I’m going to start this post by saying that I’m not a financial expert and nor am I claiming to be. These are tips that worked for us and got us over the line for our mortgage. If I had known last year what I know now about the mammoth task involved, it would definitely have made things easier and quicker. So I’ve decided to put a post together to explain what I’d recommend to anyone who’s even thinking about buying or building a home over the next couple of years. Lots of you have PMd me over the past few months since we secured our mortgage, so I figured it would be easier and useful to put it all down in a post here.
- Keep a close eye on your bank accounts. I’m notoriously bad at managing my finances. Money hits my bank account and suddenly it’s gone. I think nothing of dipping into my overdraft – in fact, I usually count my overdraft as if it’s my own money! If you’re planning on applying for a mortgage, you’ll need at least six months of bank statements, so make sure you keep them looking healthy. Keep your account in the black.
- Don’t let any direct debits bounce. We were terrible at this. Some of our direct debits were always due just before payday so inevitably the money just wasn’t there to pay them. Not only did we waste a heap of money on the wonderful ‘service fees’ from the bank, but this looked really bad for any mortgage application. Ring your service providers and check about moving your direct debit payments to a different time of the month that suits better. Some are more obliging than others, but it’s definitely worth asking. Otherwise, you could pay your bill manually either in the Post Office or online.
- Don’t have any online gambling accounts coming out. We didn’t, but apparently this is hugely frowned upon by financial institutions. If you currently have money coming out of your account and going to a bookies account, I’d seriously consider cancelling it if you plan on applying for a mortgage any time soon.
- Set up a savings account. Even if it’s only €100 per month, have it coming directly out of your bank account and going to a savings account you don’t have easy access to, such as a credit union account, or an account you don’t have a card for. Regular saving is something that the bank will look for.
- Use a broker. We went to a few banks individually first and it was such a rigamarole and very disheartening. One told us we hasn’t a hope of getting a mortgage. The other gave us false hope and then turned us down when we submitted our application. It was such a rollercoaster. Once we went to the broker, she gave us a list of things we needed and worked on our application for us. She was brilliant and was so good at keeping us in the loop and always answered calls and emails, unlike people in the bank. I know if we’d have gone to her straight away, we’d have our mortgage a lot earlier. I also think it helped that she was based in Dublin because she met the decision makers in the banks regularly and also, she was used to dealing with huge amounts of money. Our mortgage is relatively small to those families in Dublin have to get for a similar sized house.
So there you have it! The tips aren’t ground breaking or anything – they’re really obvious and simple but they’re not necessarily how we live our lives. Getting your finances in order is tough when you’re paying bills and car loans and kids’ activities and all the rest. It can be a case of going from pay check to pay check. But if you follow the above steps – even for a little while until you’re over the line – you should manage to secure the necessary funds and hopefully find or build your dream home! If anyone has any tips that I’ve forgotten, feel free to add them in the comments. Our house is progressing at the moment so I’ll be sharing pix and more updates soon!