Moving Up: Applying For Your Second Home Mortgage

Typical 1930s pebble dashed semi detatched house with Bay Window, in Bristol, England.

01 Jul 2016

Posted in:  Mortgages

Be it a new arrival, a new job, or a growing brood - sometimes your current home just doesn’t cut it anymore. But the prospect of changing homes can be intimidating. Couple it with moving out of your old property and the hassle only intensifies. Throw in two sets of estate agents and solicitors and… well you get the idea. Help is at hand, however. We’ve compiled the following guide to take some of the stress out of the process.

Figuring out What Your Current Home is Worth

To truly figure out what you can afford, you’ll need to get a grasp on what your current home is worth. It’s a good idea to look at a number of sources to get a fair evaluation.

You may have come across it the first time around, but the property price register site is an excellent resource to compare prices. Once you’ve done your initial research, get valuations from more than one estate agent. This will give you a pretty accurate figure to go on.

Remember: Estate agents will charge a fee for this which can vary so do get a quote in advance.

Your ‘New Home’ Budget

Once you have an idea of what your current home is worth, you can figure out approximately what you can spend on your new home.

Use this simple formula to work it out:

Equity + Savings + New Mortgage = New Home

Note: Your equity is the money you’ll have left over from your current property after you’ve paid your mortgage in full.

Don’t Forget To Budget for Hidden Costs

There’s nothing worse than having everything budgeted down to a T only to be hit with surprise costs down the line. To avoid any nasty surprises, make sure to include the following costs when planning:

 Solicitor’s Fees.

 Estate Agent’s Fees.

 Stamp Duty: The current rate is 1% of the value of the property up to one million euro – your solicitor will work this out.

 Valuation Fees: You will need to use an approved valuer from AIB’s valuer panel.

 Structural Survey: It’s worth getting your new home surveyed before you close the deal to avoid any potentially costly problems in the future.

A couple applying for a second home mortgage

Saving a Deposit for your Second Home Mortgage

Under the new Central Bank rules, you’ll need a deposit of at least 20% as a home mover. You can find information on budgeting and saving using our savings calculator.

Selling Your Old Home: Some Tips

As you’ll remember from buying your current home, that first impression of a property makes a big impact. If you want a quick sale, it pays to put some work into your home. You’ll be surprised what a lick of paint can do. Remember the Three C’s: Clean, Cream and Clutter free!

Preparing your home for sale can be a stressful experience, but think of it as a great opportunity to get rid of any clutter and keep only the things you cherish.

Ahead of any viewings, pop personal items like photos into storage along with anything too quirky. This isn’t the time to express your personal taste – think blank canvas. While you’re at it, don’t neglect the exterior of your property. It can be really beneficial to have a friend or family member around to offer you an honest critique.

tips for selling your house

Paperwork: What You’ll Need

You might recall from your previous application that the paperwork you’ll need to bring along varies depending on your employment status and the type of home you’re buying. To minimise stress, make sure you’re familiar with what you’ll need to bring with you. We’ve prepared a mortgage checklist here detailing everything you’ll need depending on your situation.

mortgage application form

Applying for Home Mover Mortgage with AIB

Moving to a new home can be daunting but we’re here to help you every step of the way. We deal with mortgage queries every day. We’re experienced in navigating the financial side of things and can help alleviate some of the stress. You can find lots of useful information on our website or simply drop in and speak to one of our mortgage advisors today.

Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland. Copyright Allied Irish Banks, p.l.c. 1995

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