How long does it take from AIP to formal loan offer for Mortgage application?

The first step in buying a property in Ireland is AIP (Approval In Principle) from a bank such as Bank of Ireland. This gives you the mortgage amount that you can borrow from a bank in principle when you purchasing a property. This document is based on some preliminary documents such as your income and your residential status, etc., and a general rule of thumb is that you can borrow 3.5 times of your income or 4 times from 2023. With this document in hand, you can start to search your property would like to buy with the given budget (i.e., roughly your savings + the amount approved in principle). AIP normally lasts from 6 months to 1 year, and can be extended once it is expired.

Once we've identified a property to purchase, and finally sale agreed after the bidding process, then we can move on from AIP stage to formal loan offer stage which takes some time to finish. You can also do it earlier with your bank as you will see later in this post.

In this post, I will elaborate the timeline with Bank of Ireland (BoI) based on personal experience.  The general stages during the BoI Mortgage Application are as follows:

Although the timeline might vary depending on each individual and bank, it can provide a general understanding of the process for those who are just about to entering this stage. In the following, I will use "Day 1" to indicate the day of sale agreed on the target property.

• Day 1: Sale agreed => Submitted all required documents
• Day 2: Got a call from the Mortgage specialist (who is coordinating the process) to submit some additional documents => Submitted those additional documents;
• Day 3: Got a call confirms that all documents are received and will move on to "Underwriting" stage once the document review is finished.
• Day 8: Pointed out some problems related to submitted documents and asked to re-submit 
• Day 11: Got the updated documents from HR and re-submitted those documents
• Day 16: The status of the application is changed to "Preparing application for underwriter review"
  • It says "We are preparing your application for the underwriter. We may need to contact you with further questions, if not, we will let you know when we have finished preparing your application and it is with the underwriter."
• Day 29: Got a call to submit additional documents
• Day 30: Submitted those documents and moved to the "Underwriting" stage, t says the process will take 10-12 working days.
• Day 40: Got approved, i.e., underwriter approved. As there is no target property identified, it is approved as property-hunter approval.
• Day 61: Sale agreed on one property. The application went through the check of any status has been changed or not.
• Day 65: BoI asks to submit some of the updated documents such as recent bank statements.
• Day 66: Uploaded all required documents.
• Day 80: Got underwriter approval again with updated details (i.e., the sale agreed property). The Case Manager team of BoI will take over the case till drawdown of the mortgage. The mortgage package would arrive in 3-5 working days.
• From here on, based on the agreement on the closing date of the property, you need to do and provide the leftover documents such as signed mortgage contract, survey and valuation (bank),  mortgage protection/life insurance, and home insurance. In the meantime, your solicitor should also provides those documents they need to provide to the bank.

Overall, it is quite time consuming process and that's why people are saying it takes quite long time from sale agreed to moving in to the property. A good thing to do is trying to finish the "underwriting" review stage as early as possible by submitting all required documents, which might be a good idea as the process could be much shorter once you sale agreed your dream property.

Residential Property Price Index March 2023 - The national Residential Property Price Index increased by 3.9% in the 12 months to March 2023

The Central Statistics Office (CSO) released the Residential Property Price Index for March 2023, which shows that the national residential property index increased by 3.9% compared to 12 months ago. 

The good thing is that the 12 month-increasing rate slowed down in the past months as we can notice from the figure below. But still note that 3.9% increase still indicate the house price is increasing. The prices in Dublin rise by 1.7% and prices outside Dublin are up by 5.7%.

Dublin House Prices

If we delve into more details about the Dublin areas, especially houses, we can see that the house prices in Dublin City decreased a little bit. In contrast, we can also notice that South Dublin house prices are still increasing over 6% each month compared to that of 2022.

 

Available Properties

If we look at the number of available properties on Daft.ie, we can easily notice that the stock level is not increasing during the last couple of months. Normally, there should be some increasing trend during the January and Feburary, and the number should be increasing from May to the end of the year in the past years. 

If we look at the increase of the number of properties during the last year, the trend is obvious. However, the trend seems does not hold anymore and the stock level has been steady for both nationally and Dublin, and it seems like the stock level will not go up as usual. This might in turn give an upper pressure to the prices of properties despite of the increasing mortgage interest rates, particularly in the South Dublin areas. 

Which months are good for selling or buying house/property in Ireland?

 

As for buyers, there are four months in a year might be good for buying properties. 

• January
• July
• August
• December

Those months are relatively quiet period, which means there tends to be relatively less biddings. Of course, on the other hand, there might be less available homes, e.g., on December and January, available on the market.

As for sellers, the following information sheds some lights on how to make decisions:

• January: "In January, people tend to have a bit more motivation to buy," says Stephen Day, divisional director of residential sales at Lisney. "When it gets to the new year, all of a sudden they really want to commit." [1]
• February: There is a flux of properties into the market and then once you get to mid-February, there is a steady flow.
• April: The amount of exemptions banks could offer ran out as early as April in 2018. So selling early in the year when buyers may have access to bigger budgets can also shape the price you achieve.
• May: the stock level should be increasing till the end of the year
• November: great for sale, as people don't want to go for another year of the purchasing journey and want to focus.

Have you sold or bought a house/property in Ireland? What is your experience or feeling during the journey of selling/buying house/property?

Related articles:

1. What is the best month to sell your home to get the maximum price?

2. Irish real estate expert reveals when the best time to buy or sell will be in 2022