Do these numbers add up?

Logicost31

Hi,
Myself and my other half are in the (slow) process of saving up to buy our first house. I just want to bounce these numbers off of you good people to see if they're even close so that we can manage our expectations & adjust our savings/timescale accordingly.

We're first time buyers, so deposit-wise we'll need 10% for the first €220,000 and 20% thereafter.

What we pay in rent currently is €1250 PM and we're comfortable with that, so would be looking for a mortgage with repayments at roughly that level.

A house price of around €270,000 would break down as deposit of €32,000 & a mortgage on the remaining €238,000.
Am I right in thinking that over a 25 year mortgage the monthly repayments should be roughly in line with what we're currently paying?

Along with €32,000 for the deposit I'm guessing we'll need at least another €8,000 saved to cover:
Stamp duty @1% €2700
Legal Fees: €2000 (total guess for this)
Admin fees, engineers survey, bank fees etc. : €1000 (again..guessing)

Remainder of the €8k for getting the basics of new kitchen appliances, a bed, a mattress & a couch.

So have I missed /overlooked any major costs?
Over or underestimated anything?

suave.4u

Looks like you have everything planned. From my experience, add 3K to that 8K that you have set aside to buy stuff

Molzer2

There's a handy mortgage calculator on bonkers.ie if you want to play with numbers!

ted1

Don't forget the extra costs you'll incur.

House insurance will cost about 300 a year, life assurance wil cost about the same as will property tax as well bins.
So that's 1200 a year extra before maintenance, furniture etc

Archaeoliz

You'll also need a salary of at least €68k (new CB rules at 3.5 times salary; €68k x 3.5 = €238k) to get mortgage approval.

Logicost31

ted1 wrote: »

Don't forget the extra costs you'll incur.

House insurance will cost about 300 a year, life assurance wil cost about the same as will property tax as well bins.
So that's 1200 a year extra before maintenance, furniture etc

Thanks, good to have rough numbers for those extra bills!

Logicost31

Archaeoliz wrote: »

You'll also need a salary of at least €68k (new CB rules at 3.5 times salary; €68k x 3.5 = €238k) to get mortgage approval.

Thanks, we'll be fine on that front as long as it applies to combined salaries!

spaceHopper

If it's an older house you might want to (or need to) rewire it and upgrade the insulation and heating you would do a lot for 20K don't panic about it just keep it in mind and use it against the EA when bidding.

Logicost31

spaceHopper wrote: »

If it's an older house you might want to (or need to) rewire it and upgrade the insulation and heating you would do a lot for 20K don't panic about it just keep it in mind and use it against the EA when bidding.

Cheers, yeah for the top end of our budget we'd be looking for a place that wouldn't need (much) work done on it, anything expensive like that would need to be reflected in a lower price.

Am I right in thinking though that the mortgage will only cover the house cost? As in if a house cost €200k but needed €35k worth of work straight away to make it habitable, the banks would only lend us the €200k?

JoeyJJ

Less than the 200, as you will need to provide equity. The valuer will value it for the bank and get 90% (80%) of that value depending on thresholds.

Alf Veedersane

Logicost31 wrote: »

Legal Fees: €2000 (total guess for this)

I'd have said you'd get the legal side of things looked after for ~€1500.

Survey and valuation ~€500

Logicost31

JoeyJJ wrote: »

Less than the 200, as you will need to provide equity. The valuer will value it for the bank and get 90% (80%) of that value depending on thresholds.

Sorry, my example was bad. I know we'll need to pay the deposit, I was wondering if we bought a project would the mortgage given just cover the house cost minus the deposit? or do banks allow you to take a larger mortgage than the cost of the house to have the money up front to pay for the work needed?

Fol20

I was wondering can you count rental income as part of your salary. Would it be your gross rental income or net income as well that they would calculate?

wench

Logicost31 wrote: »

What we pay in rent currently is €1250 PM and we're comfortable with that, so would be looking for a mortgage with repayments at roughly that level.

A house price of around €270,000 would break down as deposit of €32,000 & a mortgage on the remaining €238,000.
Am I right in thinking that over a 25 year mortgage the monthly repayments should be roughly in line with what we're currently paying?

The bank will stress test your repayment capacity at current interest rate + 2%
So if your current rent + amount you are saving towards deposit would cover that level of payment, grand. Otherwise you'll need to revise the amount borrowed down.

Logicost31

wench wrote: »

The bank will stress test your repayment capacity at current interest rate + 2%
So if your current rent + amount you are saving towards deposit would cover that level of payment, grand. Otherwise you'll need to revise the amount borrowed down.

I tried out the mortgage calculator on mortgages.ie and added 2% to the interest rate with their stress test calculator. Monthly repayments went up by roughly €300, which is much less than we're saving monthly thankfully.

seamus

Logicost31 wrote: »

Am I right in thinking though that the mortgage will only cover the house cost? As in if a house cost €200k but needed €35k worth of work straight away to make it habitable, the banks would only lend us the €200k?

Correct. In that case they would expect that you would get a maximum mortgage of €180k and then pay the €35k upgrade costs out of your own cash.

One thing to keep in mind is that the bank will get a valuation done, which will include an assessment of the state of the property. While their job really (in an assessor's own words) is to make sure the property exists, if the valuer reports that the property looks like it's in rag order, the bank may refuse to honour the loan offer on the basis that you will need to borrow money to do it up (affecting your ability to repay), and the fact that they may not be able to resell it at the same price.

riclad

35k is a lot,to spend ,on top of the mortgage,
is this all on repairs ,
or on things like putting in a new kitchen ,new windows .carpets etc
A structural survey lists ,all faults, things that need fixing,
and will give an estimated cost on this.
EG it will not list things like a new kitchen,new bathroom ,shower etc
extra insulation,carpets,wallpaper ,
etc as these things are not strictly needed to live in a house.
AND can be done over a 2-3 year period after you move in.
don,t forget house insurance .