Help to Buy Scheme and mortage

kilkenny31

Hi Guys,



I'm looking for some advice. I have recently graduated from college and im currently working my first job. It is a permanent position which pays 35000 p.a. I am hoping to apply for a mortage next year along with my wife. She is studying at present and will have a permanent position next september(2019).

What is the earliest we could apply for a mortage? We were hoping that we could start building sometime in late 2019. We have a site for a house with planning permission so were instructed that we would not need a deposit although we would still aim to save a substatial amount of money.



Also is it likely that we would recive anything from the help to buy scheme as i am only beginning to pay tax now?

witchgirl26

OP per Revenue's website:

The amount that you can claim is the lesser of:

€20,000
5% of the purchase price of a new home. For self-builds this is 5% of the completion value of the property
the amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in the four years before your purchase or self-build.
The maximum payment is €20,000 per property. This cap applies regardless of how many people enter into a contract to buy a house.

You could apply whenever for a mortgage but if your wife is studying then she will be classed as a dependent. As you are married, you can't apply as a single applicant.

In terms of waiting for her to be fully employed, generally the application can go in but the bank will want you both to have passed your probation periods in work (or receive a letter stating there isn't any). the scheme is (currently) only running until December 2019, this would mean you'd have to apply before then.

You do still need a deposit for the self-build so that information was wrong. The bank will only lend a maximum of 90% of the value of the house (projected value I think for self-build) and 3.5 x salary. It's no harm to maybe have a call with a mortgage broker or arrange a meeting with a bank to understand what you'll need in place for a self-build as it is different to a purchase.

kilkenny31

witchgirl26 wrote: »

OP per Revenue's website:

The amount that you can claim is the lesser of:

€20,000
5% of the purchase price of a new home. For self-builds this is 5% of the completion value of the property
the amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in the four years before your purchase or self-build.
The maximum payment is €20,000 per property. This cap applies regardless of how many people enter into a contract to buy a house.

You could apply whenever for a mortgage but if your wife is studying then she will be classed as a dependent. As you are married, you can't apply as a single applicant.

In terms of waiting for her to be fully employed, generally the application can go in but the bank will want you both to have passed your probation periods in work (or receive a letter stating there isn't any). the scheme is (currently) only running until December 2019, this would mean you'd have to apply before then.

You do still need a deposit for the self-build so that information was wrong. The bank will only lend a maximum of 90% of the value of the house (projected value I think for self-build) and 3.5 x salary. It's no harm to maybe have a call with a mortgage broker or arrange a meeting with a bank to understand what you'll need in place for a self-build as it is different to a purchase.

Thank you for your reply. So im taking that if we were to apply for the help to buy scheme we wouldnt be able to claim very much as I will have payed nowhere near 20000 in tax in 1 year and my wife will have paid none.

We are not planning on applying for the mortage until she is in employment but we are worried that we will have to wait 12 months after the date she starts working.
The advice recieved regarding the no deposit was from a bank, they were stating that as we owned the site that this would act as the deposit.

witchgirl26

kilkenny31 wrote: »

Thank you for your reply. So im taking that if we were to apply for the help to buy scheme we wouldnt be able to claim very much as I will have payed nowhere near 20000 in tax in 1 year and my wife will have paid none.

We are not planning on applying for the mortage until she is in employment but we are worried that we will have to wait 12 months after the date she starts working.
The advice recieved regarding the no deposit was from a bank, they were stating that as we owned the site that this would act as the deposit.

No you won't get too much based on working history unfortunately.

You wouldn't have to wait until she's in 12 months but definitely until she's passed probation (or just about to).

I'd double check that advice. From reading on a couple of bank's websites, you'd still have to have a deposit saved for the actual building of the property. Otherwise it would be a 100% mortgage on the house which isn't granted at all these days.

Trish56

You were advised correctly if you own the site you can borrow 100% of the construction costs subject to valuation. Most lenders require you to be in permanent employment for 1 year however permanent tsb will consider your application once probation is completed and you are in permanent employment for 6 months.

You will however have to show repayment capacity of a combination of rent/savings of the monthly stressed repayment i.e if your stressed monthly repayment is 1k you need to provide evidence of either savings or rent and savings for the previous 6 months. Lenders will also accept gifts as deposits.