First time buyer - Mortgage - Where to start

boris1234

Hi,

Myself and my OH are currently renting and working in Dublin. We're thinking of trying to buy something instead of paying out so much on rent. Probably a one or two bed.

Currently we only have 2-3 k savings but parents are willing to help with deposit.

My question is, given that our own savings are quite low and the bulk of the money would be coming from parents contributions would the bank even consider us for a mortgage at this stage?

Would we need to have a greater record of saving? We've been paying out 1250 in rent for more than a year so at least there is a record of that but wondering are we wasting our time looking for a mortgage now without more of our own savings.

Thanks

Archaeoliz

Whether they'll consider you depends on quite a few things. There's the 10% deposit (up to €220k and 20% for anything over) which you seem to have thought of. Beware of Capital Acquisition Tax on gifts and get proper advice. I am not an accountant!

I sort of presume from what you've been saying that you've not been putting away regular savings every month and how that will look to the bank is your greatest concern. Is that right? We haven't been putting away savings every month but are approved for a mortgage. We are now fourth time buyers and have our deposit, we are well below the 3.5x salary cap and crucially our rent is nearly double what out mortgage payments will be. Also we have no credit card debt or loans, even though we have three credit cards we don't tend to use them.

Have you checked out online calculators from your bank to see if very generally they'll take you on? Or perhaps talked to your bank and/or a broker?

boris1234

Archaeoliz wrote: »

Have you checked out online calculators from your bank to see if very generally they'll take you on? Or perhaps talked to your bank and/or a broker?

Thanks for your reply.

I've only used the online calculator on mortgages.ie to calculate what the repayments would be. Must look at the banks own calculator.

Going by the repayments calculator, the repayments on the size of the mortgage we are looking for would be a lot less than the rent we are paying.

It's early days so we haven't talked to the bank or a broker yet. I'm not really sure where to start in terms of who to talk to.

I do have a small credit card debt of a few hundred euro which I plan on clearing completely by end of January.

joey100

If your parent's do 'gift' you money they will have to fill out a standard enough form just to say that the money is a gift and they won't be looking for you to repay it.

Don't forget to factor in other things to the mortgage repayments as well, life insurance and home insurance, not generally huge but you need to have these two things to get the draw down.

I would have thought that 3-4k is not a huge amount of savings so maybe concentrate on building this up as quick as you can.

Jen44

we just bought our second house in Sep we received a gift of 24k on top of our savings from my parents towards the deposit. They just had to sign a declaration form with the solicitor to say they had no interest in the property or getting back the money given as a gift

sKeith

Pick any house for sale in the ball park figure of what you want to buy. Print out the ad for reference.
Call any bank and ask for an appointment for a mortgage consultation. The banks mortgage consultant will walk you through everything. Get second opinions from other banks mortgage consultants and mortgage brokers. If you are not on your way to approval in principle after a consultation, at least you will have goals set out by them. (need to save another 2k or need a payrise or need to aim at cheaper house or whatever)

boris1234

Thanks for the replies. I guess the first step anyway is to talk to the bank and see where we stand.

Also, does anyone know if money given as a gift from parents would be liable for tax?

Can't find a clear answer to this online

Archaeoliz

boris1234 wrote: »

Thanks for the replies. I guess the first step anyway is to talk to the bank and see where we stand.

Also, does anyone know if money given as a gift from parents would be liable for tax?

Can't find a clear answer to this online

Try this:
http://www.revenue.ie/en/tax/cat/

Can't say it's particularly clear but it might be a start?

joey100

http://www.revenue.ie/en/tax/cat/thresholds.html

That page has the gift tax exemption rates from parent to child, looking at around 280,000. Not sure if this is a yearly figure or a total figure over your lifetime.

athtrasna

joey100 wrote: »

http://www.revenue.ie/en/tax/cat/thresholds.html

That page has the gift tax exemption rates from parent to child, looking at around 280,000. Not sure if this is a yearly figure or a total figure over your lifetime.

Lifetime. There's been a lot of publicity and discussion about this recently especially in the run up to the budget.