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What Are the Criteria for Mortgage Approval?

Close up of a key on a keyring shaped as a house sitting on a wooden table.

04 Oct 2019

Posted in:  Mortgages and First Time Buyer

The first step on any mortgage journey is getting approved by your lender. But what are the criteria for getting approved? The mortgage application process may seem confusing and jargon-filled, which is why we’ve broken down what is required to help get your mortgage approved. Read on to find out.

Your Bank Statements

In order to qualify for a mortgage, we will need to see 6 months most recent current account statements if not held with AIB and 6 months most recent statements for any of the following not held with AIB,  Savings, Investments, Borrowings including mortgages.  This allows us to see your everyday financial habits and determine whether you’ll be able to pay back the mortgage. We’ll look at things like rent and utilities payments and whether you’re saving on a regular basis to satisfy us that you won’t have a problem with repayments.

Your Credit History

We may also look at your credit rating to determine your ability to pay back the mortgage. Your credit rating will take into account any loans you currently hold or have taken out within the last five years and monthly repayments made or missed on them. It will also note your failure to clear off any loans. However, the bank will consider your reasons for missing repayments, so a black mark on your credit rating doesn’t necessarily mean you won’t be able to get a mortgage. You can apply for a copy of your credit report from the website of the Irish Credit Bureau. You can also access the Central Credit Register for free  - subject to fair usage.

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Proof of Your Income

If you are a PAYE worker, we’ll need to see your three most recent pay-slips and we’ll also need you to complete a salary certificate signed by your employer.

If you own your own business, we will need further information including three years of audited/trading accounts, certified by your accountant and a confirmation of your tax position from your accountant. Revenue documents to confirm your declared level of income. We’ll also need a minimum of 6-months recent bank statements for your business and for any personal accounts or personal account borrowings not held with AIB

Proof of Identity

This one is straightforward enough. Before approving your mortgage, we’ll need to see official proof of identity. This needs to be a current valid passport or current drivers licence and a current utility bill or current bank/financial institution statement.

We are also required by law to collect and verify your Personal Public Service Number (PPSN) or Tax Reference Number (TRN). This is required by the Central Bank of Ireland’s Central Credit Register for Customer Identification

Your Deposit

The most important part. If you are a First Time  Buyer, will need a deposit of at least 10% of the total value of the property. However, up to 80% loan to value is available for movers, studio apartment valued at €275,000 or above or a one-bedroom property. We do not lend for the purchase of studio apartments valued at under €275,000 . You may also be able to avail of the Government Help to Buy incentive if you are a First Time Buyer and are purchasing a newly built home. You can find out more about the scheme on  www.revenue.ie.

Once we’ve received all the above and your deposit is in place, we’ll be able to give you Approval in Principle. You will now know exactly how much you have to spend on your new home and move on to the next step on your mortgage journey – finding the perfect house.

For the full list of documentation required for a mortgage application check out our Mortgage Checklist

Want to Find Out More About Mortgages?

Take the first step on your journey by talking to one of our expert AIB Mortgage Advisors.

Allied Irish Banks, p.l.c. is an authorised agent and servicer of AIB Mortgage Bank in relation to the origination and servicing of mortgage loans and mortgages. Allied Irish Banks, p.l.c. and AIB Mortgage Bank are regulated by the Central Bank of Ireland.

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