How Do I Qualify For A Mortgage?

inside3You can qualify for a mortgage if…

  • You meet certain eligibility requirements – employment history
  • You are financially capable of servicing your mortgage – income
  • You are credit worthy – no history of bad debts
  • You can provide adequate security for the loan – generally a first mortgage on the building and land

Details of these criteria are as follows…

Eligibility
Mortgage programmes have certain eligibility requirements.

Age
You must be eighteen years or more and your age plus the term of the loan must not exceed your retirement age.

Financial Ability
Income Qualification
You must provide proof of your gross monthly income by way of a job letter and your last salary slip. Variable income such as overtime, acting allowances and bonuses are not usually considered as part of your gross income. If you are self-employed you need to provide audited financials prepared by a qualified accountant. This should be supported by historical information on all bank accounts to prove the income declared.

Income Security
You must provide evidence of sustained employment for a period of at least three years.

Capacity to Service the Loan
You should be able to provide complete and accurate information regarding your financial responsibilities and commitments. Your monthly mortgage installment generally must not exceed 30% of your gross income. Where you have other existing loans, your mortgage installment plus other loans must not exceed 40% of your gross income.

Record of Savings
All mortgage companies require a contribution to the acquisition of the property by all borrowers by way of a down payment (minimum 10%) and closing charges. Evidence by way of bank/credit union statements must be produced to show that funds are available to meet all costs involved to complete the mortgage transactions.

Credit Worthiness
Credit reference checks will be carried out on all credit facilities you have been granted. The bank must be satisfied that you have a good credit rating before the mortgage is granted.

Quality of Security
Tenure
The mortgage facility has to be secured by an unencumbered freehold or leasehold property. For leasehold properties, the remaining term of the lease must exceed the maturity date of the mortgage by at least five years.

Value of Security
A valuation report prepared by a Valuer on the Bank’s panel dated no earlier than six months prior to the application should be submitted.

Instrument of Security
All mortgage facilities must be secured by a legal first mortgage on the land and building, and fire insurance assigned to the Mortgagee.

Rates and Taxes
All water rates, property taxes and land rent (where applicable) must be paid annually by the mortgagor.