Welcome to my blog!

This blog tells my experience with buying a house in Dublin, Ireland, and renovating it. 

I wanted to share everything I learned along the way, my misadventures and any tips and tricks!


Documents needed for an AIP - Approval in Principle

If you apply for an Approval in Principle, there are some considerations to keep in mind when preparing all the documentation. 

1 - All the parties that contribute to the purchase of a house will need to present the list of documents mentioned at the end of the post, and be included in the mortgage.

For example, if you are buying a house with your partner and you are pooling together your resources to reach the necessary deposit, both of your names will need to appear on the mortgage application, and hence each of you will need to provide the respective documentation. 

This doesn't sound counterintuitive, however, let's say that you want to buy a house with the help of your parents (who, in this scenario, live abroad, as you are a foreigner in Ireland). In that case your parents would need to transfer their share of the money directly in your bank account as a 'parental gift', hence paying any taxes related to such a gift of money. 

If they didn't proceed as such, the bank would require that they be added to the mortgage as co-applicants, and thus, your application would be complicated by the fact that a party in your mortgage application resides and works abroad.

Banks are already very wary of applications from foreigners, as they present a higher 'flight' risk in case they can't satisfy the mortgage repayments. Having one of the applicants reside abroad, complicates further the application as it presents an even higher risk for the banks: if the mortgage repayments were not paid, it would be harder for them to reach the party which resides abroad for compensation. 

What would happen if your partner currently resides abroad, but you would still like to pool your money together for the house deposit? This is an even more complicated situation because (unless you are married), you won't be able to transfer money as a 'spouse / parental gift'. They would still be able to 'gift' you that money, however, that will require higher tax fines which in some countries can reach 20% of the money donated.

Also, if your partner transferred their share of the money to you without making  a 'gift' (and hence paying the respective taxes associated with that), and only you applied for the mortgage (as to avoid the penalty caused by one party living abroad), the bank would find the 'source' of the money through a credit check and they wouldn't approve the mortgage unless the source's name was on the application too.

The reasoning behind this is that if you can't pay the mortgage and the bank is forced to sell the house to recoup its losses, they might have difficulties doing so because your partner might oppose them: they might say that, since they invested in the property (by giving part of the deposit), they are part owners and won't allow the sale of their 'part' of the house.

2 - Any time you apply for a mortgage AIP with a bank, other banks can see the credit search performed on you.

If a bank declines your application, others will see that a credit search was performed, this will most likely lead them to deduce that a previous bank has declined your AIP, and, hence, it will be more difficult to receive an AIP from other lenders. 

This is where the Mortgage Broker comes into play, as they have contacts in each bank and they can have informal meetings to gauge the interest of each lender towards your application. I personally suggest Frank Lenny Financial as a Mortgage Broker, as he's been very dedicated to helping us with our AIP. 

 

LIST OF DOCUMENTS FOR AN AIP
 

1 - Salary Certificate (obtainable from your employer) - If you are applying for an AIP through a Mortgage Broker, they'll provide you with a Salary Certificate form, that you can ask your employer to fill out. In case your company doesn't have an official seal, remember to also ask them for a statement clarifying that (an email from the person who has signed the Salary Certificate will suffice).

2 - Payslips (usually 3 most recent payslips)

3 - Most recent P60 (obtainable from your employer) 

4 - Loan statements (if you have any current loans)

5 - Savings Records 

6 - Photo ID (es: passport)

7 - Current Account Statement - If you don't have an account with an Irish bank, open one as soon as possible. The lender will put much more value on an Irish Current Account Statement / Savings Records (which should be minimum 3 months, and preferably 6 months), than a statement from a foreign bank. 

8 - Visa Card Statements

9 - Utility Bill or any Tax document (for proof of address) - This is one of the documents that might take you the longest to prepare. If you are renting a property and especially if you have moved since you initially registered for your PPS number, you will need to have a 'government official' document that proves where you live. 

Only the current owner of the utility bills can change / add a name to the bill, and this sometimes involves cancelling that account and opening a new one in your name. For example, for Electric Ireland bills, the current owner would need to close their account and then you would need to open one in your name. 

While to add a second name to your UPC bill, you would need to have the current owner do it for you, or have them next to you when you call their customer service. 

UPC Operator:
I would like to advise that in order to add a name to the account we will need consent from both parties. This can be done two ways:

- A letter with both signatures stating you both confirm consent to be co-responsible for the account and the charges associated with it.
- A phone call with both parties present to confirm that you both consent to be co-responsible for the account and the charges associated with it.
— Response from the UPC Customer Service when I inquired on changing the name on the bill

Another option (far easier, but likewise lengthy), would be to update the information on your Tax forms, and ask for a P21 Balancing Stament or an Amended Tax Credits Certificate. You can request these documents online by opening your 'PAYE Anytime' account, and it might take a minimum from one week to 10 days to receive them.

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