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Saving for a deposit on first house - complete novice need advice!

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    #32
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    jimpear wrote: »
    Im a full time student and I also have a job neting me around 19k, I have been in and out of the bank recently trying to get tings in order to buy a place of my own. One thing you have to take into account is that the bank may require you to have a certain amount left over each month for your own living expenses. In my case they said I had to have 1200 per month left over after my monthly outgoings were deducted from my monthly income. I'm not sure they like the idea of lending to a 20 year old student. I'm going to remain hopeful.

    I'm sorry, but you don't have a chance of getting a mortgage.

    1. You are in not a permanent, full-time job.
    2. Banks don't give small mortgages.


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    #33
    Tech3
    Closed Accounts Posts: 3,010 ✭✭✭Tech3


    AARRRGH, just a question I might put across. How much percent do you reckon a person should save for a house to cover interest rate increases, unemployment, property taxes etc...? I'm looking into the region of 35-40% myself. Take an average house price of what is it now something like 200K-220K?


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    #34
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    tech2 wrote: »
    AARRRGH, just a question I might put across. How much percent do you reckon a person should save for a house to cover interest rate increases, unemployment, property taxes etc...? I'm looking into the region of 35-40% myself. Take an average house price of what is it now something like 200K-220K?

    It really depends on the person and what sort of job they have.

    I think a 10% deposit is probably fine, plus 5% for taxes/legal fees/furniture and about 5% in a rainy day fund. And then save whatever you can.

    I'm quite financially cautious though.


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    #35
    Firetrap
    Closed Accounts Posts: 4,442 ✭✭✭Firetrap


    jimpear wrote: »
    I'm a full time student and I also have a job netting me around 19k, I have been in and out of the bank recently trying to get things in order to buy a place of my own. One thing you have to take into account is that the bank may require you to have a certain amount left over each month for your own living expenses. In my case they said I had to have 1200 per month left over after my monthly outgoings were deducted from my monthly income. I'm not sure they like the idea of lending to a 20 year old student. I'm going to remain hopeful.

    This job of yours - will it be full-time when you finish college? Because if it isn't, you would be absolutely insane to tie yourself to a property at such a young age, especially if you find yourself unemployed or you have to move in order to get a job.


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    #36
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Firetrap wrote: »
    This job of yours - will it be full-time when you finish college? Because if it isn't, you would be absolutely insane to tie yourself to a property at such a young age, especially if you find yourself unemployed or you have to move in order to get a job.

    Yeah. You have the rest of your life to be responsible. Travel and have fun while you're young!!


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    #37
    JuliusCaesar
    Registered Users Posts: 4,882 ✭✭✭JuliusCaesar


    Dermotsull13 wrote: »
    This thread is of interest to me aswel.

    If i have approx 10k in a lump sum to deposit where would I find out who is offering the best rate.

    Also I currently have a regular savings account with BOI but its not worth a f**k as far as I can see. Dont think the interest rate is great.

    If i wanted to open a new saving regular saving account is there any that would be recommended. Ulster bank seem to have a rate at 3.5% for their regular saving and Permanent TSB have a rate of 3.75%.

    Askaboutmoney.com has up-to-date information about which are the best short term & longterm accounts. Lots of accountants there so good advice.

    'Small' mortgages...depends how small. The less you borrow the better for you. If it's a very small loan, a personal loan might be better. Don't look to get the biggest mortgage you can, but do look into getting a house which will see you through a long time, including marriage and the first one or two kids.

    Again, the less you borrow, the bigger the deposit you can put in, the better for you - you pay it off quicker, you pay less interest, the more choices you have later on.


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    #38
    Cecil404
    Registered Users Posts: 11 ✭Cecil404


    AARRRGH wrote: »
    I'm sorry, but you don't have a chance of getting a mortgage.

    1. You are in not a permanent, full-time job.
    2. Banks don't give small mortgages.

    Not true on point 2. Some banks may not be doing 'small' mortgages but others certainly are.

    Jimpear, you can absolutely get a 90k mortgage. Employment might be more of an issue but if you can demonstrate that you have been able to pay the mortgage amount (e.g combined rent & savings) it will make a strong case.


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    #39
    Treehouse72
    Registered Users Posts: 1,003 ✭✭✭Treehouse72


    Cecil404 wrote: »
    Not true on point 2. Some banks may not be doing 'small' mortgages but others certainly are.

    Jimpear, you can absolutely get a 90k mortgage. Employment might be more of an issue but if you can demonstrate that you have been able to pay the mortgage amount (e.g combined rent & savings) it will make a strong case.


    ....and buy what with it?


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    #40
    Cecil404
    Registered Users Posts: 11 ✭Cecil404


    Treehouse72 wrote: »
    ....and buy what with it?

    Suppose the chap has another 90k in savings....


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    #41
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Cecil404 wrote: »
    Not true on point 2. Some banks may not be doing 'small' mortgages but others certainly are.

    What banks are willing to give mortgages of 90k?


