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RESIDENTIAL PROPERTY

The Irish economy has never been better and the interest in property over the last 5-6 years has been phenomenal. Despite the recent slowdown, the amount of money being advanced by lending institutions to private individuals for residential properties is at a very high level.

The profile of those purchasing residential property is made up of the following categories:

(1) First time Buyers
A first time buyer is a person, (or where there is more than one buyer - each of such persons):

Who has not on any previous occasion, either individually or jointly, purchased or built on their own behalf a house or apartment, in Ireland or abroad.
Where the property purchased is occupied by the purchaser, or a person on his behalf, as his/her only or principal place of residence.
And where no rent is derived from the property for five years after completion of the current purchase.

Until recently a First Time Buyers Grant of €3,809 was available to qualifying persons for a new home, under certain conditions. This grant has now been abolished. First time buyers are exempt from stamp duty on property up to a value of €190,500.

(2) Trader-uppers
Typically a trader-upper is a person who sells their own property and upgrades to a better one, taking advantage of the vibrant property market and low interest rates, whilst having a relatively unchanged monthly repayment on their mortgage.

(3) Investors
Investors are those who wish to take advantage of low interest rates and high demand for rental properties ( i.e. shortage of properties to rent).
Investors have come back to the market after a brief period away. This was because of the 9% second or subsequent stamp duty rate that the Government introduced approximately 18 months ago. With the abolition of this at the end of 2001, investors found it more attractive to come back into the market again.

With the re-introduction of mortgage interest relief for such properties, it was a much more attractive package for investors to come back to the market. This new shortage of available properties to rent in most parts of the country has made the investor very keen to buy property to rent. Also the availability of a generous Social Welfare payment for tenants has made it much more attractive to buy property to rent. Other schemes countrywide, including tax breaks and Rural Renewal areas, have also brought investors into the market where they can achieve almost tax -free rental for a period of time. Section 23 properties are very attractive for persons owning a number of rental properties in that they receive long-term tax relief for any rental income earned in the Republic.

RESIDENTIAL LENDING CRITERIA

For those who require mortgage facilities to buy or build their own home, we can provide finance up to 92% of the lower of cost or value, on both houses and apartments. The maximum term is 30 years, provided that the client's age is not over 65 years at maturity date.

1. Income Details:

PAYE Worker

Latest P60 together with 3 recent payslips and 3 months consecutive bank statements (if new to bank). If P0 is not available, a letter confirming income levels from employer is required in substitution for this.

Self Employed

2 years certified accounts along with written confirmation from accountant that all taxes are up to date and in order. Where the latest set of accounts is more than 12 months old, confirmation of performance in the intervening period is required. This can be in the form of an accountant's certificate or 2 years tax returns.
Also (if new to bank) 3 months consecutive bank statements on both the personal and business accounts.

2. Security Required:

First legal charge over the property being acquired and financed through the Bank.
Assignment to the Bank of a life policy to cover both the amount and term of the proposed mortgage.
A professional valuer's report from the Bank's panel of valuers.

For those who require mortgage facilities to buy or build residential property for investment purposes, we can provide finance up to 85% of the lower of cost or value, on both houses and apartments, for a maximum term of 25 years.

Repayment capacity will be primarily based on the rental income to be generated for the property being purchased. Other sources of income will be factored in, namely net monthly salary or earnings from self-employment (proof of which is - as required for Residential Lending), 75% of overtime, rental income from other properties and income from shares and investments.

Leo McCauley (t/a First Financial Services) is regulated by the Financial Regulator.

Email: first@mccauleyproperties.com
Tel: 074 93 73933 / 73303 Fax: 074 93 73304
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3. Other Documentation Required:
	Fully completed Mortgage Application form. 1 Photo ID - e.g. Driving licence or Passport & Address verification - e.g. recent bank statement or utility bill. For property under construction - house plans, site map & full Planning Permission is required, together with Supervising Architect's Certificate & a copy of his Professional Indemnity Insurance.