Mortgage Advice & Guidance for Irish Expats

Mortgage advice

In the third episode of our Ireland is hiring webinar series, Derek Perill and Erin Whittle from FRS Recruitment was joined by Jean Creagh, mobile mortgage manager for AIB for a discussion around how Irish expats can apply for mortgages.

Watch back the webinar here

Please note, this information is from Mobile Lending Manager Jean Creagh from AIB and was relevant and up to date as of 16th September 2020. For more up to date information, please contact Jean on [email protected] or mobile 087 6181938

Are banks’ lending? Is there a demand for mortgages?

“We are lending, mortgage market to be back by 3 billion down to covid pandemic. Huge amount of people now enquiring for mortgages. A lot of people have extra savings where they thought it might take another year before looking at buying a house. Inundated with applications.

Even through covid, we can get you approval in principle subject to you going back to work”

Is it difficult for people who have just relocated here recently to apply for a mortgage? In particular when they haven’t been living here?

“No, there is just a couple of things we would need people to do. First of all, when you relocate, you are usually on probation for maybe 6 months. However, you can come to us and we can get you approval in principle subject to you coming off your probation and being made permanent. In certain cases, we can also get this waived so that it doesn’t hinder you from applying for or getting a mortgage.

It is irrelevant that you were living abroad, there is just a couple of little things that we would look for such as a foreign credit check.

I would advise for you to get in touch with a home’s advisor once you come back and they will be your link the whole way through your mortgage journey. We have dedicated and non-dedicated mortgage advisors in every branch throughout the country. I am mobile so I travel to meet you and can also come to your workplaces etc.”

What if you transfer with your current company and have a local contract in Ireland? Is this seen as being in a long term job past the probation period?

“We would require some additional information but come talk to us."

How long are Credit checks valid for

"Credit checks are only valid for a month. We would need to get it refreshed however, some countries may not offer this, we know which countries these are and we can look to get this waived.

I would suggest getting a credit check before you come back.”

For non-nationals, what visa requirements are needed?

“You would need certain visa types, these are a stamp 4 or a stamp 1 critical skills. With these visas, you must be working here for one year before you can apply for a mortgage.

 If one spouse is Irish and the other is non-national, we could only approve a mortgage based on the Irish spouses income or wait until 1 year to approve mortgages for both.”

With deposits, is it different for an Expat who has just arrived into the country in terms of the size of deposit needed? And is there a difference between first and second time buyers deposit requirements?

“If you are a returning Irish expat who is a first-time buyer, you are treated the exact same way as if you are an Irish citizen living here. There is no difference in deposit required or interest rates. The required deposit for first time buyers is 10% and we would lend you 90% of the value of the house.

If you are a second time buyer, the required deposit is 20% of the value of the house and we would lend you the 80%.

However, if you are an Irish citizen currently living abroad and looking to buy here in Ireland, we would lend you 65% of the value of the house while you are living abroad. AIB are the only bank that offer this service to Irish expats.  Technically we would be required to meet people to sign documents however, with the current situation we can documentation signed up with a notary in the country you are residing. This is treated as a buy to let.”

If you are self-employed, what are the rules around getting a mortgage?

“You need to be trading for 3 years and your tax confirmation to ensure its update and 6 months bank statements from where the company is banking and 6 months statements from your personal banks. This is relevant for both Irish citizens living here and Irish citizens living abroad. If an Irish expat moves home to set up their business, we would just need to make sure the same level of turnover is achievable here, this is case by case however, we may need to see them trading   here first. This is dependent on what they do.”

Is the HTB rate 10% at the moment? Is this just due to Covid?

“The HTB is the help to buy for first time buyers in Ireland so that they don’t have to come up with the same level of deposit to purchase. I am not sure if it due to covid that they increased the rate to 10% but it is there until the end of the year. With this, you can get up to 30k towards the purchase of your house if you worked in Ireland and have paid that much in tax over the past four years. For Irish expats returning, they may not qualify for this, as they would have to have paid tax for the last 4 years.”

Is there a 20% discount on salaries from abroad when calculating the 3.5X the salary for a mortgage.

“There isn’t a 20% discount, however, we do stress test the exchange rate of the currency you are earning in. This is to stress the exchange rate if there are any fluctuations.”

My key advice for expats is, regardless of where you are living, keep a good track record, don’t have any unpaid on your account, show regular savings to show you can afford to pay the mortgage.

With the 3.5times the income, is this a max amount someone can get a mortgage for?

“We have exceptions where we can go to 4.5 times your income, this comes down to your net disposable income afterwards and this amount varies on occasion and is dependent on if you don’t have further borrowings and that you can afford it.”

Besides the credit check, is there any other criteria’s an Irish expat would need to provide for a bank?

“For any application, we would need a signed application form completed,  a salary cert from your employer within a month of submission, your last 3 pay slips and 6 months statements of accounts you have outside the bank you are applying too. If you still have accounts open in another country, we would also require 6 months statements from here.”

Why would expats choose AIB for their mortgage? Is there anything that differentiates AIB from other banks?

“At the moment we are the only bank that will lend to people living abroad. We can also offer the 4.5 times your salary. If you are moving home to build your home and have a site to do so, we take the value of the site towards your deposit which no other bank does which is a huge help when building your own house.

The average cost for a house in Dublin is approx. 380k and for every else its 260k . As many people are now working remotely, they are looking for houses outside Dublin.”

What other costs do people need to consider when applying for a mortgage?

  • Your stamp duty is 1% on any house under 1 million
  • Your solicitor fees, we bench mark these at around 2k to cover this.
  • You may have other fees such as folio searches which can cost around €300-400
  • You will also need to take out fire cover for your house which is dependent on the size of the house.
  • You will need to get an evaluation on the house which is a set fee of €150
  • You will also need life cover or mortgage protection cover. Life cover can be an issue when living abroad, this is case by case dependant. You will need to discuss this with your mortgage advisor.

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