Alison Fearon from Switcheroo.ie mortgages discusses latest trends in the mortgage market
Are you struggling to understand the jargon used in the world of mortgages? Fear not, as Switcheroo.ie have compiled a list of the top 5 jargon busters to help demystify the language.
- Loan to Income (LTI): LTI is the ratio of the size of the loan to your annual income. For First Time Borrowers Lending institutions are currently limited to lending 4x an applicant’s annual income or combined income if it's a joint application. For Home Movers/Subsequent Borrowers this is limited to 3.5x income.
- Loan to Value (LTV): LTV is the ratio of the size of the mortgage to the value of the property being mortgaged. For first-time buyers, switchers and moves the maximum loan to value is 90%, meaning that for a €200k property, the maximum mortgage allowed is €180k, and you will need a deposit of €20k.
- Agreement in Principle (AIP): An AIP is a document from a lender indicating how much you may be able to borrow. However, it does not constitute a formal loan offer. Some selling agents may require this for viewings of properties if there is a lot of demand.
- Help to Buy Scheme (HTB): The HTB scheme is a government initiative that supports First Time Buyers with deposits for new developments through tax incentives.
- Standard Variable Rate (SVR): SVR is the follow-on rate that you will go onto at the end of a fixed rate period. SVRs are typically been more expensive (but not always), so if you think you are on one or about to finish your fixed term, get in touch with us.
We hope this list has made your mortgage journey a little easier to understand. If you need further advice or help, visit Switcheroo.ie, and we will be happy to assist you.
If you are considering this or any other mortgage product, be sure to get professional advice and register at Switcheroo.ie
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