Despite the many issues in the housing market, the number of mortgages being approved is rising, with first-time buyers making up the bulk of new borrowers. According to the latest figures from the Banking and Payments Federation Ireland, the number of mortgages approved in May rose 10.1% over the year. Just over 50% of the 4,926 mortgages approved in May were for people taking out their first home loan.
Buying your first house is an exciting time but can also be daunting. With the statistics showing more people taking the plunge, what are the key points for those thinking of buying a house to bear in mind?
Online property search platform Perfect Property has put together a guide for people in this situation and managing director Laura Pollard says knowing what’s ahead can help.
“Though it is a stressful time between mind-numbing legal papers, grumpy bank managers and hectic property viewings, you can make the experience that bit easier,” she says.
You are likely to have one of the longest financial relationships of your life with the mortgage lender you choose, so Ms Pollard strongly advises shopping around.
“Set up appointments with a few banks and speak to their advisors about what they offer. Typically, mortgage advisors are on hand to help you with any concerns you may have, so it’s an excellent port of call to put your worries to bed. You’ll find out how much you can borrow and get tons of advice to get the ball rolling,” she says.
The next step is to get saving. As a first-time buyer, you will have to have a deposit of at least 10% of the property price and you will also need to show lenders that you will be able to meet the mortgage repayment each month. A history of regular savings, which you do not dip back into, shows that and is particularly important if you are not paying rent.
Once you have the deposit you had in mind saved, it is time to clarify how much you are eligible for, by getting mortgage ‘approval in principle’ from the lender. This is where the paperwork starts to accumulate.
In addition to completing a detailed application form, your lender will want to see proof of your income and your savings and check your credit history. There may be other paperwork required depending on individual circumstances.
“If all looks good, the bank will then give essentially give you the theoretical green light to start your property search.Woo hoo!” Ms Pollard says. The Perfect Property website allows you input the maximum amount the bank approved and enter any must-have features and you can also visit estate agents and search other property websites. When you do find your dream house, Ms Pollard advises hiring a solicitor before making any offer.
From the fun of viewings, we take a quick turn into the riveting world of law. You’ll need to hire a solicitor to handle the conveyancing.
Once you have someone, she says how to go about the offer itself is up to you. “If other folks also have their hearts set on your property, then some people go in with a strong offer close to their max bid. Others like
to pitch low and negotiate up from there. It really varies from situation to situation and the best course of action will be up to you.
“If your offer is accepted, you’ll need to pay a booking deposit to the estate agent and a document of sale will be sent to your solicitor,” she says. There will be more paperwork involved in moving from ‘approval in principle’ to a mortgage offer and you will also need to get a professional valuation of your property.
“After your valuation, you’ll need to settle up with your solicitor, pay your registration fees, and pay stamp duty on the property,” Ms Pollard says.
Remember to budget for solicitor fees, registration fees and valuation. Between them you can expect to pay €2,500 to €3,000, depending on your location and the property. You must also pay stamp duty, currently 1% on house purchases of under €1m.
“Once you’ve that done and dusted, it’s time to move in!”
Deal of the Week
Home Store + More are aiming their current offers firmly at householders who are taking the recent sun as a sign it’s time to revamp their outdoor space. The retailer’s deals for July include a wide range of awnings and parasols and accompanying decorations.
Pick of the deals is a retractable 3m x 2.5m awning, reduced from its usual price of €269.99 to €134.99. Ideal for protecting a decking or patio from strong sunlight, it can be retracted when not in use and is a neutral shade to suit all sets of outdoor furniture.
They also have a range of simpler-to-install parasols, available in a range of colours from €24.99 — all at half their usual price.
If you are determined to take the family further than the back garden, they are also holding a half-price sale on a wide range of tents and camping gear. The on-sale range includes everything you need for a camping trip, including portable gas stove, lanterns, pumps, cooler boxes, and tableware.