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First Time Buyer/Saving

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  • 28-08-2020 4:54pm
    #1
    Noah G
    Banned (with Prison Access) Posts: 35 ✭


    Hi so myself and parnter both in are late 20s were saving for a mortgage up until a few months ago . My partner has gone back to college and I have gone to to do an electrician apprenticeship will be qualified when I'm 33 We don't want to stuck in jobs we hate to just rush and jump on the property ladder, we have no kids yet either so no rush .

    I was left money a few months ago that has giving me the chance to do an apprenticeship and not worry about the salary .

    Back living at home now for the next 2 or 3 years when we will then build on her family land . We both will be getting a gift from our parents when we do go for a mortgage that will pretty much cover the deposit.

    Will I keep saving what ever I can In my savings account so the bank can see i was saving.
    OR
    just let the money I was left in bank and gift from parents go into savings account closer to the time we go for a mortgage?

    What age where you when you got your first home?

    how much did you have to save and for how long.?


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    #2
    Polkadotpjs
    Registered Users Posts: 15 ✭Polkadotpjs


    Noah G wrote: »
    Hi so myself and parnter both in are late 20s were saving for a mortgage up until a few months ago . My partner has gone back to college and I have gone to to do an electrician apprenticeship will be qualified when I'm 33 We don't want to stuck in jobs we hate to just rush and jump on the property ladder, we have no kids yet either so no rush .

    I was left money a few months ago that has giving me the chance to do an apprenticeship and not worry about the salary .

    Back living at home now for the next 2 or 3 years when we will then build on her family land . We both will be getting a gift from our parents when we do go for a mortgage that will pretty much cover the deposit.

    Will I keep saving what ever I can In my savings account so the bank can see i was saving.
    OR
    just let the money I was left in bank and gift from parents go into savings account closer to the time we go for a mortgage?

    What age where you when you got your first home?

    how much did you have to save and for how long.?


    Keep saving as much as you can as there are extra costs on top of the deposit when buying a property such as solicitor, stamp duty and furniture.

    When applying you should either be able to demonstrate 6 months of regular savings or 6 months of rent payments to match your future mortgage amount and demonstrate repayment capacity.


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    #3
    Noah G
    Banned (with Prison Access) Posts: 35 ✭Noah G


    Polkadotpjs wrote: »
    Keep saving as much as you can as there are extra costs on top of the deposit when buying a property such as solicitor, stamp duty and furniture.

    When applying you should either be able to demonstrate 6 months of regular savings or 6 months of rent payments to match your future mortgage amount and demonstrate repayment capacity.



    Thanks for the reply, yeah true I know there will be extra costs especially as we will be building. 6 months of saving will be no problem.

    What would be a good amount to save each month ?


    My partner was saving about 1k a month,
    I was saving around 1,500 myself before I went to do an apprenticeship. Will be saving around that again once my salary goes up as I will be making more money when I'm qualified then what I was making in my old job .


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    #4
    ChewBerecca
    Registered Users Posts: 301 ✭✭ChewBerecca


    The bank will stress test your income and savings, the more you're putting away the better - savings are never a bad thing to have - but the stress test is if the interest rate was to increase, if your income was interrupted, would you be able to cover the mortgage payment and necessary bills/food. The more you can put away consistently in those 6 months the better but its difficult to say how much is good to put away exactly. If you can knuckle down, try throw as much in as possible without needing to withdraw it. If you've any loans, try clear them as well.

    We went just over a year with no holidays, very few nights out, takeaways instead of dinners out, but it helped us get the majority of our deposit together. We bought our house nearly a year ago when I was 27 and himself 30. It wasn't easy going a year without a holiday or the weekly nights out we were used to, but cutting back for the year got us our house and we're now paying much less in mortgage payments than our friends are on rent.

    AIB (and another bank I think) take rent as well as savings into account so if you end up moving out they will consider your monthly rent in addition to savings in terms of your ability to pay a mortgage, BOI and most other banks only look at savings.


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    #5
    Noah G
    Banned (with Prison Access) Posts: 35 ✭Noah G


    ChewBerecca wrote: »
    The bank will stress test your income and savings, the more you're putting away the better - savings are never a bad thing to have - but the stress test is if the interest rate was to increase, if your income was interrupted, would you be able to cover the mortgage payment and necessary bills/food. The more you can put away consistently in those 6 months the better but its difficult to say how much is good to put away exactly. If you can knuckle down, try throw as much in as possible without needing to withdraw it. If you've any loans, try clear them as well.

    We went just over a year with no holidays, very few nights out, takeaways instead of dinners out, but it helped us get the majority of our deposit together. We bought our house nearly a year ago when I was 27 and himself 30. It wasn't easy going a year without a holiday or the weekly nights out we were used to, but cutting back for the year got us our house and we're now paying much less in mortgage payments than our friends are on rent.

    AIB (and another bank I think) take rent as well as savings into account so if you end up moving out they will consider your monthly rent in addition to savings in terms of your ability to pay a mortgage, BOI and most other banks only look at savings.



    Well done for cutting, has to be done
    How much did you save over the year by doing that?


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    #6
    Noah G
    Banned (with Prison Access) Posts: 35 ✭Noah G


    I know we only need 10% for the deposit which will be covered by our parents as a gift , bank will see I have a steady income and savings but once the 10% is covered we should be fine .

