Do's and don'ts for first time buyers

Febreeze

Malcolm Late Funeral wrote: »

People are overthinking the whole preparing to purchase imo. Consistent saving is pretty much all you need to have and then it’s just down to your major outgoings like kids, other loans and of course your salary to calculate the amount.

I wouldn’t be willing to give up or curtail most of the stuff some people are doing or jump through the hoops many are. I got mortgage approval as a single applicant a few years ago but didn’t buy at the time in the end but I did nothing to prepare for it except lodge money my paddy power account in cash rather than from my bank account. I was going out 2/3 nights per weeks, loads of eating out, buying things I wanted etc etc but I was saving a lot too and had far more than 10%. Nothing was questioned and I got the approval no problem.

I’ll be going for a self build mortgage in the next year with my wife and to be honest I’m not even convinced it’s worth avoiding having gambling or lotto on my statements as I don’t think it will be an issue. Ok I’ve made the effort to top up betting using PayPal as statements from PayPal are not usually requested but lotto I have to use my irish bank card.

I’ve pretty much been consistently saving all along so I’m not particularly worried about getting a mortgage due to any of my spending habits etc.

I wish I was that laid back haha!

My partner is though and although he pretty much just cancelled what he could just to have an easier life I'm sure he's probably on the same page as yourself and thinks we'll if I just continue saving then well be grand. He's seen a lot of benifits from cancelling accounts though. I guess it's the best of both worlds. I know I have because I can put a small bit to the side for the little bits that I know I can happily go out and buy. I think that's more the female mindset I have haha!

Over the last few days I have notice that it seems a lot easier than I taught and Im less stressed out about thinking of the what ifs and I'm more focus on the what we can do and it's working. I think I over mentally prepared myself the wrong way and kept thinking because we rent and I'm temporarily out of work that it wasnt possible. But it seems that its very possible and to put to the side a lot of expectations and focus on what we are doing now and things will fall into place.

When things go back to normal we plan on making a point to do something every couple of weeks to get out and enjoy what we can do so I'm looking forward to that.

Good luck with the self build :-)

Febreeze

CBear1993 wrote: »

DONT :

Take a monster of a sh*te that results in the same stench in the property when you go to a viewing after getting on very well with the estate agent.

Thréad lightly on water and view all options rather than believing an estate agent is genuine and is giving us what we want?

Rhythmics

What are the chances of slightly "jokey" transfers affecting an application?

I live with friends, and my rent goes to the "Lead tenant" as a standing order, and it comes out as "Dickrent" (My name is Richard.)

I'm hoping to start applying in the next 6 months, should I change this to something more suitable to look like a real grownup?

Rhythmics

Rhythmics wrote: »

What are the chances of slightly "jokey" transfers affecting an application?

I live with friends, and my rent goes to the "Lead tenant" as a standing order, and it comes out as "Dickrent" (My name is Richard.)

I'm hoping to start applying in the next 6 months, should I change this to something more suitable to look like a real grownup?

The bank isn't going to discriminate against someone based on their sense of humour, so it won't affect anything financially. That said, surely you're not so committed to the joke that it wouldn't bear changing just to avoid an awkward mortgage meeting?

Febreeze

Rhythmics wrote: »

What are the chances of slightly "jokey" transfers affecting an application?

I live with friends, and my rent goes to the "Lead tenant" as a standing order, and it comes out as "Dickrent" (My name is Richard.)

I'm hoping to start applying in the next 6 months, should I change this to something more suitable to look like a real grownup?

Haha I love it!

I have my savings going into credit union and I literally have it down as "Deposit Money". I have taught about changing it to make it sound less silly and just have "Savings" but sure they get the point. I forward on my tax money to another account known as "Tax Money" as I know during this I'm not getting taxed and my job is receiving covid 19 payments then transferring it to me. I'm not getting paid my regular amount and I've checked my statements so I know I'm not paying tax so I've transfered whatever tax I was paying previously so when the tax man comes along, hopefully I will be allowed to pay it altogether rather than my tax credits being affected next year. I've another account that says "Car loan" that weekly I transfer money into and at the end of the month transfer the monthly amount into my current account. Anytime I'm transferring money I write exactly what it's for so it'll save me the bother of having to explain where certain amounts are going. In saying that, most of the payments I'm making will be gone in 6 months and I've planned to have my deposit in 15-18 months so it'll be gone from my account then.

