ARE YOU LOOKING to take the exciting step of putting down roots but simply have no idea where to start?
If you’re thinking of buying a place to call home that is yours and yours alone, you may feel overwhelmed by the work ahead of you. It’s a different process to almost any other purchase you make, so it’s normal to be a little apprehensive. Think of it like a fear of the unknown (that can be easily explained).
Buying your first home is not something we get taught about in school unfortunately. Sure, we may know a little bit of what’s involved in buying a property, but the ins and outs aren’t exactly common knowledge for first time buyers.
Together with Glenveagh, one of Ireland’s leading homebuilders, we’re here to help you on your home owning journey. We have teamed up to create a helpful guide that will banish any doubts and get you on the right track towards owning your home.
In five simple steps, you can see everything you’ll need, who you’ll need to talk to, as well as some helpful supports to make things a little bit easier. With the help of our guide, you’ll be adding your brand new house keys to your keyring in no time!
The first step towards buying your home starts with calculating your budget. You can borrow up to four times your income for your mortgage. If there’s two incomes in the family, you can borrow four times the combined income.
As a First Time Buyer you only need to put down 10% of the properties purchase price upfront. That being said, it still makes sense to maximise your deposit if you can because it means you’ll save more money down the road.
There are also some financial supports available specifically for first time buyers to take into account. Put in place by the Government, the schemes can help you massively as you enter the property market. Overall, you can avail of up to 30% of the value of a property when both schemes are combined, with a few stipulations to be mindful of.
The Help to Buy scheme is a Government tax refund scheme that allows first time buyers to claim 10%, or €30,000, of their property value to help them pay deposits on newly built homes. You can read more on the Help to Buy scheme here so you’re fully informed of your options!
One of the biggest challenges facing first time buyers is saving a deposit, which can be over €30,000, in order to buy a home. This is why the Help to Buy scheme is such a useful tool, supplying first time buyers with €30,000 in order to help them buy the home they need for their family.
For example, if you’re a first time buyer looking to buy a house for €350,000 and you have a combined income of €70,000, the maximum mortgage you can get under Central Bank lending rules is €280,000 (four times your income).
You have €5,000 in savings for a deposit, but you need a deposit of 10% for a mortgage. With Help to Buy, you can receive €30,000 in order bring your deposit up to the required €35,000.
However, this leaves you with €315,000, still €35,000 short of what you need for your dream home. But this is where you can make use of another scheme called the First Home Scheme which will give you the €35,000 required to bridge the gap!
The First Home Scheme (FHS) is where the State and participating banks pay up to 30% of the market value of your new home in return for a stake in the home. This is reduced to 20% if you are also getting the Help to Buy Scheme.
It aims to bridge the gap for first-time buyers and eligible homebuyers between their deposit and mortgage. The minimum you can get is 2.5% of the property purchase price, or €10,000, whichever is higher.
Let’s look at another example. If you’re earning €50,000 a year and you want to buy a home that’s €250,000. You have the minimum deposit of €25,000, which is 10%.
Again, under the Central Bank’s mortgage lending rules you can only borrow up to four times your income, or in this case €200,000.
This leaves you €25,000 short of what you need to buy your home, but under the First Home scheme the Government will give you €25,000 (which is 10% of the property value) in order to bridge the gap. You can read more about the First Home Scheme here.
The schemes are designed to help first time buyers who can’t get a mortgage to suit their needs. Therefore, both schemes require you to have mortgage approval for at least 70% of the property’s value to qualify.
It is very important to note that both of these schemes are only available for use on newly-built homes.
How much you save for the deposit can dictate what properties are available to you. Be careful of withdrawing from your designated savings account – when looking to secure a mortgage, banks do not approve of money coming out of your account.
With everything in place, you are set to apply for your mortgage. To give yourself the best chance of approval, ensure you have a clean credit history - here’s where you can check your credit history.
Heading into the bank, it’s likely you’ll have your printer on overdrive creating all of the documents needed. These include bank statements, your P60, recent payslips, proof of employment and proof of other financial commitments.
