Mortgage Approval and Renting, the cost and how it may effect you getting approval

A

Amata85

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I just have a very general question about mortgages. I've no experience with buying a home or even renting one.

I'm hoping to start renting in the next few months for about a year or so. I've a deposit saved and will continue to add to the sum while renting but I will not be able to save at the rate I have been in the last couple of years and also pay an average rent.

What I want to know is, in general, do most mortgage providers understand this, are they happy you've the deposit saved and have a track record of paying a rent? I think it seems reasonable but nothing would surprise me.

Thank you for reading,

Amats
 
Yes, the rent that you are paying counts in terms of affordability.

e.g. your rent is €1,500 and you're saving €1,500...you're deemed to be able to afford €3,000 a month (i.e. that's the stress tested maximum and you obviously need to meet the other criteria).
 
Thank you for that information Gordon Gekko.
Just to check with you, because this is my main worry. If my rent is monthly €800, I'm saving monthly €200, does that mean I would be seen to afford €1000 maximum? Does it matter that my savings per month are considerably lower percentage wise than my rent?

Thanks again.
 
Yes, that's exactly what it means.

Loan repayments, rent, and savings are all included in the affordability calculation.
 
make sure you have a paper trail of the rent you are paying. Pay by direct debit if you can, that way the bank can see exactly what you are paying and how reliable you are.
 
Thanks JohnJay.

That's a great tip. I'm so green, it didn't occur to me.

Thanks again, I really appreciated the advice.
 
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