But if there's anyone that is good with this, do you know how that will work? I've been putting away over €130 a week for tax money, do you think that at some point this year I would be able to give it back in full amounts or do you think it'll be a case of paying it back in tax next year? Would that mean my tax will go up again? I'm just concerned as that could affect my payments next year meaning I won't be able to save as much.

Mind you, I would assume the bank would see this as a nickname for you rather than a joke.

callmehal

Thought I'd post on this thread, see if anyone can assist. Just say someone wants to apply for a mortgage later in the year. They were attempting to save like crazy from January and got a second job that paid through paypal. They could only keep that job up for 2 months. So they had regular savings from their main job from January and 2 months payments from the other job paid through paypal. Will this have any effect on the mortgage application? The second job would be counted as self employed and tax will need to be paid in October. Does self employed payments have a negative effect on banks approving mortgages or will any issues be raised?

Febreeze

callmehal wrote: »

Thought I'd post on this thread, see if anyone can assist. Just say someone wants to apply for a mortgage later in the year. They were attempting to save like crazy from January and got a second job that paid through paypal. They could only keep that job up for 2 months. So they had regular savings from their main job from January and 2 months payments from the other job paid through paypal. Will this have any effect on the mortgage application? The second job would be counted as self employed and tax will need to be paid in October. Does self employed payments have a negative effect on banks approving mortgages or will any issues be raised?

From what I read through other thread on boards, it seems like they would want to see a continuous savings through the same employer without any breaks. I also read that some banks decline self employed but again, I could be completly wrong in this. From my research online and on boards, I really looks like they want to see a continuous wage with continuous savings. 6 months of a clear account, no silly buggers and basically show you can live a little too. Also learned from this thread haha.

Personally I would assume a pause in savings and change in jobs and would raise a few questions.

But correct me if I'm wrong.

Also, I didn't know you could get paid through PayPal. That's news to me. You live and learn eh.

EireinOZ

Me and my partner are saving for a house .I am a public servant and my partner is a engineering. We are both just starting our working career . I'm on 26k and he is on 28k per year. Our rent 600 a month and our car loans are 380 a month . we save about 1500-1600 a month. What is the chance of the banks leading us more than 3.5 times of our income ? We would like to get a house for 300000. We should have our 10 percent deposit in Jan 21

c.p.w.g.w

Sawyer Fancy Beaver wrote: »

Don't get a fixer upper. A homebuyers report is not a clean bill of health. Get a house built within the last decade if possible. Avoid buying the most expensive house you can get a loan for, if you can.

Well older houses are probably better than anything built during the boom here

Febreeze

EireinOZ wrote: »

Me and my partner are saving for a house .I am a public servant and my partner is a engineering. We are both just starting our working career . I'm on 26k and he is on 28k per year. Our rent 600 a month and our car loans are 380 a month . we save about 1500-1600 a month. What is the chance of the banks leading us more than 3.5 times of our income ? We would like to get a house for 300000. We should have our 10 percent deposit in Jan 21

Good luck :-)

I hope someone can inform you with this because I honestly haven't a clue.

c.p.w.g.w

EireinOZ wrote: »

Me and my partner are saving for a house .I am a public servant and my partner is a engineering. We are both just starting our working career . I'm on 26k and he is on 28k per year. Our rent 600 a month and our car loans are 380 a month . we save about 1500-1600 a month. What is the chance of the banks leading us more than 3.5 times of our income ? We would like to get a house for 300000. We should have our 10 percent deposit in Jan 21

What part of the country are looking at?