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    #42
    ricman
    Closed Accounts Posts: 1,559 ✭✭✭ricman


    IF you want a house in 2 years save as much as you can without compromising your lifestyle.Dont go on expensive foreign holidays or buy a new car/ HDTV .Say you are buying a house for 100k, save at least 20k.
    most banks will give you an 80percent mortgage if you are in permanent employment.You can get a mortgage for 40k,theres no lower limit.
    Some people borrow money from their parents to help get a deposit together.House prices are still declining.
    IN some parts of the country apartments are around 100k, so i presume the mortgages are 80/90k approx.
    Obviously its easier for a couple to buy as they have twice the income if both are working.


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    #43
    CiaranC
    Closed Accounts Posts: 6,300 ✭✭✭CiaranC


    ricman wrote: »
    You can get a mortgage for 40k,theres no lower limit.
    Dont think this is correct.


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    #44
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    Treehouse72 wrote: »
    ....and buy what with it?

    Could stick a bid on this beauty :D

    www.daft.ie/1482078

    Ah to be fair he doesn't specify his deposit. He could have a savage inheritance or something


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    #45
    gaeilgegrinds1
    Registered Users Posts: 1,071 ✭✭✭gaeilgegrinds1


    Firstly I'd say make your money work, put it in a really good account & it'll make money for you. Secondly, don't listen when people say you are too young, I bought my first house in my very early 20s and it's paid for itself already. It's a business if it's in an area always rented and you get a good price.


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    #46
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    gaeilgegrinds1 wrote: »
    don't listen when people say you are too young, I bought my first house in my very early 20s and it's paid for itself already. It's a business if it's in an area always rented and you get a good price.

    I think we are trying to say there is more to life than money and owning a home when you're young...


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    #47
    Cecil404
    Registered Users Posts: 11 ✭Cecil404


    AARRRGH wrote: »
    What banks are willing to give mortgages of 90k?

    EBS, PTSB at least... I don't know whether the others are.

    Not sure where you have the idea that all banks aren't willing to write small mortgages.

    In response to another post I've seen mortgages for less than 40k also.


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    #48
    dresstoimpress
    Registered Users Posts: 153 ✭✭dresstoimpress


    AARRRGH wrote: »
    What banks are willing to give mortgages of 90k?
    Both Aib and BOI have given my friend approval on a 95 k mortage in recent weeks.


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    #49
    danbohan
    Closed Accounts Posts: 1,914 ✭✭✭danbohan


    CiaranC wrote: »
    Dont think this is correct.


    it used not to be , it is now, 40k with collateral is a lot better than l than a 380k with 200k negative equity, banks have learned a little !


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    #50
    gaeilgegrinds1
    Registered Users Posts: 1,071 ✭✭✭gaeilgegrinds1


    I agree there is far more to owning a home when young but mine paid for itself, as in I've always lived there but the other rooms paid the mortgage, win-win situation! Paid off now, so if you are smart and can get a home in an area to rent in do. It was intended as a positive comment, total buyers market, loads of bargains out there!


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    #51
    gaeilgegrinds1
    Registered Users Posts: 1,071 ✭✭✭gaeilgegrinds1


    As for the travel advice, had free rent so how would that in anyway have stopped travel all through my 20s? If you're smart about it in your 20s you'll have no mortgage in your 30s in my opinion.


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    #52
    Firetrap
    Closed Accounts Posts: 4,442 ✭✭✭Firetrap


    I hear ya but I think anyone buying at the moment would want to be very careful. Of course nobody can predict when prices will stop falling but there's no signs of that happening in the near future. I know people who could now buy their houses for 20, 30, 40k less than they did a few years ago. That's a big difference when you go to pay your mortgage each month :(


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    #53
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Cecil404 wrote: »
    Not sure where you have the idea that all banks aren't willing to write small mortgages.
    dresstoimpress wrote: »
    Both Aib and BOI have given my friend approval on a 95 k mortage in recent weeks.

    I think your friend is spoofing. BOI's "minimum value" policy stands at €175,000 in Dublin, and between €125,000 and €150,000 elsewhere. That means it is not possible to get a mortgage of 95k with BOI. Ring them and ask...


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    #54
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Firetrap wrote: »
    I hear ya but I think anyone buying at the moment would want to be very careful. Of course nobody can predict when prices will stop falling but there's no signs of that happening in the near future. I know people who could now buy their houses for 20, 30, 40k less than they did a few years ago. That's a big difference when you go to pay your mortgage each month :(

    If you consider property prices in Dublin fell 10% in the first three months of this year, anyone who held off has just saved themselves about 25k.

    That's a saving of 25k in three months.

    It'll be a similar figure next quarter, and the quarter after that, etc., until the average house price is about 150k.


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    #55
    johndaman66
    Registered Users Posts: 4,097 ✭✭✭johndaman66


    gaeilgegrinds1 wrote: »
    Secondly, don't listen when people say you are too young, I bought my first house in my very early 20s and it's paid for itself already. It's a business if it's in an area always rented and you get a good price.

