Do's and don'ts for first time buyers

Ek2020

frw5 wrote: »

If I was saving some extra money on the side in cash, what is the best way to deposit that to the account and have it counted towards deposit?

Had the same issue when we were in the application process. We were saving cash weekly over the course of a year for a good holiday, and ended up putting big lump deposits into my account which we used for paying off the holiday gradually. The bank queried the cash lodgements and I just told them that's what it was for. There was no issue. I did have the corresponding transactions to the travel agents on my account too though. With holidays and travel being cancelled now, i dint think they'd have any issue if you said it was savings earmarked for a holiday or a new car which isnt going ahead now.

c.p.w.g.w

yourdeadwright wrote: »

Could you just say your been extra careful with your money and saving more coming up to applying , How is that worse than lodging a few grand and saying its money you took up out and kept,

If it really is money he took out ( no reason to not believe him ) he can just point to the cash withdrawals on his statement , If its not money he took out they will look for the cash withdrawals on his statement for him to prove it is ,

Could always say its gift from mam and dad

They don't like to see sudden changes with significant reductions...Maybe reduce the shopping bill by 20% on the card and use the cash for the rest...

Buddy works for a bank analogizing accounts for folks in arrears, he said even small changes can raise red flags...He said the same for people applying for loans, a sudden decrease is worse its more believable if its small sustained decrease along with it being explained...

frw5

I could use the cash saved to pay the rent in cash over the bank counter right, instead of transferring from my account, they wouldn't enquire how come Im not paying rent anymore for few months directly from my acc, shouldn't be a negative? And just put the difference saved to savings acc as extra. That should work

yourdeadwright

frw5 wrote: »

I could use the cash saved to pay the rent in cash over the bank counter right, instead of transferring from my account, they wouldn't enquire how come Im not paying rent anymore for few months directly from my acc, shouldn't be a negative? And just put the difference saved to savings acc as extra. That should work

Don't forget when you actually buy a new house you will need money to furnish it and make adjustments and what not , You can always use your saved cash for that ,

Febreeze

yourdeadwright wrote: »

Don't forget when you actually buy a new house you will need money to furnish it and make adjustments and what not , You can always use your saved cash for that ,

I was just about to reply to that comment with the exact same response. Why not use the extra money as a means to save for new bits and bobs rather than loading it all in one savings and having to worry about questioning. It would save you the stress of the bank potentially declining you and ALSO saves the stress of saving again to buy new stuff. It's a win win if you ask me.

SozBbz

Febreeze wrote: »

I was just about to reply to that comment with the exact same response. Why not use the extra money as a means to save for new bits and bobs rather than loading it all in one savings and having to worry about questioning. It would save you the stress of the bank potentially declining you and ALSO saves the stress of saving again to buy new stuff. It's a win win if you ask me.

Presumably becuase he wants to include the money as part of showing the bank that he has enough for the deposit/legal fees/taxes etc....

Febreeze

SozBbz wrote: »

Presumably becuase he wants to include the money as part of showing the bank that he has enough for the deposit/legal fees/taxes etc....

He's doing that by saving anyways isn't he? The poster is showing that he's saving a set amount each month and if it's continuously for a couple of months, or years, however long then I'm sure he would have more than enough. If its for extras like legal fees and taxes then yeah go ahead and save it for that.

I've started to save a set amount for both deposit and other fees and any extras I have, I've set up a post office account and save into that so the banks can see I have saved in two accounts, still pay my rent which probably proves enough but sure might as well lick arses a small bit and still be able to buy some new things and I pay off my loan. If it wasn't for this thread opening my eyes about saving for extras and appliances, I would of stupidly walked into the bank thinking I knew it all.

I'm loving the questions other posters are asking. Helping me loads to know what else there is to know about this process. You are all great. Thank you :-)

SozBbz

Febreeze wrote: »

He's doing that by saving anyways isn't he? The poster is showing that he's saving a set amount each month and if it's continuously for a couple of months, or years, however long then I'm sure he would have more than enough. If its for extras like legal fees and taxes then yeah go ahead and save it for that.

The bank won't count money held as cash unless you physically bring it in to show them, which would be weird.

Some people still seem to like keeping cash under the mattress for their own reasons, but obviously this isnt great when you're asked for proof of funds.

Febreeze

SozBbz wrote: »

The bank won't count money held as cash unless you physically bring it in to show them, which would be weird.

Some people still seem to like keeping cash under the mattress for their own reasons, but obviously this isnt great when you're asked for proof of funds.

Imagine walking in with a banged up suitcase full of cash. "Hiya I would like a mortage please, paid in cash preferably ;-)" If only it was that easy!

That's exactly why I refuse to take out any extra money I have in my account and save it in a jar. Although sounds like a nice idea but I find if I show what I can save and also show I can save extra and life, I would try and avoid as many questions as I can and get it all done stress free but I guess it isn't always that easy I'm afraid.

It's all fun and games until you get into your house and look back and think about what you had to to through.

