In January of this year (2023) the central bank of Ireland introduced a new framework for mortgage measures. First time buyers can now borrow 4 times their annual salary as opposed to the the previous rate of 3.5 time.
Mortgage lending amounts are the amount of money your bank, lender or mortgage broker is will to loan you to purchase a property. When considering you application your chose institution will consider many factors.
Some of the factors are personal such as credit score, personal circumstances and employment history. Other factors are algorithmic and determined digitally there are things such as current salary, LTI and LVT.
An LTI is an acronym for Loan to Income ratio and is a common term used by financial advisors, mortgage brokers and banks.
Essentially your LTI is an equation that compares the size of the loan they require against their income.
Lenders use LTI as a risk assessment tool, it helps to determine whether or not the applicant can afford to repay the loan within the agreed time period. Applicants with a higher LTI present a bigger risk to the lender of default, this can result in the loan being declined or alternatively a lender may opt to approve the loan but with less favourable repayment terms and default penalties.
Lenders invariably have their own in-house specific LTI limits. In order for a loan to be approved borrowers must meet their lenders criteria to qualify for a loan. More often than not this calculation is done digitally.
Each lender's/bank's limits vary depending on factors such as the lender's risk tolerance, market conditions, and regulatory requirements.
Lower LTI ratios are generally considered more favourable as they indicate a lower debt burden and a higher likelihood of loan repayment.
LTV is another acronym but this one is an abbreviation for Lender-To-Value and is another term adopted by the mortgage industry.
LTV is a financial metric and is a term used by lenders to assess the risk associated with a loan. The risk is compared/calculated by comparing the loan amount to the valuation and/or purchase price of the property being financed.
LTV is calculated by dividing the loan amount by the properties assumed value or purchase price, expressed as a percentage.
“For example, if a mortgage applicant is requesting a loan of €200,000 for a property valued at €250,000, the LTV ratio would be 80% (€200,000 divided by €250,000, multiplied by 100).”
With the Irish property market in its worst turmoil since the 2006 financial crisis and subsequent property bubble. Local and National Governments have released several housing schemes with the sole purpose of getting more of Ireland's first time buyers on the property ladder.
Because we have covered these schemes in detail previously we will only provide a small synopsis on each of them.
The first home scheme offers what they consider to be “first time buyers” a loan of 30 - 50% of the property price by exchanging it for the same pecuniary value of equity in the home.
For more detailed information on the First Home Scheme (FHS) click the link.
The Help-To-Buy Scheme is another Goverment incentive to assist first time home buyers. The scheme functions by providing a tax rebate levied against the property price.
In order to be eligible for the Help-to-buy scheme there are several criterias which must be met:
For more information on the HTS scheme, click the link.
A fresh start applicant is someone who has been divorced, separated or whose relationship has come to an end and has no financial interest in the family home. A fresh start applicant can also be an individual who have gone through personal insolvency or been declared bankrupt.
To view the full criteria on whether you qualify as a fresh start applicant click the link.
Each scheme has its own definition and criteria of what qualifies as a first time buyer. In the most part the schemes have a core criteria with a few variants depending on the whom is issuing the grant. The core criteria consist of applicants who
Axis is one of Ireland's leading property developers, who specialise in our own developments but also act as a contractor for other large property investors.
If you're considering buying a property and want advice on anything from mortgage rates to a new development the our experienced team can help.
At Axis we aim to provide quality housing for every need, want and budget.
Contact us today to see if we can help.
Axis Living Limited,
Willow House, Millennium Park, Osberstown, Naas, Co. Kildare, W91 C6KT
Email: info@axis.construction
