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What Are Mortgage Exemptions And Can I Get One?
Navigating the ins and outs of a mortgage application can leave even the most organised among us feeling bothered and bewildered. From minimum deposits and income requirements, to first-time versus second-time buyer rules and regulations, it’s a mortgage minefield out there.
However, there are many schemes and initiatives in place that are worth taking the time to understand. One such example is a mortgage exemption.
What is a mortgage exemption?
To put it simply, a mortgage exemption is one that exists outside the rules that were presented by the Central Bank in 2015. These guidelines were initially put in place in order to encourage both mortgage lenders and borrowers to make sensible and practical financial decisions.
While the coronavirus pandemic initially brought great uncertainty about the immediate future of the housing market, the distribution of mortgage exemptions were temporarily suspended. Thankfully, the wheels of the property market kept turning and as a result, the majority of lenders are now once again offering this incentive.
There are two types of mortgage exemption: loan to income and loan to value.
Loan to income mortgage exemption
This type of exemption allows you to borrow more than 3.5 times your gross annual income for the purpose of a mortgage. A lending institution can only approve this exemption for 1/5th of their first-time buyer clients in any given year, while just 1 in 10 second and subsequent buyers will be entitled to this extended cap within the same period.
Loan to value mortgage exemption
This type of exemption is specifically targeted at second-time buyers. Under the standard rules of obtaining a mortgage, second and subsequent applicants must produce a minimum deposit of 20 percent of the sale price of the property as a deposit.
However, if they are awarded a loan to value mortgage exemption, the required deposit decreases to 10 percent. 20 percent of all second-time buyers in a calendar year can avail of this loan to value exemption.
In order to avail of a mortgage exemption, your credit rating must be in impeccable shape and your mortgage application should be glitch free. Your success is also dependent on how many of these exemptions your chosen lending institution has left for the year, which in turn puts a lot of emphasis on the time of year you place your mortgage application. In essence, the earlier the better!
With so much to wrap your head around but equally, so much to potentially gain should you be eligible for an exemption, it’s important to speak to an expert who can explain things clearly and point you in the right direction. This is where Symmetry Financial comes in.
As a mortgage intermediary with access to the majority of leading lenders, the team at Symmetry Financial will offer you guidance, options and most importantly, a helping hand as you take your first steps onto the property ladder.
With an in-depth understanding of the mortgage process, we will provide practical advice based on an impartial review of your finances and will help you to make informed decisions based on a number of key questions you need to ask yourself, such as:
- How much should you borrow?
- Which lender should you borrow from?
- What should the term of your mortgage be?
- Would a fixed or variable-rate mortgage be more suited to your situation?
- Which type of mortgage protection cover is most tailored to your needs
Aside from navigating you through the basics, Symmetry Financial will also discuss available schemes and initiatives – such as mortgage exemptions – with you, ensuring that all avenues are explored with the aim of securing the best deal for you.
From obtaining the best rate on your mortgage protection insurance, to providing you with a variety of choices based on the wide range of lenders in the market, Symmetry Financial makes it their goal to guide you seamlessly through the mortgage process from start to finish.
For enquiries or to book a consultation at Symmetry Financial, email info@symmetryfinancial.ie or call 01 6831673.
If you’d like a free, no-obligation consultation for your mortgage, pension or financial needs, get in touch here, call us on 01 6831673 or email us directly on info@symmetryfinancial.ie.
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