    We are building aswell which will save us a good bit , we won't need a 400k mortgage for a house in dublin will be getting around 250k - 300k should be able to build the house the way we want it going by her family who have built there own homes over the years.


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    #7
    yaboya1
    Registered Users Posts: 4,610 ✭✭✭yaboya1


    ChewBerecca wrote: »
    AIB (and another bank I think) take rent as well as savings into account so if you end up moving out they will consider your monthly rent in addition to savings in terms of your ability to pay a mortgage, BOI and most other banks only look at savings.

    So if you're currently paying €2k per month rent, which obviously you won't be paying if you get your own house, BOI and most other banks don't assume that €2k is available to service the mortgage? Why?

    I really doubt that's true.
    It's up there with the most ridiculous things I've ever heard. If it is true (extremely unlikely), it would mean virtually nobody who's currently renting would get a mortgage approved by BOI and most other banks.


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    #8
    Clazbeag
    Registered Users Posts: 48 ✭Clazbeag


    When I went to the bank they said to make sure any money you are giving your parents every month is labelled as "Rent" on your bank statements. This way it can be counted into their calculations. Any money you give them cash in hand etc is excluded from their calculations- they kept drumming that into me! Best of luck


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    #9
    ChewBerecca
    Registered Users Posts: 301 ✭✭ChewBerecca


    yaboya1 wrote: »
    So if you're currently paying €2k per month rent, which obviously you won't be paying if you get your own house, BOI and most other banks don't assume that €2k is available to service the mortgage? Why?

    I really doubt that's true.
    It's up there with the most ridiculous things I've ever heard. If it is true (extremely unlikely), it would mean virtually nobody who's currently renting would get a mortgage approved by BOI and most other banks.

    It was true last year when we went to BOI for a mortgage. They wanted to see savings. Even if you're paying 2k on rent, if you're not saving they won't like it.


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    #10
    ChewBerecca
    Registered Users Posts: 301 ✭✭ChewBerecca


    Noah G wrote: »
    Well done for cutting, has to be done
    How much did you save over the year by doing that?

    We got about 30k together of our 50k deposit in a year.

    It wasn't easy but it happened.


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    #11
    Noah G
    Banned (with Prison Access) Posts: 35 ✭Noah G


    ChewBerecca wrote: »
    We got about 30k together of our 50k deposit in a year.

    It wasn't easy but it happened.

    Good going , so you needed to have 50k saved for your mortgage seems like a lot for a first time buyer.


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    #12
    ChewBerecca
    Registered Users Posts: 301 ✭✭ChewBerecca


    Noah G wrote: »
    Good going , so you needed to have 50k saved for your mortgage seems like a lot for a first time buyer.

    We had a lot to tick off on the wishlist for our first home - detached, popular area in Limerick, at least 3 bedrooms, bit of a garden - so our deposit was more than 10% of the purchase price because we didn't want a "starter home", we wanted something we could stay in for a good number of years, potentially for good.

    We bought the house for 380k, mortgage 330k. BOI, PTSB and UB only offered us 269k, AIB got us the exception.


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    #13
    Bigmac1euro
    Registered Users Posts: 1,463 ✭✭✭Bigmac1euro


    ChewBerecca wrote: »
    It was true last year when we went to BOI for a mortgage. They wanted to see savings. Even if you're paying 2k on rent, if you're not saving they won't like it.

    They take your rent into account when testing your mortgage capacity. Just bought recently.

    Example

    Every month;
    rent - 1000
    Savings - 1000

    mortgage repayments - 1000

    Mortgage capacity = 100%
    The banks literally told us this.

    PTSB and Ulster Bank.


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    #14
    ChewBerecca
    Registered Users Posts: 301 ✭✭ChewBerecca


    Bigmac1euro wrote: »
    They take your rent into account when testing your mortgage capacity. Just bought recently.

    Example

    Every month;
    rent - 1000
    Savings - 1000

    mortgage repayments - 1000

    Mortgage capacity = 100%
    The banks literally told us this.

    PTSB and Ulster Bank.

    Because you had regular savings in addition to your rent.

    If you're not able to save in addition to your rent, banks such as AIB will look to see regular rent payments instead.

    I'm not trying to pick a fight here, I was merely pointing out some banks will accept evidence of rent instead of savings, and from my experience some banks would only take our savings/growing current account balances into consideration despite what we were paying in rent.


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    #15
    Harper91
    Banned (with Prison Access) Posts: 24 ✭Harper91


    ChewBerecca wrote: »
    We had a lot to tick off on the wishlist for our first home - detached, popular area in Limerick, at least 3 bedrooms, bit of a garden - so our deposit was more than 10% of the purchase price because we didn't want a "starter home", we wanted something we could stay in for a good number of years, potentially for good.


    You could have built a bigger house with more bedrooms for that price or less .

    380k in limerick seems very high for just a 3 bed


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    #16
    yaboya1
    Registered Users Posts: 4,610 ✭✭✭yaboya1


    ChewBerecca wrote: »
    It was true last year when we went to BOI for a mortgage. They wanted to see savings. Even if you're paying 2k on rent, if you're not saving they won't like it.

    Nonsense.
    So if you're paying €2k a month rent and your potential future mortgage is €1k a month, they won't approve you if you haven't also been saving?
    No way that's true.


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