Mortgages are still being handed out

GETTING A mortgage these days might seem a bit like trying to find the Holy Grail but it is possible, says financial advisor Frank Conway of moneycoach.ie.

Firs though, not only do you have to have a job but your employer is also likely to come under the microscope if a bank is going to spring you the cash. What they don’t want to see is you working for a company that looks as if it is contracting rather than expanding, and any suggestion that staff have been let go recently will be seen as a red flag. “ This is less reported, but it is important that your employer has not been laying off staff,” Conway says. “This will present a problem for a lender. One could be in a job for 10 years but, because the employer reduced staff numbers recently, this does create a very unstable future.

“In reality, it is only the future that really matters when it comes to getting a mortgage.”

Not that lenders won’t be looking at a person’s past as well. Your “history” is you ability to save and manage money and this can be documented either by way of actual savings through a bank or by paying rent regularly, or both. A clean credit history is also crucial with no blips including missed payments on other loans.

If you have too many other debts, it’s a big stumbling block.

Lenders increasingly look at the applicants’ capacity to pay their debts in an overall sense.

“If a person already has a range of other debts they are paying, a lender is more likely to reject their application based on their reduced ability to service the loan,” he explained.

Nor surprisingly, the self-employed are finding it particularly hard to get cash, he says. “Lenders will be looking for all of the usual tax returns to prove income, but they will also be paying attention to the ongoing prospects of the business and the overall industry that business operates in.

“Again, hard evidence and soft evidence are all used in the decision-making process. If one passes all of the tests, then yes, it is possible to secure finance to buy a property.”

Lastly, it is probably a good idea to have some form of a relationship with the lender where you are making the application. “But note that may help the application, but there are no guarantees,” he says.