Before you buy (Requirements)
You qualify for a Abbey Mortgage Bank Plc mortgage if you:
- meet certain eligibility requirements;
- are financially capable of servicing your mortgage (ideally repayments cannot exceed 33% of borrower’s earnings);
- are credit worthy with no history of bad debts;
- can provide adequate security for the loan;
Prospective borrowers will be assessed for their eligibility to apply for their preferred product:
- Age: Prospective applicants must be at least eighteen years and no more than 65. The maturity of the mortgage should not extend beyond the applicant’s retirement age.
- Purpose of the Loan: The mortgage must be used to either
- finance the acquisition of a home
- or develop or renovate a property.
- Income Qualification: Applicants must provide proof of their gross monthly income and allowances by way of an employment contract, tax returns, and most recent pay slips. Variable income such as overtime and bonuses are usually not considered as part of gross income. Applicants who are self-employed shall need to provide an income statement prepared by a qualified accountant. This should be supported by historical information on bank accounts to prove the income declared;
- Income Security: Applicants must be able to provide evidence of employment for a period of at least three years. Applicants who are not in formal employment should provide satisfactory evidence of their ability to sustain the declared level of income;
- Capacity to Service the Loan: Applicants should be able to provide complete and accurate information regarding their financial responsibilities and commitments. The applicant’s monthly repayment obligation under the mortgage agreement must not exceed 33% of their gross income. Where the applicant has other existing loans, the combination of mortgage installment plus other loans must not exceed 33% of the gross income;
- Deposit: Prospective home buyers are required to contribute a minimum of between 20% – 30% of the property value. The borrower will be required to provide evidence of this amount at the time of application and deposit it in a designated account before the mortgage facility is disbursed;
- Credit Worthiness: Credit reference checks will be carried out on all credit facilities the applicant may have contracted. Abbey Mortgage Bank Plc must be satisfied that the applicant has a good credit rating before the mortgage is granted.
Quality of Security
- Tenure: The mortgage facility has to be secured by an unencumbered freehold or leasehold property. In the case of leasehold properties, the remaining term of the lease must exceed the maturity date of the mortgage by at least 10 years;
- Value of Security: A valuation report prepared by a surveyor acceptable to Abbey Mortgage Bank Plc and dated no earlier than six months prior to the application should be submitted. Once a decision has been made to purchase the property, the purchaser should contract the services of an Abbey Mortgage Bank Plc approved surveyor to prepare a Valuation Report of the property on his/her behalf;
- Duration of the Mortgage: Abbey Mortgage Bank Plc maximum duration of the mortgage loan is 10 years. Borrowers may choose to pre-pay their mortgages, an option which may attract a small penalty;
- Instrument of Security: Most mortgage facilities must be secured by a legal first mortgage on the land and building, life insurance and fire insurance assigned to the Mortgagee;
- Life Insurance: Abbey Mortgage Bank Plc requires life insurance coverage for the duration of the mortgage covering the loan amount. This insurance serves as additional security for Abbey Mortgage Bank Plc but it is also recommended as it provides additional security for mortgagors in the event of death. That is, if the mortgagor should die during the term of the loan, the proceeds of the life policy would be used to pay off the mortgage therefore the family would not be left with the outstanding debt;
- Comprehensive Property Insurance Cover: The borrower shall be required to maintain a comprehensive all-risk insurance coverage for the replacement value of the mortgaged property. Both life insurance (if required) and comprehensive insurance must be assigned to Abbey Mortgage Bank Plc during the term of the mortgage.