You need to prove to the lender that you can afford to pay back your mortgage payment each month. Lenders verify this by asking you to save a certain amount each month and they will only consider your previous 6 months savings. Missing a month may mean you have to start from scratch. Lenders will also consider rental payments and if you cancel or clear a loan repayment as proof of repayment ability too.
Following approval, you now have everything you need to get started – now is the time to start looking for your dream home.
Next up on the to do list is to start viewing properties within your budget and begin to picture yourself in your new home. Glenveagh’s site advertises its properties currently on offer and those coming in the future, and with a wide range of properties available, you’ll be sure to find somewhere you like. They also hold launch events where you can take a virtual tour of one of their upcoming communities so you know what you’re purchasing.
Virtual viewings are incredibly handy, saving you both time and effort as you can view a property from the comfort of your own home. Check out this virtual tour from Glenveagh’s Grey Abbey View to see what they’re all about.
When you organise a viewing, we recommend spending some time in the area if you’re not already familiar with it. Check out the amenities on offer, green spaces, noise, and traffic to give you a good picture of your prospective future surroundings.
When viewing the property itself, there’s a few important things to keep in mind. First, check the orientation of the house. If you’re determined to spend the summer months outside, rain or shine, make sure your garden faces south to make the most of the sun.
If you’re not looking at a new build then considering upgrades or renovations you may want to make to the property, so checking the potential for an attic upgrade, for example, is extremely worthwhile. The potential to retrofit the house, as well as its current BER, are also important considerations.
A viewing is the time to find out everything you want to know about the property, so take advantage of it! Be prepared with some standard questions applicable to every viewing, such as finding out about local transport links or the year the house was built, if applicable. These questions give you a more comprehensive understanding of the property and help make your decision easier.
Now that you’ve found your dream home, the finish line is in sight (albeit there are a few hurdles between you and the line). The great thing about buying a new build is transparency about the purchase price. You know exactly how much a new build is going to cost and there’s no possibility of getting caught in a bidding war.
However, if you’re not buying a new build, there is the potential that there could be rival bids which may increase the price of the home for sale.
To put in an offer, contact the agent by phone or email to ask if there are any current offers on the property. Find out the current bids before letting them know what you’re willing to pay.
Don’t sit on a property humming and hawing, waiting for the ‘perfect’ time to send through a bid. If you love the property, send in an offer! Sales can move very, very quickly, so once your mind is made up, don’t hesitate.
If the process turns into a bidding war, make sure to keep your head amongst the excitement. Have a clear idea of what your limit is and do your best to stick to it. Ruling a property out that you feel is asking for more than you’re willing to pay is fine – albeit slightly disappointing.
To help you in the offer process, we recommend sorting a solicitor out at this point in the journey. Legal advice is a prerequisite when purchasing property, but you don’t officially need one until you’ve had an offer accepted. However, to make sure things can move fast when they need to, it’s best to get in touch with a solicitor early.
Once your offer is accepted, you move onto the stage of ‘Sale Agreed’. There is a fairly robust process to follow now to help you get into your property as soon as possible.
Now that everything is signed, it’s time to move in. We recommend that you change the locks if buying a previously owned home, as there could be multiple copies of the keys made.
Move all your bits and bobs in, but have one eye on potential changes you might want to make first. If you want to paint the sitting room, for example, it’ll be a lot easier to do without all your furniture already in it.
For utilities, sort your internet connection before you officially move in, as there can often be delays when installing. Make sure to close the utility accounts from your previous account, and create new contracts linked to your new address.
Lastly, you’ll want to make sure that you’re getting the right post. Update all of your addresses for bills or other subscriptions you might have.
Follow these steps to ensure a smooth, hassle-free property buying journey. There may be bumps along the way, but the end result will speak for yourself. Enjoy the comfort of your new home with the knowledge that you did everything right.
Glenveagh can help make buying a property easier than ever before. Check out their website for available properties and more information on the helping hand that they offer.
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