That’s why a leading mortgage broker is appealing to the country’s eight major lenders to cut mortgage approval times from six months to 12 months.
Joey Sheahan of MyMortgages.ie says many borrowers get two or three mortgage approvals from lenders because of the delay between their initial approval and finding a property.
“The most recent BPFI statistics showed there were 5,355 approvals in May 2022 alone – including 2,640 for first-time buyers,” he said.
“From what we see on the ground, there is a likelihood that up to 40% of these applicants have also been approved for a mortgage in the last 12-24 months, but have not been in able to find a suitable property in the meantime.. The volume of these new applications could be reduced and could significantly reduce the workload for borrowers and lenders, and could in many cases result in longer turnaround times. fast mortgage approvals across the market.
Sheahan says only around two-thirds of the €1.45 billion approved in May is likely to be taken, based on the current approval process and the lack of housing supply.
Some estate agents ‘will not allow borrowers to view properties’ without mortgage approval
“The lack of housing supply in this country is likely to be with us for many years to come, unfortunately,” he added.
“In the meantime, we need to look at other ways to ease the stress for potential buyers and speed up the process, where possible, for those who are lucky enough to be able to buy.
“If banks were to introduce 12-month approval as standard, which some banks used to offer, it would have a significant impact on the market. Some real estate agents won’t even allow borrowers to view properties if they don’t have a pending approval, which means borrowers are forced to keep re-approving.
Sheahan thinks there’s nothing stopping banks from offering 12-month approval:
“There would be no risk for the lenders because before issuing a loan offer, which is the formal contract between the lender and the borrower, the bank can always ask for an update from the borrowers on any change in employment or other circumstances in the interim which adversely affect their financial situation.The mortgage approval is always subject to change prior to drawdown.