Trading Up

If you have a growing family or need to move to a new location for a new job, the task of finding a new home becomes more challenging than for first time buyers because of the need to sell your existing home.

Adding to this difficulty is deciding whether or not you need to get a new mortgage.
While the demand for mortgages from first time buyers remains healthy, the scourge of negative equity (ie. when your house is worth less than your mortgage) means that those who us who have bought within the last five years will find trading up a much more difficult issue.

There are ways around this, of course, such as if you are in a position to rent out your existing home.

Whatever the solution, one of your first ports of call should be your mortgage broker, who can establish how much of a mortgage you qualify for on your new home and to shop around on your behalf to get you the best rate and product to suit your needs and circumstances.

You need to find out how much is outstanding on your existing mortgage and if there are any costs involved in clearing the mortgage.

1 - The documents you need to give your mortgage broker are much the same as if you were a first time buyer

1. Salary Certificate completed by your employer
2. 6 months recent original current account statements
3. P60 for 2009
4. Three recent payslips
5. Copy of passport or driver licence
6. Recent utility bill - Gas, electricity, telephone bill or Bank/Visa Statement. 
7. 12 months statements of any short term loans you have
8. Evidence of savings
9. Last two years accounts if self employed and letter from Accountant stating tax affairs are up to date 

2 - Once you have all the documents, your broker will meet with you to assist in completing the paperwork and submit your application to the preferred lender.

A lender should issue ‘loan approval in principle' within three to five working days.

3 - The next step is to arrange for a valuation on the property.

Your mortgage broker will arrange this and submit the valuation to your lender who will issue you with an offer letter within three to five days. A copy of the offer letter will be sent to your solicitor. 

4 - You will then meet with your Solicitor to sign contracts and mortgage documents

Do not sign a contract to purchase your new home until you have a mortgage approval that has been checked by your broker and solicitor. If you are selling your existing home, try to arrange for the closing of both houses on the same day (although this is easier said than done).

5 - Arrange your life and home insurance

Your broker can assist you in completing the paperwork and get you the cheapest quotations. Remember to cancel your existing house insurance, mortgage and mortgage protection direct debits once you have moved home and paid off your old mortgage. 

Here are some of the options that are available to first time buyers:

• Up to 92% mortgage
• Interest only option up to 2 years
• Up to 35 year term
• Variable and fixed rates available
• Flexible mortgage features, mix and match you mortgage over different terms
• Holiday break

Tip

Don't forget to budget for additional costs such as auctioneers/estate agency fees, legal fees for both selling and buying, valuation fees and furniture removal.

A typical auctioneers fees is approximately 1.5% of the selling price plus VAT, while solicitor’s fees for selling your home would be about €1,350. The solicitor’s fee for the purchase of a new home will cost a little more, typically around €1,850 including VAT. Valuation fees: €127.00.

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