What expenses are there owning a home?

armabelle

filbert the fox wrote: »

you wouldn't pay €25,000 for a used car without a mechanic so why would you not employ someone to check out your quarter of a million euro investment?

I might though, how do you know me?

frozenfrozen

light bulbs

armabelle

frozenfrozen wrote: »

light bulbs

oh no, now I we are over our budget

frozenfrozen

armabelle wrote: »

oh no, now I we are over our budget

knives, forks... spoons are a big one people sometimes do not consider

seamus

armabelle wrote: »

Are these compulsory when buying a home? How much do you think these could cost on a 250k house?
thankyou!

Solicitor's fee will be around 1% of the property value, but it depends on the solicitor. Beware of solicitors who charge fixed fees - they're conveyor belt outfits who won't properly check documentation and are no good for anything except a really straightforward purchase.

You will have stamp duty, which is 1% of the property value.

The bank will employ a valuer to review the property and you will have to pay that fee. It's usually €150.

If the property is over 10 years old, I would strongly advise a surveyor. This person will find things wrong with any property, even one that's brand new, that's what you pay them for. Mainly you're paying them to create a "to-do" list for after you move in, but also to spot any massive problems that mean you should walk away.
How much you spend depends on how in-depth you need them to go. A standard pre-purchase survey which lasts 3-4 hours will cost between €400 and €600.

You won't have to pay for the BER, the vendor pays for that.

These are immediate costs that you will pay when or before you buy the property.

Ongoing costs, the others have listed above. Mortgage protection and house insurance are compulsory. If you don't have either of them, the bank can theoretically call in your mortgage and take you to court.

I'm going to be honest here; if your budget is €250k and you're looking for things that you don't have to pay for, then you can't afford to buy. Set your budget accordingly. Set aside at least 5% of your budget for unforeseen expenses, both before and after you move in.

If you absolutely empty your bank account buying it, the first thing you'll find when you move in is a €3k repair or expense that you need to do immediately.

And €500 on a surveyor now will save you €30,000 when they point out that the plumbing system is probably fncked and the roof is going to need to replaced in the next 10 years.

Don't scrimp. It won't save you money.

CiniO wrote: »

On the other hand - what are the chances like? How many houses get burnt per year in Ireland?

Lots and lots. A house doesn't need to be burnt to the ground to become expensive. Even a small fire can cause damage that looks relatively minor from the outside, but needs a six-figure sum to repair to safe standards.

If you're not in a detached property it's also essential because any fire damage is your cost. If your neighbour's house goes up and takes yours with it, your neighbour doesn't pay for the damage to your house, you do. Them's the rules.
So if you don't have insurance, you will end up leaving both you and your neighbour homeless while his insurance company waits for you to get your sh1t together so the properties can be rebuilt.

As others have said, fire is not the only issue. Burst pipes can cause damage in the five figures. And again, a burst pipe on someone else's property that damages yours, is your expense.

Many of the scenarios in which your house will be damaged to the point of being unliveable are completely outside of your control.

Not having house insurance is like saying, "sure what do I need car insurance for, I'm a great driver". Needing to use your home insurance is far more likely than you think.

regi3457

but don't you pay mortgage protection only if you take out a mortgage?

tina1040

In my experience, surveyors don't check the plumbing system.

It seems to me they walk around looking for obvious faults. They don't check heating, water pressure, leaks.

iguana

OP, one thing that you have to think about when you buy, is will you want to move to a bigger/more expensive house in the future. I get the impression that you are aiming to have a particular lifestyle one that is debt free with minimal outgoings. If that's the case, then do bear future life changes when you buy as if you need to trade up and can't afford to do so outright, it will be very difficult to adjust to having a mortgage after a decade of not.

seamus wrote: »

The bank will employ a valuer to review the property and you will have to pay that fee. It's usually €150............


........Ongoing costs, the others have listed above. Mortgage protection and house insurance are compulsory. If you don't have either of them, the bank can theoretically call in your mortgage and take you to court.

The OP is talking about buying outright, so bank requirements don't apply. And while it's never a good idea to empty your savings account to buy, the fact is that when you don't have to spend a large amount of your income on rent/mortgage, it's extremely easy to save a moderate sum very quickly. Especially for someone who has a history of saving €250k prior to that.

shaunr68

Ours, small cottage in the sticks.

Well and septic tank
No telly
No gas supply
No phone (two little used PAYG mobiles, Skype for most outgoing calls)
No insurance (silly money wanted to cover 200 yo stone cottage. Insurance would cost 5% of value of house, per year!)
No bin collections - very rural, refuse companies won't come down the private road. Recycle, compost, burn paper etc in stove, leaves us with one small bag of food packaging and wrappers every week, which gets binned outside the supermarket from whence it came.

