Aib Audit

Over the past 18 months, net income of many people has decreased, due to revenue reductions and tax increases. It is now much harder to get the mortgage needed to buy a house or an apartment, so for many the dream of owning a home of their own, despite the decline in housing prices is still as far away as ever.

Most mortgage providers now demand a deposit of 20 per cent of the price of the property for which the mortgage is required. Banks and building societies will offer over 100 percent of mortgages that were available 18 months ago. Now offer the maximum is usually 90-92 percent.

Bank of Ireland offers a maximum mortgage of normally 90% of the value of the property. Generally, loan amounts are subject to monthly repayments not exceeding 30% to 40% of borrowers disposable income and will vary depending on individual circumstances.

Allied Irish banks offer mortgage buyer first time to fund up to 92%, flexible repayment options including deferred start 3 months, where you make no refund whatsoever for the first 3 months and the interest is simply added to your loan.

Letters LTV for the loan to value, which is the ratio of the outstanding loan on the property value. Banks are now more willing to offer mortgages for Lower LTV. Allied Irish Banks now offers a variable rate mortgage at 2.25 per cent for loans with an LTV of 50 percent or less.

Buyers must decide on the mortgage package that suits them. Fixed rate mortgages might make more sense in today's home buyer. While lenders of charging hefty fees to allow you to switch to another mortgage, fixed rate mortgages shield buyers from ever rising costs of variable rate mortgage deals.

Some banks also make distinctions between existing customers and new customers seeking long-term mortgage loans with existing customers offered larger loan, while other lenders are now closed for new business, while large banks such as the EC and AIB, as well as ICS and EBS are still offering mortgages.

Banks are willing to pay are now much more cautious about who exactly they lend to. The banks want as much as possible evidence that the candidates work is proof that the recession and the likelihood of the applicant defaulting on the mortgage is reduced to a minimum.

Banks are required to ensure that their customers will be able to repay the mortgage at a minimum rate of the European Central Bank plus one plus 2.75 percent.

To formally request a mortgage, you will need a recent P60, a certificate of income from an employer, a recent pay slip, photo identification and a utility bill. Banks may also apply for loan accounts and evidence of your own financial situation.

Self employed applicants must provide two years of audited accounts and confirmation that the fee is paid to date. An evaluation report will also be required to buy the property.

Shorter-term mortgages, 30 to 35 year terms, are now replacing the 40 years previous mortgage. These short-term loans mean high monthly payments, even if they do not reduce the total mortgage to pay over the term of three plus 40 years.

Please remember, as with all mortgages, your home is at risk if you do not maintain payments on a mortgage or other loan secured on it. The lender may adjust the payment rate on a housing loan from time to time and you may have to pay a fee if you pay a fixed rate loan early.