Febreeze

c.p.w.g.w wrote: »

Well older houses are probably better than anything built during the boom here

I've heard this myself. I was told to look for older, oldish houses as they tend to have a better structure to them. "New" houses are supposed to be built quicker therefor not lasting as long but quote me if I'm wrong. My parents said the same thing to me when I informed them of my plans to buy a house. They pretty much said a fixer upper might cost more but last longer. I've no idea how true that is though.

EireinOZ

c.p.w.g.w wrote: »

What part of the country are looking at?

We are looking to buy just outside cork city

c.p.w.g.w

Febreeze wrote: »

I've heard this myself. I was told to look for older, oldish houses as they tend to have a better structure to them. "New" houses are supposed to be built quicker therefor not lasting as long but quote me if I'm wrong. My parents said the same thing to me when I informed them of my plans to buy a house. They pretty much said a fixer upper might cost more but last longer. I've no idea how true that is though.

My mates parents buy a house built during the boom, been in it 7 years...started to notice issues...got an inspection...house is sinking...as are 15 others nearby too...having serious issues trying to get it fixed...

Febreeze

c.p.w.g.w wrote: »

My mates parents buy a house built during the boom, been in it 7 years...started to notice issues...got an inspection...house is sinking...as are 15 others nearby too...having serious issues trying to get it fixed...

Jesus that's awful. I think I would lose my mind if that was to happen to me. Spend all that time saving, happily going through the process then boom 7 years later "Your house is actually sinking". I would lose the will to live.

What are they planning to do? Is there noone they can contact about this?

Sparky85

Sawyer Fancy Beaver wrote: »

Don't get a fixer upper. A homebuyers report is not a clean bill of health. Get a house built within the last decade if possible. Avoid buying the most expensive house you can get a loan for, if you can.

This is bad advice! A “fixer upper” is a genuine way to add value that should always be looked at as a positive regardless what your plans are. Adding value is never a bad thing and to out preform the market a “fixer upper” is the way to go
Get a full survey and go in with your eyes open to what needs to be done

Graham

Sparky85 wrote: »

A “fixer upper” is a genuine way to add value that should always be looked at as a positive regardless what your plans are. Adding value is never a bad thing and to out preform the market a “fixer upper” is the way to go

That's only true if the initial purchase price + renovation costs are less than final market value. That's far from a foregone conclusion.

Febreeze

Graham wrote: »

That's only true if the initial purchase price + renovation costs are less than final market value. That's far from a foregone conclusion.

My thinking too. I would get a fixer upper if the price was right pretty much.

callmehal

Febreeze wrote: »

From what I read through other thread on boards, it seems like they would want to see a continuous savings through the same employer without any breaks. I also read that some banks decline self employed but again, I could be completly wrong in this. From my research online and on boards, I really looks like they want to see a continuous wage with continuous savings. 6 months of a clear account, no silly buggers and basically show you can live a little too. Also learned from this thread haha.

Personally I would assume a pause in savings and change in jobs and would raise a few questions.

But correct me if I'm wrong.

Also, I didn't know you could get paid through PayPal. That's news to me. You live and learn eh.

Sorry, should have clarified. One job has been continuous, a regular paye job and full time. The second job was part time, working weekends and I suppose counted as self employed. Savings were still regular, the same amount was lodged into savings account every month and rent paid as well.

I've heard what you heard, about it being more difficult if self employment is involved. I wonder if anyone can give a difinitive answer on that?

Sparky85

Graham wrote: »

That's only true if the initial purchase price + renovation costs are less than final market value. That's far from a foregone conclusion.

But it’s a generally an easy conclusion to come to with new builds, i.e. value is set with little that can be done to add value.
An older house, say 20/30/40 years old, usually on a bigger plot/bigger garden/own drive etc, brought up to modern spec will out perform similar builds nearby in valuation

Sparky85

callmehal wrote: »

Sorry, should have clarified. One job has been continuous, a regular paye job and full time. The second job was part time, working weekends and I suppose counted as self employed. Savings were still regular, the same amount was lodged into savings account every month and rent paid as well.

