An Cosantóir

www.military.ie THE DEFENCE FORCES MAGAZINE | 25 Considering a mortgage? Áine Carroll, Director of Communications and Policy, Competition and Consumer Protection Commission looks at steps you can take to get yourself mortgage ready. Before you apply for a mortgage you will need to get your finances in order so you can demonstrate to potential lenders that you can manage your finances effectively and comfortably afford the repayments and other costs. Getting to grips with your finances will also help you build up a lump sum for your deposit. The first step is to get a realistic picture of how much you can afford to save and where you can cut back. To do this: 1. Know your income. Draw up a list of all your income in- cluding salaries, social welfare and any other income. 2. Examine your outgoings such as rent and bills. See if you can save by switching utilities or bundling your TV, broad- band and phone. 3. Track your spending to work out your everyday outgoings. Your bank statements are also a good indicator of this. 4. Tackle your debts before you start to save. Start with any high interest loans including credit cards and focus on clearing these first. If you start saving first and don't focus on paying off your debts, you may save your deposit faster but your debts may reduce your ability to get mortgage approval. How much do you need to save? The deposit you need will depend on how much you want to borrow and whether you are borrowing on your own or with someone else. If you are a first-time buyer a 90% limit will usually apply, meaning you will need a minimum deposit of 10%. If you are not a first-time buyer, you can borrow up to 80% of the value of the property. There are also limits based on your income. There are tools available on ccpc.ie that can help you work out how much you can afford to borrow as well help you to com- pare the rates available from lenders in the Irish market. When working out your savings target remember to also budget for costs of buying a home, including legal and valu- ation fees etc. Your savings target should stretch beyond the minimum deposit you need. Applying for a mortgage Before you start looking at properties try to get 'approval in principle' so you have an idea of the amount you can borrow. This can be an advantage when it comes to making an offer on a property, as in some cases sellers will want a potential buyer to have mortgage approval before accepting their offer. You can apply for a mortgage by: • Applying directly to a lender and looking after the applica- tion process yourself. • Using a mortgage broker who will deal with lenders on your behalf and advise you during the process. Be sure to ask the broker for their 'Terms of Business', what they charge and how many lenders they represent. • When comparing mortgage providers be careful about special offers such as cash back from the lender, or paying your legal fees. These offers are attractive in the short term but they might not make financial sense in the long term as a mortgage provider could have a higher inter- est rate than other lenders. When comparing mortgages, focus on the interest rate first as even a small difference in the rate will make a big difference to your repayments over the full term of the mortgage. By Áine Carroll, Director of Communications & Policy with the CCPC For more information see our step-by- step guide to buying a house and our mortgage comparison tools on www.ccpc.ie

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