Buying my first house

kala85

I am thinking of buying my first house and I am looking for some advice.
What steps are involved in buying the house?
How much of a deposit would be enough - 20k, 30K?
Also what other costs are involved in the transaction and how much would they cost?

Optimalprimerib

kala85 wrote: »

I am thinking of buying my first house and I am looking for some advice.
What steps are involved in buying the house?
How much of a deposit would be enough - 20k, 30K?
Also what other costs are involved in the transaction and how much would they cost?

The deposit at a minimum is 10% of the house cost. Solicitors fees you have to be careful of as there is their initial fee plus stamp duty and other hidden charges. Mine was about 3 grand iirc. You will need to pay a valuer and an engineer to check the house about 200 each. Then of course furniture and utensils. It is never ending.

kala85

How easy ( or difficult) is it to get a loan from the bank?? I have a deposit of about 20k and the cost of the house is roughly 130 to 160k. I have seen on the property register that a similiar house in the estate went for 130k. I have a permanent public sector job.

Also could I rent out a room to a tenant or two and what are the tax implications of this?

wowy

Can't answer re. the availability of finance, but this will give you all the answers for renting out rooms:

http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

riclad

you might get an 80 per cent loan,
I think they lend 3 or 4 times your salary,approx
each bank has different lending policys,
you can go to a mortgage broker ,he, ll give you advice and help you get a loan.TRY and save as much as you can every week,month ,
they look at your spending,expenses and saving record.
And they check could you pay loan if rates went up by 2 per cent approx
you,d need deposit at least 20 percent of house price.

L1011

kala85 wrote: »

How easy ( or difficult) is it to get a loan from the bank?? I have a deposit of about 20k and the cost of the house is roughly 130 to 160k. I have seen on the property register that a similiar house in the estate went for 130k. I have a permanent public sector job.

Also could I rent out a room to a tenant or two and what are the tax implications of this?

Assuming your credit history isn't in ribbons you should be able to get 3-3.5x salary easily enough. You have enough for the deposit/fees on a 130k house but you may have to sit on cardboard boxes for a few months...

Renting a room won't be considered for mortgage purposes anymore, buy you can take in 10k (from memory) tax free at the moment.

L1011

riclad wrote: »

you,d need deposit at least 20 percent of house price.

10% is sufficient still. AIB will in theory accept 8% (92% mortgage). But nobody lends you the fees anymore either so you will need a bit more than the bare 8%/10%.

gmisk

Optimalprimerib wrote: »

The deposit at a minimum is 10% of the house cost. Solicitors fees you have to be careful of as there is their initial fee plus stamp duty and other hidden charges. Mine was about 3 grand iirc. You will need to pay a valuer and an engineer to check the house about 200 each. Then of course furniture and utensils. It is never ending.

AIB do 92% mortgages so 8%.

riclad

aib do 92 per cent,But you may end up getting boi or irish permanent loan, So save as much as you can without
putting yourself thru hardship.

Boots234

Similar to kala85 I'm considering buying. I'm wondering how far back do banks look at the credit card history? Would it 12 months or longer?

roro2

Boots234 wrote: »

Similar to kala85 I'm considering buying. I'm wondering how far back do banks look at the credit card history? Would it 12 months or longer?

It could be longer. If the credit card is with another institution they would probably look for 6-12 months of statements, assuming they didn't see anything in those statements that indicated they should then look further back. If the card is with the same institution, it would be a lot easier to look further back and would depend on what the recent history looked like, strength of application, lender preference, etc.

Boots234

Thanks for that. Can they refuse your application based on your credit card history e.g. if you were lodging money fro online betting?

roro2

They can refuse it on whatever grounds they like. That would definitely be a negative, but would depend on the frequency, amounts, etc and the overall strength of the application. It could well result in a declined application for marginal cases - the best advice is to make sure any betting doesn't show up on statements.

Henry Ford III

I think anyone borrowing 92% or anywhere near it is significantly overcommitting.

gmisk

Henry Ford III wrote: »

I think anyone borrowing 92% or anywhere near it is significantly overcommitting.

