Consumer advice with Gráinne McGuinness
This month we are looking at ways to fulfil financial New Year’s resolutions. Buying a home of one’s own is a milestone in life but there are plenty of hurdles to overcome first.
I asked Joey Sheahan, head of credit at MyMortgages.ie and author of The Mortgage Coach, what advice he would offer someone hoping to buy their first home in 2020?
“Prepare prepare prepare!” he said. “If you are prepared and you take advice from an expert then chances are you will sail through the process.
“A mortgage is the biggest financial undertaking most people will ever take in their lives — this might sound daunting but it really doesn’t have to be — because thousands of people throughout the country are mortgage approved every month.”
Mr Sheahan suggests people prioritise sorting out their finances ahead of house hunting.
“I would advise you to get your finances in order first, then look for your new home,” he said.
“What’s more, many estate agents/ auctioneers will not accept a bid unless you can show them a copy of your ‘approval in principle’.
"This is a document that states your approval of a mortgage for up to a certain amount based on the details you have given in your application. A mortgage approval in principle will usually be valid for six months.”
Many have concerns about buying their home ‘at the right time’, is there an argument for waiting to buy?
“Rents are high now across the country, so if the alternative is renting, I would say now is the time to buy, as in most cases the monthly mortgage payment is less than the market rent for similar properties,” he said.
“The market is also competitive at the moment — banks want the business.
“There’s no way of knowing what way house prices will go — but recent reports suggest they may be flatlining, which is encouraging as it offers more stability to the market.”
So what should people do to make their finances mortgage-ready?
“Do your homework, talk to a mortgage broker and do a trial run now.
“Even if you feel your bank statements are not in order etc, it is as well to show a mortgage broker you’re documents, warts and all, so that they can then advise you on what to do to present yourself in the best possible light.
People should avoid “red flags” that put a lender off.
These include unauthorised overdrafts, online gambling referred to on your bank/credit card statements, cash advances on credit cards, even on holidays, non-documentation of regular payments such as rent, an irregular savings pattern, erratic spending patterns, and a poor credit rating.
Steps applicants should take to boost their chances:
Virgin Mobile is currently offering everyone the chance to try out their Mobile Unlimited plan.
Existing Virgin Media Broadband or TV customers can try the plan for four months for free. If you’re not a Virgin Media Broadband or TV customer, you can try the Virgin Mobile Unlimited plan for two months free.
After the free period expires customers will play €25 per month for the plan, which includes unlimited 4G data, calls and texts. The plan operates on a 30-day contract, so customers are free to cancel at anytime.
If you are willing to commit to a 24-month contract, Virgin Media also have a number of smartphone offers.
Customers can get the Apple iPhone Xs 64GB plus the Virgin Mobile Unlimited Plan from €149 upfront and €40 a month for the first four months and €65 thereafter.
The Samsung S Series range plus the same plan, is available from free upfront and €30 a month for four months and €55 thereafter.