15 May 2018
Posted in: First Time Buyer
Getting on the property ladder doesn't have to be a tough slog. When you've got the finances sorted and you've found the right home, it’ll all seem like a meandering journey that was so, so worth it.
But until you reach that point, it can seem a bit confusing – so where do you start?
If you've been renting in Ireland for any length of time, you'll know what it's like to spend good money for what feels like not a lot of return. For the same amount as your monthly rent, you could be paying off the cost of a house you love and can call your own (and decorate to your own personal tastes). It's just a matter of figuring out what you need.
Money's a good place to start – how are you going to finance your purchase? More than likely, you'll be using a combination of savings and a mortgage to pay for your home. Right now, Central Bank rules dictate that first-time buyers need a 10 percent deposit saved.
Don't forget: you'll need extra cash for the add-ons involved in home purchases – like legal fees to a solicitor, surveyor fees, stamp duty and moving fees (unless you know a man – or woman – with a van and some spare time).
We have a few handy ways we can help at the planning stage – from a regular savings account in the months coming up to your application, to an affordability calculator that will help you figure out how much you have coming in and out each month, and how much you can afford to borrow. You can also request a call from a Mortgage Master on a day and time that suits you.
Once you have the finances sorted, a lot of your worries are sorted too – now it's time to figure out where you want to live, and in what kind of property. Are you interested in a house or an apartment? Would you rather a new build or a second-hand home? Do you – or are you planning to – have children? What schools are in the area? All of these factors will come into play when it comes to deciding where to live.
Sit down and work out a list of must-haves and would-be-nice-to-haves. These will help rule out particular areas and property types so that you'll have a clearer idea of what you're looking for.
For the majority of first-time buyers, you'd be looking at an average price of €390,933, which may rule out that five-bedroom townhouse in Blackrock you've been eyeing up. It's important to be realistic and figure out the best option for your means and circumstances.
It's smart to get Approval in Principle before you start house hunting. This is where an EBS Mortgage
Master will go through your finances and advise you of the mortgage you could expect to borrow.
The rule of thumb is that you can borrow 3.5 times your income – but your credit rating may come into play and you may need to clean up your finances a little before you apply. Things, such as bounced direct debits or accidentally dipping into an overdraft might hamper your application, so it's best to have this all figured out before you start looking.
You'll also need to provide evidence of your income, any outstanding loans or repayments, savings, your credit history and your age. It can get quite forensic, so be prepared to provide as much documentation as possible. The clearer a picture the lender can get of your finances, the better.
In the current climate – i.e. with house prices on the rise and a lot of people on the hunt for their dream home – it's wise to remember that you probably won't end up buying the first house you put an offer on – or even the second. Keep a sensible head on those shoulders and don't go above what you can afford on the basis that, “we'll find the money somewhere.”
This is the largest purchase you'll ever make and when you're talking about money in terms of thousands, it can be very easy to say, “ah sure we'll go an extra €20,000!”
However, once you do find a house and your offer is accepted, you'll need to contact your lender to move from Approval in Principle to Full Loan Approval – and in order to do this, the property will need to be valued.
You'll need to have certain things in place before you can draw down your mortgage, pay your deposit and exchange contracts. Your solicitor and EBS Mortgage Master will advise you along the way but bear in mind that you'll need to have mortgage protection cover and home insurance in place too.
Once that's all done, your lender will issue your mortgage funds to your solicitor to purchase your property and it's yours – and now the real fun begins.
Are you in the market for your first home?
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The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.
EBS d.a.c. neither accepts nor assumes any responsibility in relation to the contents of this blog and excludes all warranties, undertakings and representations (either express or implied) to the fullest extent permitted under applicable law.
EBS d.a.c. is an authorised agent and servicer of EBS Mortgage Finance (a wholly-owned subsidiary of EBS d.a.c.). EBS d.a.c. is regulated by the Central Bank of Ireland. EBS Mortgage Finance is regulated by the Central Bank of Ireland.