We are only in the middle of the process of buying our first home so I can’t say with full flourish that I’m an expert but so far we’re having fun viewing houses, making plans and going mad altogether on Pinterest (although that last one is more me that we). There is most certainly a surge of people looking to buy homes now – we’ve come out of the recession and over the past 5-7 years most people, who traditionally would have purchased their first home held off until markets stabilized, banks started lending and jobs became secure again. The average age of a first time buyer in Ireland now stands at 33. The frustrating thing we are finding is that a LOT of the houses we’ve viewed seem to fall under the tagline of ‘built to sell’ which sends shudders down my spine and smacks of shoddy workmanship.
Anyway all that aside, the first step towards home owning is actually getting your mortgage. We found, from speaking to friends that there were a few steps you can take to make this process as easy as possible.
First things first, get your sh*t in order! You can download a checklist of the documents you will need from the banks websites which acts as the only guide you need when organising all your paper work. We set about closing bank accounts we didn’t use and getting rid of credit cards (and if you have a Paddy Power account CLOSE IT DOWN – this is the biggest no no when it comes to mortgage approval). One thing I’ve noticed a lot of people saying that work on contract like me is to bring in a copy of your CV when you approach the bank. This helps build a better picture of how employable you are after your contract ends. Don’t underestimate the time it takes to get bank statements etc sorted.
It’s important too to be clear of your figures before you go in. The Central Bank issued new guidelines in January of this year meaning that for first time buyers a bank will lend a maximum of 90% of the first €220,000 and a maximum of 80% thereafter. So if the house you’re looking at is, for example, €250,000 the bank will give you a maximum of €222,000 and you will have to fund the remaining €28,000 (ie this is effectively your deposit). Then keep in mind you will have legal fees, engineer’s fees, agent fee’s, stamp duty (1% of the property price), home insurance, life assurance and furniture. These sums are good to have in mind so that you can play around with some of the online calculators in advance of approaching the bank. Based on the figures I showed you could expect to be repaying approximately €1,000 a month so if your rent is €700 try and save at least €300 monthly in the months leading up to applying.
Get life assurance and home insurance sorted when you begin getting your papers together. Even if you’re renting it is good to insure your contents and for us having children it’s been important anyway to get life assurance should anything go wrong. Either way it’s easy to organise these two things when you have less things to worry about and more time to shop around for a good deal. It’s good to be able to see how much you have to factor into your monthly budget when these expenses are real, I would estimate about €50 in total a month but obviously this figure could vary hugely.
And that’s about as far as we have gotten on the road to home owning. Fingers crossed we will get something sorted soon, we have our eye on a beauty so please god things work out!