Hoping to buy - please advise me

tricia2011

Hi

I am new here and am hoping to get some advice.

I am 32 and hoping to buy a house in the next few year or two. I am wondering what I need to do to prepare for this.

I will be buying it by myself, I work in the public sector and my take home pay is approx 2200 per month. permanant post. at the minute I have a credit card bill of 2500. I am trying to safe hard and will have this paid off in the next few months.

I am thinking if buying a house in the region of 150,000 (if possible).

thats means I need a deposit of 15,000.

I am thinking about 600-700E of a mortage repayment per month or is this unrealistic.

I would be very grateful of any advice,
I really have no one (family or otherwise) to ask.

is there anything else I should be doing, I just want to be well prepared.

thank
T

Idbatterim

what kind of property are you looking to buy and where?

mari2222

1. you need to save for the deposit - that means living without wasting money and putting spare cash into an account that pays interest - some of the regular saver accounts offer 3 or 4 percent at present; you can open that type of account online. Once you commit to a regular saver account, it will test your ability to put away money month by month (like repaying a mortgage).

2. You need to clear the credit card bill before you do anything else - you are paying 15-20% interest on it.

3. Pick a location you are interested in and watch the market in that place .....prices may drop a further bit, so over the next couple of years may be a good time for you.

4. Learn all you can about home maintenance/ budgeting etc...this will help when you buy.

5. Recognise that you are being ambitious in planning to own a house as a single buyer - you will have to make sacrifices for this that a couple would share. Try to understand your motivation for owning - knowing your reasons may help you deprive yourself of other things, as you will have to do, to save for and repay the mortgage.

6. Get a parttime job to increase your income.

The_Conductor

tricia2011 wrote: »

I am 32 and hoping to buy a house in the next few year or two. I am wondering what I need to do to prepare for this.

In short- you need to clear any other debt whatsoever and be able to show onging savings more than sufficient to cover any future rate hikes

tricia2011 wrote: »

I will be buying it by myself, I work in the public sector and my take home pay is approx 2200 per month. permanant post. at the minute I have a credit card bill of 2500. I am trying to safe hard and will have this paid off in the next few months.

If you have a take home pay of EUR2200 a month, and still have a credit card bill of EUR2500 a month- I'd be sitting down and seriously looking at my budget. You would to me- at a very cursory glance, appear to be living beyond your means. You need to clear this debt in the first instance- but you also need to do a thorough appraisal of your outgoings and see how/where you can make savings.

tricia2011 wrote: »

I am thinking if buying a house in the region of 150,000 (if possible).

The way the market is going- there shouldn't be any issue finding a house in the region of EUR150k almost anywhere in the country. Economists do not expect house prices to bottom out in the next year or two though- and price falls are actually accelerating again- so I'd be loathe to suggest anyone buy in the immediate future- its far too high a risk

tricia2011 wrote: »

thats means I need a deposit of 15,000.

Who is going to give you a 90% mortgage? 80-85% would be considered normal for a house and as low as 50% for an apartment/duplex....... Check it out- you really need to get saving- and that 15k figure in your head is optimistic in my opinion. Banks/lending institutions are not giving money out like they used do........

tricia2011 wrote: »

I am thinking about 600-700E of a mortage repayment per month or is this unrealistic.

A repayment of 600-700 on a EUR150k mortgage is a generous allowance- *at todays rates*. You can fix for a determined length of time, if you so wish- but current products are firmly around the 4.5% rate- and its wishful thinking that the ECB will reduce rates again given their only at 1.5%. Making an allowance for a 6% interest rate- which is probably a lot higher than they would go, but will give you leeway to cover the unforeseen eventualities- would mean a figure of EUR900 might be more applicable........

You really need to cater for worst case scenarios........

Ps- the fact that you're public sector in a permanent job- doesn't really mean a lot anymore- mortgage lending is back at levels last seen in 1968-1969- banks despite the rhetoric of their advertising, really do not want to lend anyone money under any circumstances whatsoever........

mari2222

Tricia

Some other thoughts:

1. as you are in the public sector, can you transfer to a "cheap houses" part of the country - you can now get a new 4-bed semi for less than €80K in the midlands.

2. If you are or will be supporting a child, your €2200 is really much less.

Chris_5339762

smccarrick wrote: »

Who is going to give you a 90% mortgage? 80-85% would be considered normal for a house and as low as 50% for an apartment/duplex....... Check it out- you really need to get saving- and that 15k figure in your head is optimistic in my opinion. Banks/lending institutions are not giving money out like they used do........

Ulster bank offered me one, on a similar amount, with lower take home pay. In the end I had a sizable deposit to bring that down to about 75% Loan-To-Value. [And I didnt go for UB either]

PCPhoto

smccarrick wrote: »

If you have a take home pay of EUR2200 a month, and still have a credit card bill of EUR2500 a month- I'd be sitting down and seriously looking at my budget. You would to me- at a very cursory glance, appear to be living beyond your means. You need to clear this debt in the first instance- but you also need to do a thorough appraisal of your outgoings and see how/where you can make savings.

I think everyone else has read it as €2,500 debt on a credit card - not monthly repayments of €2,500....I could be wrong but thats for the OP to clear up.

OP - like another poster has said your deposit amount might be a tad too optimistic - you may need to save more than the proposed budgeted €15K

I would suggest minimum 20% maybe even 25% will be required as a deposit - it may take longer to get the money together but at a guess house prices will drop for the next 3+years so you may benefit.

The_Conductor

PCPhoto wrote: »

I think everyone else has read it as €2,500 debt on a credit card - not monthly repayments of €2,500....I could be wrong but thats for the OP to clear up.

Sorry that was what I meant too......

The_Conductor

Chris_5339762 wrote: »

Ulster bank offered me one, on a similar amount, with lower take home pay. In the end I had a sizable deposit to bring that down to about 75% Loan-To-Value. [And I didnt go for UB either]

UB have new lending restrictions- as a result of their annual loss that RBS reported last week. I'm not a customer of theirs- and I have no reason to believe they are as hamstrung as BOI/AIB etc- but conditions have changed for them too.......

A 75% LTV mortgage is a far safer proposition for any lender- than a higher percentage mortgage- which is why they are shying away from lending to those who haven't saved their deposit and shown the capacity to save in this manner.

quinnie123ie

tricia2011 wrote: »

thats means I need a deposit of 15,000.

15k = 10%, which is OK, but you also need to consider the following, and the Bank will expect you to have the cash to cover this when the time comes...

Solicitors Fees (Bout 2k)
Stamp Duty > 1%
Land Registry Fee's > not sure how much
*furnishing your new home
and more...
basically it will bump your 15k up to around 22k or more before furnishing...

There are a few more fee's, best thing to do is to speak to an adviser in the bank, they will go through everything with you. You could also try affordable housing, You can get 97% Mortgage on affordable housing, and you are exempt from stamp duty...

Dont worry about drops in prices if you are buying a home, not an investment...

Good luck!

Tigger

quinnie123ie wrote: »

Dont worry about drops in prices if you are buying a home, not an investment...

Good luck!

this is not good advice

a home is the biggest investment most people will ever make