I disagree.
I am getting a 92% mortgage the extra bit of money will be handy initially to get a house up to the standard I want..I have no debts or loans outstanding..I think it very much depends on individual circumstances.

Henry Ford III

gmisk wrote: »

I disagree.
I am getting a 92% mortgage the extra bit of money will be handy initially to get a house up to the standard I want..I have no debts or loans outstanding..I think it very much depends on individual circumstances.

65% gearing is about the most I'd consider. At 92% a relatively small further retraction in values will have you in negative equity.

kala85

MYOB wrote: »

Assuming your credit history isn't in ribbons you should be able to get 3-3.5x salary easily enough. You have enough for the deposit/fees on a 130k house but you may have to sit on cardboard boxes for a few months...

Renting a room won't be considered for mortgage purposes anymore, buy you can take in 10k (from memory) tax free at the moment.

Is this gross salary or nett salary. There is a big difference in gross and nett in the public sector with usc charge and pension levy as well as tax.

Is now the time to buy or am I better off renting until I get a more substantial deposit. Instead of having 20k,I could have 30k saved next year. I can just about save 8k or 9k per year as car loan is presently cleared off.

kala85

Sorry to post again. Regarding the rent a room - Is the tax relief only on one room - I couldnt rent out two rooms by any chance??
I have 2k of a cu loan and 300e on one credit card and 800e on another.
I generally pay a few quid off the credit cards each month, maybe 10e or 50e . Am i better off to clear the credit cards altogether.

murph226

Henry Ford III wrote: »

65% gearing is about the most I'd consider.

In an ideal world!

StillWaters

kala85 wrote: »

Sorry to post again. Regarding the rent a room - Is the tax relief only on one room - I couldnt rent out two rooms by any chance??
I have 2k of a cu loan and 300e on one credit card and 800e on another.
I generally pay a few quid off the credit cards each month, maybe 10e or 50e . Am i better off to clear the credit cards altogether.

Pay off those credit cards. It makes no sense to have 20k savings and be paying the minimum off credit cards.

You can rent out as many rooms as you want, but as soon as your total income from rental exceeds 10k you have a tax liability.

Wolfsberg

You should probably do what I did a few weeks ago...
Make an appointment to see someone in the bank. Tell them you want to own your own home in the next X number of months or years and ask what hoops you'll need to jump through to get a mortgage. I got great advice. Any advice you get on here is second or third hand so it won't necessarily be right for you.

For what it's worth I was told that I would need 10% of the money I need saved, plus the solicitor's fees etc. My bank will lend me 4.5 to 4.75 times my gross annual salary. I must be seen to have deposited monthly into a savings account, not lived in my over draught, or missed any/ many direct debits for at least 12 months.

Other good advice could be not to have things that could be viewed as irresponsible on your bank statements such as online gambling deposits or debit card tranactions in nite clubs every weekend.

Of course a steady job is extremely important. I discussed with my advisor that it is virtually impossible (unless you have a very good income) to save for a house deposit while renting a property, so you may need to get somewhere to stay rent free (with parents, family etc)

It's nowhere near as daunting after you have a proper chat with someone who actually knows what they're on about and I guess that will only be a mortgage broker or bank worker.

Good luck!

L1011

kala85 wrote: »

Is this gross salary or nett salary. There is a big difference in gross and nett in the public sector with usc charge and pension levy as well as tax.

Is now the time to buy or am I better off renting until I get a more substantial deposit. Instead of having 20k,I could have 30k saved next year. I can just about save 8k or 9k per year as car loan is presently cleared off.

Gross, and before pension contributions be they private or the public sector ones. Though they do also take net in to consideration particularly when it comes to how long a term they'll offer you - I wasn't offered the 15 year I wanted for instance.

As goes is now the time to buy - feck knows.

riclad

You can rent out 2 or 3 rooms as long as rental income doesn,t
go over 10k per year.NO need to register with prtb under rent a room scheme.
The bank look at all your loans, credit card debt etc when they are going thru loan application.
With small amounts on credit cards better to just pay em off asap before you apply for mortgage.