    I'd be inclined to suggest that its largely a matter of personal choice and circumstances. Some young people wish to travel and see the world more like to holiday a lot, more wish to spend their money on drink and partying or other hobbies/ interests. Buying, owning and maintaining a house is outside the mindset of many young people, just not for them at all until they at least reach a certain age. Furthermore circumstances will often dictate that its probably not a fantastic idea for a young person to buy a house, relocating due to better job opportunity down the line, relationship circumstances etc. More on the other hand, myself included, are of a different mindset, have no major yearning to travel and are pretty settled and happy enough in their jobs, with good career potential etc.

    Taking booms and recessions out of the equation buying a house is more often than not an astute move for a young person but I can clearly see how its not for every young person either.


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    #56
    Treehouse72
    Registered Users Posts: 1,003 ✭✭✭Treehouse72


    AARRRGH wrote: »
    If you consider property prices in Dublin fell 10% in the first three months of this year, anyone who held off has just saved themselves about 25k.

    That's a saving of 25k in three months.

    It'll be a similar figure next quarter, and the quarter after that, etc., until the average house price is about 150k.


    Please, for the love of God, anyone considering buying just think about this post. AARRRGH's numbers come from here, published yesterday:

    http://www.esri.ie/irish_economy/permanent_tsbesri_house_p/
    Dublin house prices fell by 10.3% in the first three months of 2010. This compares to a reduction in Qtr 1 last year of 9.0% and a reduction of 7.5% in Qtr 4 2009.
    FACT: The house price crash is getting worse, not better, despite all this garbage you hear about "green shoots" and the market "bottoming out". And what will reverse this trend? There are hundreds of thousands of empty properties, no credit, no jobs, no immigrants, rising rates, rising taxes, rising defaults and imminent firesales...how on earth can prices just stop where they are now? It simply does not stand up to logic that they would.

    At this rate you will lose c.€3,000 per €100,000 every month for the foreseeable future. About €7,000 pm on an average house price. Month in, month out for several more months and perhaps several more years. Anyone think €7,000 is an insubstantial amount of money? How about 10 months x €7,000? That's the stuff of nightmares.


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    #57
    gaeilgegrinds1
    Registered Users Posts: 1,071 ✭✭✭gaeilgegrinds1


    No interest in drugs, drink etc so maybe that's what made me so different. I'd say research what you're at, then go with what feels right.


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    #58
    Blackjack
    Registered Users Posts: 3,611 ✭✭✭Blackjack


    Treehouse72 wrote: »
    Please, for the love of God, anyone considering buying just think about this post. AARRRGH's numbers come from here, published yesterday:

    http://www.esri.ie/irish_economy/permanent_tsbesri_house_p/

    FACT: The house price crash is getting worse, not better, despite all this garbage you hear about "green shoots" and the market "bottoming out". And what will reverse this trend? There are hundreds of thousands of empty properties, no credit, no jobs, no immigrants, rising rates, rising taxes, rising defaults and imminent firesales...how on earth can prices just stop where they are now? It simply does not stand up to logic that they would.

    At this rate you will lose c.€3,000 per €100,000 every month for the foreseeable future. About €7,000 pm on an average house price. Month in, month out for several more months and perhaps several more years. Anyone think €7,000 is an insubstantial amount of money? How about 10 months x €7,000? That's the stuff of nightmares.

    +1 - I've said it before and I'll say it again, throughout the boom people lost sight of the value of Money. "The average price for a Dublin house in quarter 1 2010 was EUR 250,872".
    Stating it as "The average price for a Dublin house in quarter 1 2010 was over a Quarter of a Million Euros" gives it a slightly different ring - do people not realise this is a hell of a lot of money?.


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    #59
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Blackjack wrote: »
    do people not realise this is a hell of a lot of money?

    AH BUT SHURE RENT IS DEAD MONEY AND ITS CHEAPER TO BUY A DUPLEX IN WESTMEATH AND COMMUTE TO DUBLIN


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    #60
    johndaman66
    Registered Users Posts: 4,097 ✭✭✭johndaman66


    Blackjack wrote: »
    "The average price for a Dublin house in quarter 1 2010 was EUR 250,872".
    Stating it as "The average price for a Dublin house in quarter 1 2010 was over a Quarter of a Million Euros" gives it a slightly different ring - do people not realise this is a hell of a lot of money?.


    Getting somewhat off the topic now but its quite surprising how easy it is to provoke thoughts in peoples minds in this regard. If Dunnes or Tesco were to one day put a sign up under a certain product to say "Special Offer" in big bold text a pound to a penny they would sell many more units than the previous day even if the price were to remain the same, assuming customer numbers were to remain relatively constant and ignoring any potential illegalites such practice may entail


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    #61
    ricman
    Closed Accounts Posts: 1,559 ✭✭✭ricman


    ITS logical to rent for 2 years from now cos prices are falling,but prices in different areas fall at different rates.I cannot see any fall in prices in clonsilla in the last year , i check prices once a month.There around 200/230k for a semi d 3bed.Depends on where you live, prices vary from county to county.AT some point it makes sense for a couple if they are both working to buy a house,rather than pay rent for another ten years.
    I think small apartments with high service charges will lose value more, then 3bed homes..


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