I've heard what you heard, about it being more difficult if self employment is involved. I wonder if anyone can give a difinitive answer on that?

For Self employed banks require 3 years accounts to include the income
If you’re not relying on the income for the LTI of the mortgage it’s fine. If you used it to build up your deposit it’s fine.

Febreeze

callmehal wrote: »

Sorry, should have clarified. One job has been continuous, a regular paye job and full time. The second job was part time, working weekends and I suppose counted as self employed. Savings were still regular, the same amount was lodged into savings account every month and rent paid as well.

I've heard what you heard, about it being more difficult if self employment is involved. I wonder if anyone can give a difinitive answer on that?

Oh I'm sure you will be fine :-) sure you could always use your self employment savings as savings for your bits and bobs for your house. I would love to do that. I work full time myself, as does my partner and I think that does it for us haha. Fair play to you.

callmehal

Sparky85 wrote: »

For Self employed banks require 3 years accounts to include the income
If you’re not relying on the income for the LTI of the mortgage it’s fine. If you used it to build up your deposit it’s fine.

Yes, I've read about that but I'm asking if it was just a part time thing, for 2 months as a second job.

Sorry, just added your second line there. So if it's not included in anything other than a deposit payment it should be fine?

Graham

Sparky85 wrote: »

But it’s a generally an easy conclusion to come to with new builds, i.e. value is set with little that can be done to add value.
An older house, say 20/30/40 years old, usually on a bigger plot/bigger garden/own drive etc, brought up to modern spec will out perform similar builds nearby in valuation

That hasn't been the case anywhere in demand in the last few years. Too much competition for fixer uppers.

You might see an unimproved property on the market for 30k less than it's updated equivalent while needing a 70k - 100k spend.

Only enticing for those with a mortgage ceiling or those unable to estimate the costs of works required.

Sparky85

callmehal wrote: »

Yes, I've read about that but I'm asking if it was just a part time thing, for 2 months as a second job.

Used to build up your deposit it’s fine as long as you’re not relying on the income to be counted in the LTI for the mortgage

callmehal

Febreeze wrote: »

Oh I'm sure you will be fine :-) sure you could always use your self employment savings as savings for your bits and bobs for your house. I would love to do that. I work full time myself, as does my partner and I think that does it for us haha. Fair play to you.

Thanks, yes I tried it for 2 months. Was difficult. I really only stopped because I was told that self employed payments make things very difficult.

You seem to picking up a lot of knowledge from this thread! You'll easily get a mortgage with your expetrtise!

callmehal

Sparky85 wrote: »

Used to build up your deposit it’s fine as long as you’re not relying on the income to be counted in the LTI for the mortgage

Ok, great thanks.

Sparky85

Graham wrote: »

That hasn't been the case anywhere in demand in the last few years. Too much competition for fixer uppers.

You might see an unimproved property on the market for 30k less than it's updated equivalent while needing a 70k - 100k spend.

Only enticing for those with a mortgage ceiling or those unable to estimate the costs of works required.

I disagree because I’ve done it myself. 30k invested to bring a 40 year old house up to modern spec and out preformed every similar build house (3 bed semi) in the entire area when selling by a big margin even after taking into account the 30k investment.
FTB want houses they can walk into, unpack a bag and live. They pay a premium for it, so do cash buyers who want decent rentals as an investment

Graham

Sparky85 wrote: »

I disagree because I’ve done it myself.

I'm not saying it's not possible, but telling a first time buyer fixer-uppers are always a fantastic opportunity is poor advice.


Plenty of discussion (and examples) over the last few years where the fixer-upper on offer represented extraordinary poor value.

Febreeze

callmehal wrote: »

Thanks, yes I tried it for 2 months. Was difficult. I really only stopped because I was told that self employed payments make things very difficult.

You seem to picking up a lot of knowledge from this thread! You'll easily get a mortgage with your expetrtise!

I wish! I'll be walking into the bank, sweating and saying stupid things like "X on Boards.ie told me that I'm allowed so why aren't I allowed" or something along those lines haha.