That leaves us with:

Local Property Tax 90/year
Electricity 45/month
Mobile Broadband 40/month

regi3457

iguana wrote: »

OP, one thing that you have to think about when you buy, is will you want to move to a bigger/more expensive house in the future. I get the impression that you are aiming to have a particular lifestyle one that is debt free with minimal outgoings. If that's the case, then do bear future life changes when you buy as if you need to trade up and can't afford to do so outright, it will be very difficult to adjust to having a mortgage after a decade of not.



The OP is talking about buying outright, so bank requirements don't apply. And while it's never a good idea to empty your savings account to buy, the fact is that when you don't have to spend a large amount of your income on rent/mortgage, it's extremely easy to save a moderate sum very quickly. Especially for someone who has a history of saving €250k prior to that.

Why is it not a good idea to empty your savings account to buy a house? If it gets you to live rent or debt free, I say that is pretty nice

regi3457

regi3457 wrote: »

Why is it not a good idea to empty your savings account to buy a house? If it gets you to live rent or debt free, I say that is pretty nice

Because you have nothing to fall back on if you need cash for something unforeseen be it house related or otherwise.

If I had 250k saved I've probably look at getting a mortgage of 50 to 100k and keeping 50 to 100k in cash in my savings account for unforeseen expenses and just to have cash reserves for the month you want to go on an expensive holiday or need to buy a car etc.

K.Flyer

Not having house insurance really is taking a big gamble. People are talking about the damage that fire does, let me tell you that water can also do huge damage. In one case I attended to the bill finished up at almost 60,000 euro.
They were not in the house when a maind pipe in the attic burst sending a wide spray of water across the attic. Upstairs and downstairs was ruined as well as contents.
The o.p. is paying Cash for the property, so the debate of whether Mortgage Protection Insurance is required or not is moot, so maybe leave it for a different thread.

NovaDublin

Delighted to see this thread - I am in a position now to buy - and all of these replies have saved me from posting - I am a newbie here and this is my first post

regi3457

Abel Long Someone wrote: »

Because you have nothing to fall back on if you need cash for something unforeseen be it house related or otherwise.

If I had 250k saved I've probably look at getting a mortgage of 50 to 100k and keeping 50 to 100k in cash in my savings account for unforeseen expenses and just to have cash reserves for the month you want to go on an expensive holiday or need to buy a car etc.

You would take out a loan even if you didn't need one just to keep cash in case of an emergency? This is so backwards. You do realize you have to pay interest to the bank on that loan, why on earth would you want to do that? Why not just take a loan if that unforseen expense comes up?

HeidiHeidi

regi3457 wrote: »

You would take out a loan even if you didn't need one just to keep cash in case of an emergency? This is so backwards. You do realize you have to pay interest to the bank on that loan, why on earth would you want to do that? Why not just take a loan if that unforseen expense comes up?

Because a mortgage is the cheapest money you'll get, and you may not get a loan for whatever emergency arises.

Have to say I would never empty my bank account to buy a house, I would absolutely want to keep some ready cash available for unforeseen emergencies.

I also would never contemplate not having house insurance - it might be seen as dead money, or bad value - but in the event that you actually need it, not having it could ruin you.

regi3457

HeidiHeidi wrote: »

Because a mortgage is the cheapest money you'll get, and you may not get a loan for whatever emergency arises.

Have to say I would never empty my bank account to buy a house, I would absolutely want to keep some ready cash available for unforeseen emergencies.

I also would never contemplate not having house insurance - it might be seen as dead money, or bad value - but in the event that you actually need it, not having it could ruin you.

oh dear

iguana

regi3457 wrote: »

Why is it not a good idea to empty your savings account to buy a house? If it gets you to live rent or debt free, I say that is pretty nice

It's not a good idea if you can help it. If you have €250k saved, it would be sensible, if possible, to buy something for €230k. So after costs you'd still have €10-15k for emergencies. But, as I said, if you don't, it's still really easy to save a quite a bit very quickly when you're not paying rent/mortgage. As well as that, ime, when you own outright at a youngish age it can change your whole lifestyle in a way that makes it easy to save a larger sum than you would have been paying in rent/mortgage. Not having debt/huge rental outlay changes your life.

Michael D Not Higgins

tina1040 wrote: »

In my experience, surveyors don't check the plumbing system.

It seems to me they walk around looking for obvious faults. They don't check heating, water pressure, leaks.

There's only so much you can actually check in a survey. You can't go knocking holes in the walls to check the pipework of a house you don't own. If you want the surveyor to do other things that you feel are important you can ask them to do that and they will quote you a figure for the additional work.

regi3457

regi3457 wrote: »

You would take out a loan even if you didn't need one just to keep cash in case of an emergency? This is so backwards. You do realize you have to pay interest to the bank on that loan, why on earth would you want to do that? Why not just take a loan if that unforseen expense comes up?

