your chin up!           

Don’t let other people’s negativity and half-truths put you off buying a home. Do your own research and take it step by step. If you really set your mind to it, you can make it happen.

Brought to you by permanent tsb

Check out our ‘Home Buyers HQ’ from saving to sale agreed, everything you need to know. If you’re looking to start your own home buying journey you can book an appointment with the permanent tsb team today.

Lending criteria, terms and conditions apply. Security and Insurance required. permanent tsb p.l.c is regulated by the Central Bank of Ireland.