In order to be as organised as possible, you should have the following information available to offer to your potential lender or broker.
Before applying for a mortgage, you need to be aware of the Central Bank’s mortgage lending rules. First-time, second-time and subsequent buyers require a 10% deposit to be eligible for a mortgage. Once you have your deposit together, you’ll need to gather a range of documents to give to potential lenders or a broker so that they can review your application.
In general, though, you will need to provide the following documents :
1: Proof of identification: A photo ID will be required. You can use an Irish driver’s licence or a valid passport.
2: Proof of your Personal Public Service Number (PPSN): This is usually found on a payslip, a tax assessment document, or correspondence from the Department of Employment Affairs and Social Protection or the Revenue Commissioners. Lenders are required by the Central Bank of Ireland's Central Credit Register to obtain a customer’s PPSN for customer identification.
3: Proof of address: You can use a recent utility bill, or bank statement for this.
4: Proof of income: The lender will need to ensure that you will be able to make your mortgage repayments every month, so they will have to check that you’re earning enough money. To do this, they will require:
- Your most recent statement of earnings from Revenue. Formerly referred to as your p60, this is now known as your Employment Detail Summary.
- At least 3 months of payslips.
- If you’re on a contract, if your income is performance related, or made up of any non-basic income (e.g. shift work, overtime, etc.) you may be required to provide 3 years' most recent statement of earnings. This is to confirm your track record of earnings.
- If you have any non-PAYE income the lender will need to ensure that your taxes are in order. You’ll need to submit either:
- A Charges and Payments statement from Revenue confirming your tax is paid. This can be found on the Revenue Online Services (ROS) website.
- Or a letter of confirmation from your accountant that confirms your tax affairs are in order.
5: Proof of employment: Your employer will need to provide a stamped and signed Salary Certificate, which confirms that you’re a permanent member of staff, along with your basic salary. If you’re on leave from work at the moment, a lender will require a letter from your employer confirming your return date. Your employment must still be under the same terms and conditions prior to taking your leave.
6: Bank statements: Lenders require 6 months of continuous bank statements to evaluate your financial habits. This rigorous audit is carried out to ensure you’re managing your day-to-day spending properly. Your bank statements will show the lender that you’re financially sensible, that you can meet any recurring payments, and that you have the ability to save.There are some things to keep in mind:
- Pay through your bank account: Try to make any rental payments and savings contributions through your bank account instead of with cash, so that there’s a record of your ability to manage your finances.
- Label payments: We’d recommend ensuring that your rental payments and your savings payments are clearly outlined on your bank statements. Label these accordingly, if possible. You can do this by setting up a standing order or direct debit.
- Stop gambling: If lenders see a record of gambling, excessive use of overdraft facilities, referral fees, or unpaid item fees, they won’t look too favourably on your application.
Other documents may be required to verify savings that you have, or to verify a monetary gift towards your deposit.
7: Credit card and loan statements: The Central Credit Register (CCR) was set up by the Central Bank of Ireland to help prevent loans or credit facilities from being given to people who may not have the financial ability to repay them. As such, lenders are obliged to check your credit history through the CCR before giving you loan approval.
If you pay your credit card payment after the due date, your next statement will include a late payment fee. These late fees can pose as a red flag, as they symbolise poor money management or a lack of funds. What’s more, if you miss a payment and don’t try to repay it before your next statement is received, the credit card provider can report the missed payment on your credit history. This black mark will remain on your credit history for a significant period of five years. We’d recommend setting up a direct debit payment for your credit card and aiming to pay off the balance each month.
Information on consumers is stored for five years in the Central Credit Register and includes the following:
- The type of loan - credit card, mortgage, overdraft, etc.
- The name of the lender
- The loan amount
- The outstanding balance
- The number of overdue payments (if applicable)
- The date of the next payment
- The amount of the next payment
- Checking your credit report before you apply for a mortgage can help you find any potential missed payments you were unaware of or any mistakes on your credit report. You can do this by requesting a credit report from the Central Credit Register.
If you're self-employed:
If you’re self-employed, the mortgage application process isn’t quite as straightforward. You will need to supply additional documents and information on your income, business performance, and trading accounts. This is because you need to prove that you have a stable income and you can afford to make your mortgage repayments.
Additional documentation needed includes:
- Your certified/audited financial accounts: Most lenders will require at least two years of accounts, which will need to be certified by an accountant.
- Your business bank statements: Along with your personal bank account statements, you will usually be required to provide business bank statements for at least six months.
- Your Revenue documents: You’ll need two or three years of Revenue Notices of Assessment, along with your Tax Clearance confirmation.
If you're building your own home:
Self-build mortgages are seen as being riskier for lenders, due to varying costs and timeframes being extended. You’ll need the following documents:
- An Ordnance Survey Ireland or Property Registration Authority style site map.
- Professional indemnity insurance and initial report from your supervising architect/engineer/building surveyor.
- Building plans, provided by your builder or architect.
- Project costings.
- Final grant of planning permission (generally with not less than 18 months to expiry).
- Certificate of Inspection
If you're switching mortgages:
Despite the time and effort it takes to switch mortgages, the savings can be significant, so it’s well worth it in the long run. Once you've decided on your new lender, they'll issue you with a mortgage switching pack that you will fill out.