How can I boost chances of getting my first mortgage?
QI AM considering buying my first house. I have started to view properties and I want to have everything in order to make sure I have the best chance of getting mortgage approval. What do I need to do? Lorraine, Dublin South THE first step is to get your finances into shape. Look at your income, examine your outgoings, track your spending and tackle any outstanding debts you have. The website ccpc.ie has a very useful spending calculator, which can help you work out what you are spending your money on now and where you can cut back.
Next, find out how much you could borrow. You can do this online or by talking to a mortgage adviser. Knowing how much you can borrow will help you narrow down your property search.
In terms of how much of a deposit you will need, as you are a first-time buyer, you will usually need 10pc of the property price as a deposit.
That means you can borrow up to 90pc of the property value — but the amount you can borrow is dependent on your income, your outgoings and any financial commitments you already have, including debts.
Along with building up a lump sum for your deposit, you will need to have a savings record to demonstrate that you can afford to make mortgage repayments in the future.
When working out your savings target, remember to also budget for additional costs involved, such as legal and valuation fees, and insurance — as well as the expense of furnishing your new home. Your target should stretch beyond the minimum deposit you need to avoid finding yourself short.
If you are on your way to having your deposit, the next step is to apply for a mortgage and get ‘approval in principle’.
This means that your lender approves you for a mortgage of a set amount, based on the details you provide in your application. Mortgage approval is only valid for a certain period of time, which typically ranges from six to 12 months, depending on your lender. You must draw the mortgage down before the expiry date. If you don’t, you usually need to apply again, and your circumstances, or the lender’s criteria, could change in that time.
Before you apply for a mortgage, visit ccpc.ie and use the website’s mortgage tool to help you compare your options.
Lenders often have special offers such as cashback; or where a lender pays all, or part, of your legal and valuation fees. Be aware, though, that these special offers might not be in your best interests in the long run. The mortgage interest rate you pay will have a huge bearing on your monthly repayments, so always focus on the interest rate first.
Halloween outfit safety
QI’M shopping for Halloween outfits and accessories for my children. What should I look out for to make sure I don’t buy something that could be unsafe? Ann, Co Laois WHEN you are shopping for costumes and accessories at Halloween, make sure you check that they have a CE mark before you buy. Certain products sold in the EU, including toys, must meet specific safety standards, and a CE mark shows that these standards have been met. Children’s costumes are classified as toys, so the CE mark should appear on the product, in the instruction manual, or on the packaging.
All masks and other Halloween accessories should also have a visible CE mark, and costume accessories (like swords or ‘devil forks’) should be made of soft, flexible material. Make sure the props and toys your child is using this Halloween are suitable. Some children, particularly those under the age of three, might be more vulnerable — particularly to choking due to the presence of small detachable parts — so some props may be unsuitable for them.
If you are buying face paints which are marketed at children (for example, with a picture of a child on the packaging), these paints should have a CE mark. Always check that the packaging clearly lists ingredients and instructions for use in English, and has the manufacturer’s and importer’s contact details.
Income protection
QI AM considering buying income protection insurance, as my employer offers no sick pay and I would have no source of income if I couldn’t work due to illness. I’m hearing mixed things about the schemes. Can you give me any advice on whether or not it is something I should buy? Steve, Co Kildare INCOME protection insurance (IPI) is an insurance policy which makes regular payments to you if you cannot work because of illness, injury, accident or disability. It can also be called serious illness cover or permanent health insurance — but it is not the same thing as private health insurance.
If you already have a life insurance policy, you can add this on — or alternatively take out a stand-alone policy.
This insurance can generally be bought by full- and part-time employees, and by those who are self-employed —however, check the policy terms and conditions, as not all insurance companies offer this product to part-time employees.
IPI policies usually have a maximum benefit payable, which is limited to a certain percentage of your total earnings. Also, any social welfare benefits and salary that you are entitled to from your employer will be deducted from the amount your insurer pays you.
Before you buy IPI, consider the following questions. First, do you have ill health pension protection? In certain circumstances, some pension plans provide cover for early retirement due to ill health at any age — or some form of disability insurance.
Second, do you have dependants who rely on your income?
Third, do you already have some illness insurance cover in place with another policy? For example, your mortgage protection insurance policy may include serious illness cover, which could cover your mortgage repayments if you are diagnosed with an illness that your policy covers.
Fourth, do you have savings that you could use instead of buying insurance? You will need to think very carefully about whether you want to rely on savings alone and if you will have enough to cover you for a long period of ill health. Keep in mind that if another emergency occurred, you could be left with little or no savings to fall back on.
Finally, before buying any insurance policy, check the terms, conditions and exclusions, to ensure that the cover provided meets your needs — and to find out what the maximum payout would be.
There are waiting periods before certain providers will pay out, so review the different options before you buy.
Be aware that your insurance company may exclude pre-existing medical conditions.