Easy 10 step guide for first-time buyers
1. Set a budget
When buying a house it’s important to know what you can afford to spend. Being calculated in this situation is the most sensible way to operate – what amount can you put up in terms of a deposit and what monthly mortgage amount will fit within your monthly outgoings?
If you are a fit time buyer, you may borrow up to 90% of the purchase price of your property, subject to being able to borrow a maximum up to 3.5 times your salary (or 3.5 the combined salaries of you and your partner). If you are a second-time buyer, you will be allowed to borrow up to 80% of the purchase price.
Don’t forget you will need to pay fees such as legal fees and stamp duty (1% of house value) on top of your mortgage, insurances and house furnishings.
2. Sort out your money.
This one may be a given but it is the first step to becoming eligible to purchasing your first home. Organize your deposit payment which is usually 10% of the value of the house, if you are looking to purchase a New Build, Building your own home (for the first time) or developing a building which was not used for residential use previously then you can avail of the Help-To-Buy ( HTB ) scheme.
(The HTB Scheme is a tax refund from the Revenue which is aimed at helping first-time buyers purchase the first home by providing 5% of your deposit payment. The HTB scheme has some terms and conditions which you can read here in our previous blog post. It’s well worth a read if you fall into the above category)
3. Apply for your mortgage
Unless you are in a position to buy your home outright then a mortgage is the way to go. Like many things in life when making a big decision such as buying a new home, it is important to shop around.
With so many mortgage lenders now available it really boils down to which provider suits your needs and application most. For example, they can differ on interest rates, mortgage repayment terms, variable rates and more. Do your research – it is often worthwhile to engage a mortgage broker as they will look at your application and apply on your behalf to the lenders which they believe suits you best.
4. Choose your property
This one is a given – choosing your first home is an exciting but stressful time so it is important to visit the property again and again..and again to make sure you are making the right decision. A top tip is to visit the property at different times of the day to see things such as lighting, traffic and noise pollution to name a few
5. Appoint a Solicitor
For obvious reasons appointing a solicitor is one of the key decisions that you will make in this process so basing your judgment on past reviews, referrals, and recommendations is always a good idea. We suggest Joyce & Co but we are a little biased. Seek a full quotation from your solicitor to include fees, stamp duty, outlays and registration charges.
6. Speak to an Engineer
Assuming you have chosen your home, your mortgage lender will carry out a very basic check of your property but this is never a substitute for hiring a qualified Engineer. They will ensure your house is completed to the agreed standard (in the case of a new build). If your property is second hand it is important to get the view of a professional early to know important information such as whether you are likely to have to invest in renovating the property to bring it up to the standard you require.
7. Signing contracts
When the buyers and sellers are ready to go and a completion date is agreed, the exchange of contracts takes place. Now you are committed to purchasing on that date.
8. Arrange building insurance and mortgage protection
Shop around, there are many different providers with varying conditions offered. Recommendations are a good way of searching. Your mortgage broker will be able to provide some valuable advice on these matters so don’t be afraid to ask.
9. Closing Account
Your solicitor will send you a financial statement with the required monies needed from you in order to close your purchase. This will include your stamp duty, legal fees, registration fees, outlays and any shortfall of purchase monies outside of what a mortgage will cover. Your solicitor will order your mortgage funds directly from the lender in advance of closing the transaction.
10. Moving day!
Your solicitor will give you a call to let you know that the sale has been completed and that you may collect your keys from the estate agent. Now it’s time to move some boxes, unpack and enjoy life in your new home.