Cuddlesworth

c.p.w.g.w wrote: »

Buddy works for a bank analogizing accounts for folks in arrears, he said even small changes can raise red flags...He said the same for people applying for loans, a sudden decrease is worse its more believable if its small sustained decrease along with it being explained...

Which reminds me of the thread title.

Don't have your bank accounts with the same bank you intend to have your mortgage with. Move after getting the mortgage if needed.

Febreeze

Cuddlesworth wrote: »

Which reminds me of the thread title.

Don't have your bank accounts with the same bank you intend to have your mortgage with. Move after getting the mortgage if needed.

Really? Why is that? I would of assumed if you were already with a bank, would that not show loyalty?

frw5

SozBbz wrote: »

Presumably becuase he wants to include the money as part of showing the bank that he has enough for the deposit/legal fees/taxes etc....

Precisely that. Plus the money to decorate and what not can be acquired by saving after the mortgage is approved because it takes months anyways to actually be able to move in.

It would be ludicrous to pay rent and extend even applying and be ready for an approval with deposit because I want money saved for furniture first.

So yeah decided to stop paying rent from my account and use cash on the side to do that. If they ask where did the rent go will say I live under the bridge which is always an option with renting anyways therefor the urgency.

frw5

frw5 wrote: »

If I was saving some extra money on the side in cash, what is the best way to deposit that to the account and have it counted towards deposit?

I sold some stuff to put towards our deposit ,1k,2k ,3k here and there over a year in cash lodged into the credit union (along with the normal savings).
It came up and I just said I sold some collectables and nothing more was said.
I'd say they are looking for loans from other places.

Febreeze

frw5 wrote: »

Precisely that. Plus the money to decorate and what not can be acquired by saving after the mortgage is approved because it takes months anyways to actually be able to move in.

It would be ludicrous to pay rent and extend even applying and be ready for an approval with deposit because I want money saved for furniture first.

So yeah decided to stop paying rent from my account and use cash on the side to do that. If they ask where did the rent go will say I live under the bridge which is always an option with renting anyways therefor the urgency.

What if they ask which bridge? Haha. Sorry I had too....

frw5

And for the deposit, does it have to include the money to pay the lawyer fees, stamp duty etc?
Was thinking having 5% spot on + we have 5% from htb and to apply.
And then cover the lawyer fees at least in first month with my credit card.
Or is it the case it has to be the depost + couple of thousands extra?

Jen Pigs Fly

frw5 wrote: »

And for the deposit, does it have to include the money to pay the lawyer fees, stamp duty etc?
Was thinking having 5% spot on + we have 5% from htb and to apply.
And then cover the lawyer fees at least in first month with my credit card.
Or is it the case it has to be the depost + couple of thousands extra?

I wouldn’t bank on the HTB until you have your approval and know what will be given. If you’ve only paid €10k tax in the last 4 years but qualify for €20k you only get the €10k. So then you need to find the rest of the deposit. We did out HTB months before we went drawdown.

HTB is only for new builds and self builds too.

From my experience banks like to see extra, the want to know that you can afford all the hidden costs.

Our fees after deposit paid was approx:
€6000 solicitor/ stamp duty
€300 snagger
€400 house insurance (you need this before they let you drawdown)
€300 independent broker fees, most brokers take their fee from the banks, we went for a broker/financial advisor, better investment!
Resnag is extra if needed
€380 property maintenance

So we had to show an extra approx €10k before drawdown, banks don’t want to see anything that will make them worry. Not having anything left over to even pay for house insurance or solicitor will make them worry!

Markitron

Jen Pigs Fly wrote: »

I wouldn’t bank on the HTB until you have your approval and know what will be given. If you’ve only paid €10k tax in the last 4 years but qualify for €20k you only get the €10k. So then you need to find the rest of the deposit. We did out HTB months before we went drawdown.

HTB is only for new builds and self builds too.

From my experience banks like to see extra, the want to know that you can afford all the hidden costs.

Our fees after deposit paid was approx:
€6000 solicitor/ stamp duty
€300 snagger
€400 house insurance (you need this before they let you drawdown)
€300 independent broker fees, most brokers take their fee from the banks, we went for a broker/financial advisor, better investment!
Resnag is extra if needed
€380 property maintenance

So we had to show an extra approx €10k before drawdown, banks don’t want to see anything that will make them worry. Not having anything left over to even pay for house insurance or solicitor will make them worry!

Just to jump in on this, can you get AIP with a 5% deposit, assuming you have a full HTB application approved.

Febreeze

BrownFinger wrote: »

I sold some stuff to put towards our deposit ,1k,2k ,3k here and there over a year in cash lodged into the credit union (along with the normal savings).
It came up and I just said I sold some collectables and nothing more was said.
I'd say they are looking for loans from other places.

That's exactly what we are doing as well. We've found a couple of bits in the house that could do with shifting, not a lot but it helps toward putting that extra cash in. Plus it means a lot less to try and bring to a new place haha!

frw5

Jen Pigs Fly wrote: »

I wouldn’t bank on the HTB until you have your approval and know what will be given. If you’ve only paid €10k tax in the last 4 years but qualify for €20k you only get the €10k. So then you need to find the rest of the deposit. We did out HTB months before we went drawdown.