It's not even just for emergencies it's for buying stuff for the house or other stuff you might want to spend money on. I'd sleep a lot easier at night having a nice wad of cash in savings account and a small mortgage than emptying my savings account. You will pay back a 50 or 100k mortgage in a few years and pay only minimal interest.

It's well worth the cost of the interest. I've even done similar buying a car, could have bought for cash but got a loan for half the cost so not to use up my savings.

regi3457

Abel Long Someone wrote: »

It's not even just for emergencies it's for buying stuff for the house or other stuff you might want to spend money on. I'd sleep a lot easier at night having a nice wad of cash in savings account and a small mortgage than emptying my savings account. You will pay back a 50 or 100k mortgage in a few years and pay only minimal interest.

It's well worth the cost of the interest. I've even done similar buying a car, could have bought for cash but got a loan for half the cost so not to use up my savings.

I find this logic to be backward. You would put yourself in debt just in case you may need money and pay banks back voluntarily for this money you borrowed which you didn't actually need?

These are strange days we live in.

sKeith

Some people feel that it is better to have access to cash that you do not need, then not have access to cash when it is vital. They are willing to pay small fee for this protection.

SarahMollie

regi3457 wrote: »

You would take out a loan even if you didn't need one just to keep cash in case of an emergency? This is so backwards. You do realize you have to pay interest to the bank on that loan, why on earth would you want to do that? Why not just take a loan if that unforseen expense comes up?

Actually no its not. If you spend all the money you have in the world, sure you have an asset but you're completely illiquid.

I could have taken a smaller mortgage by clearing out my savings, but there was no way I was going to do that. I'm currently over paying, and going to save myself on the interest that way. Its worth it to be to have a safety net if my circumstances were to change.

No guarantee anyone will loan to you as/when you need the money. What if the reason you need it is that you've lost your job? Or you've had a injury/accident/illness that impacts your ability to earn. Good luck getting a loan then.

regi3457

SarahMollie wrote: »

Actually no its not. If you spend all the money you have in the world, sure you have an asset but you're completely illiquid.

For a while but you will save more over the coming months without the debt, why would you need liquid after you purchase a house? for groceries?

it is backward thinking that has somehow become normal thinking in our society to take a debt just to have money in case of something happening, really backward, seriously

Claw Hammer

banks will lend you an umbrella when it is raining and take it back when it rains.

Michael D Not Higgins

regi3457 wrote: »

why would you need liquid after you purchase a house?

That's already been answered. It's a safety net for the unexpected.

Balmed Out

Only you know your personal circumstances and without knowing that internet strangers cant say whether keeping some back or using it all make more sense.

regi3457

Michael D Not Higgins wrote: »

That's already been answered. It's a safety net for the unexpected.

ok so we should all have 25k in our bank accounts at all times as a safety net instead of putting it towards a mortgage (for those that have them)?

CruelCoin

regi3457 wrote: »

I find this logic to be backward.

It's simple cost-benefit analysis.

Which do you value more? Reduction of monies paid or security?

You're placing value on the former when others are placing it on the latter.

CruelCoin

regi3457 wrote: »

ok so we should all have 25k in our bank accounts at all times as a safety net instead of putting it towards a mortgage (for those that have them)?

I can afford to put some money towards the mortgage and pay it off a little earlier.

However i'm not going to put it all against the mortgage.
Rainy days happen, and i'd rather not be the eegit without an umbrella when the cloud bursts.

Hombre Lobo

I'm in this very situation right now. I have the cash to buy the house outright but after expenses and what not I'll have less than maybe 20k in cash.

I am leaning towards a small mortgage of 50k max and my reasons are the following:

I'm single so I have no partner or wife for additional household income should the shtt hit the fan.

I have zero household possessions. So no TV, couch, bed, pots, pans cutlery, hoover, lawnmower, etc. Nothing other than a lamp . This is going to eat into most of my cash.

I plan on replacing my car in the next year or so, which is going to eat into my cash.

A 50k mortgage will cost me about 220 a month over 30 years. My plan is to over pay this as much as I can so that i can wipe out the debt in 5 years or less. There are some mortgage clauses with BOI that can restrict this if you go the cash back route or fixed rate route.

I know I'm going to pay a premium just to have access to cash in the event I need it but this is the risk i have to weigh up.
Mortgage free and no debt with little to no cash left or have a small monthly payment for a few years with access to a nice cash deposit, but still having the option to overpay my mortgage to clear it as soon as possible.