HTB is only for new builds and self builds too.

Yeah we did HTB too already, got the code and the amount. Got the max there but don't plan to use the max.

How do you mean before we have the approval?
I was under the impression HTB code is to be submitted together with the papers for the approval/application?

Febreeze

Can I ask, what is a Stress Test? I've seen a couple of posters say this and I would like to know what it means in layman's terms but I feel like this saving alone is already a stress haha!

GreeBo

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.

Buying a fixer upper also allows you to get the location you want without having to spend the ceiling price. Even if it costs more, you can start living where you want *now*, rather than waiting and hoping that your savings can outpace the market in that area.

Obv there are different levels of "fixer-upper". From livable to unlivable.

laserlad2010

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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

Very difficult to say. Depends on your deposit. If you can get up towards 20% deposit and one of you is a public servant then possibly.

However, your combined income is 51k, exemptions only exist up to 4.5 (and those are extremely rare) times salary which would only bring you to 229k.

You'll realistically need a deposit of around 80k to get a house for 300k unfortunately.

Repayment capacity for you guys doesnt seem to be an issue so you would pass stress tests, but its pure maths for the exemption and you don't seem to meet it.

Have ye any possibility of salary increases? Bonuses?

frw5

laserlad2010 wrote: »

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Very difficult to say. Depends on your deposit. If you can get up towards 20% deposit and one of you is a public servant then possibly.

However, your combined income is 51k, exemptions only exist up to 4.5 (and those are extremely rare) times salary which would only bring you to 229k.

You'll realistically need a deposit of around 80k to get a house for 300k unfortunately.

Repayment capacity for you guys doesnt seem to be an issue so you would pass stress tests, but its pure maths for the exemption and you don't seem to meet it.

Have ye any possibility of salary increases? Bonuses?

When I read something like this the first idea that pops into my head is I should leave the country and never come back.

Markitron

Febreeze wrote: »

Can I ask, what is a Stress Test? I've seen a couple of posters say this and I would like to know what it means in layman's terms but I feel like this saving alone is already a stress haha!

I am no expert, but it is essentially the banks way of figuring out if you can afford your mortgage. Basically you will need to have x amount of money left over each month after all of your fixed costs incl your mortgage (which is calculated at the max interest amount). Ideally you should be saving at least this amount each month.

Anyone in the know, feel free to correct me here.

theteal

Markitron wrote: »

I am no expert, but it is essentially the banks way of figuring out if you can afford your mortgage. Basically you will need to have x amount of money left over each month after all of your fixed costs incl your mortgage (which is calculated at the max interest amount). Ideally you should be saving at least this amount each month.

Anyone in the know, feel free to correct me here.

Yup, more or less. Like if you've got kids they apportion a monthly expenditure amount and will say your affordability is X minus this amount etc.

I've only got experience of the UK which is similar nowhere near as strict as Ireland.

frw5

Markitron wrote: »

I am no expert, but it is essentially the banks way of figuring out if you can afford your mortgage. Basically you will need to have x amount of money left over each month after all of your fixed costs incl your mortgage (which is calculated at the max interest amount). Ideally you should be saving at least this amount each month.

Anyone in the know, feel free to correct me here.

Stress test is actually on that particular amount, so will you have it even with a small stress test. Its a small amount extra though.

Jen Pigs Fly

Markitron wrote: »

Just to jump in on this, can you get AIP with a 5% deposit, assuming you have a full HTB application approved.

We had our 10% deposit saved already before HTB So unfortunately cannot confirms this, I would be if the impression if you did have your approval and such it’ll be taken into account as when we applied they asked for our HTB stuff before looking at proof of funds.

Jen Pigs Fly

frw5 wrote: »

Yeah we did HTB too already, got the code and the amount. Got the max there but don't plan to use the max.

How do you mean before we have the approval?
I was under the impression HTB code is to be submitted together with the papers for the approval/application?

I meant HTB approval, if you owe anything to revenue, they ask for it back, any outstanding claims etc. But you’re approved so it’s all good!

Markitron

Jen Pigs Fly wrote: »

We had our 10% deposit saved already before HTB So unfortunately cannot confirms this, I would be if the impression if you did have your approval and such it’ll be taken into account as when we applied they asked for our HTB stuff before looking at proof of funds.

I assume it would be fine, otherwise it would defeat the whole purpose of the HTB scheme

Jen Pigs Fly

Febreeze wrote: »

Can I ask, what is a Stress Test? I've seen a couple of posters say this and I would like to know what it means in layman's terms but I feel like this saving alone is already a stress haha!

I think it’s a percentage set to allow for inflation.

For example, our mortgage was approx €1000, we needed to save minimum of €1400 to satisfy the stress test.

I just left our broker to it, he told us our minimum to save and we just made sure to save over that monthly.