IF YOU’RE THINKING of purchasing your first home in the next year, you’re probably starting to think about what you can do to make that happen. While you might not start the home-buying process in earnest until the new year, there are things you can be considering and deciding now that will make the process more efficient when 2021 rolls around.
Between the pandemic restrictions and the Christmas holiday season, it might not seem like the best time to jump into the home-buying process. But in fact, there’s quite a lot you can do from the comfort of your own home to kick-start this journey. Here are some expert tips.
1. Start building your vision for your future home
You probably have something in mind when you imagine the home you want to buy. Now’s the time to start adding some detail.
Whether you’re a single person hoping to get into the property market or a couple ready to purchase a home where you’ll one day start a family, considering how much space you want is critical. Property buyers agent Breffnie O’Kelly, who works with buyers to find the right home for them, suggests starting by finding out how much space you’re currently living in. “Start to get a feel for what is 60 square metres, what is 80 square metres.” She cautions that buyers are often sceptical about the size of a space listed online, only to realise they live in that amount of space — or less — comfortably already.
Before starting your search in earnest, you should also consider how much elbow grease you’ll reasonably be able to do on your first home. “Many people think they’d be willing to do ‘a bit of work’ on a home, but in reality, you need to have a clear understanding of how much work you can actually bear,” O’Kelly explained. Many second-hand homes will require significant work, like redoing bathrooms or updating kitchens.
Now is the time too to begin considering what kind of floor plan will suit your style. This is critical in understanding whether you’ll be able to live in the space in the way you want, Breffni explains. “The key thing is if the floor plan is right. If the bathroom is in the right place, if the kitchen is the right shape and place.” If you prefer an open-plan layout, or know you want to avoid a home with a tiny larder kitchen, this is the time to decide.
2. Narrow down the locations you’re looking in
Finding the right geographical location is one of the crucial pieces of your home-buying process. While many people search for a home and then consider the location, O’Kelly suggested that with current restrictions in place, potential home-buyers are in a better position to find a place they love first – perhaps even picking a road within a neighbourhood.
“Location is 70% of the value of your property, so once you’ve narrowed down the rough location, it’s time to find your road,” she says, “If you have a chance, go for walks around the neighborhood, and look for an area with a calm, pleasant flow of traffic, rather than a tight cul de sac or a dead end.”
3. Begin asking around for professional recommendations
O’Kelly suggests that the beginning of your home-buying process is a good time to start asking friends and family for recommendations for solicitors, quantity surveyors and builders (if necessary) they have used and loved working with. Having recommendations at the ready for these jobs can make the process faster and more smoothly once you find the right house.
4. Try to have your monthly budget in order
Of course, financial considerations are another key element in your home-buying journey. Gavin Keenan, director of Keenan Financial Planning offered first-time home buyers several simple steps that will put you in the best position to buy a home in 2021.
One thing you can do now is to make sure your rent is paid via direct deposit, Keenan suggests. Banks try to determine an applicant’s ability to repay a loan, and paying rent on time each month is a good step in this direction as it means you’d likely be able to pay your mortgage payment each month as well. If you pay rent via direct deposit each month, rather than in cash, it means there is a record bank staff can easily see.
Regular savings for a period of at least six months is another area banks will be looking for in order to offer mortgage approval. “I always recommend that whatever money you’re able to save, it’s transferred into a dedicated savings account and marked ‘savings’ so that the mortgage manager can easily see that you’re saving each month,” said Keenan. While savings can be tricky if your rent is high, banks will take this into account when they consider what you can repay.
5. Hold off on new loans (and any risky spending too)
If you’ve had your eye on a fancy new car, Keenan said you might want to wait until you’ve secured mortgage approval before signing on for a new car loan. “Banks have to deduct that loan payment from your capacity to pay. They like people to come to them with no baggage. The less baggage you bring, the easier it is to come into a relationship.” His bottom line advice? “Hold off on the fancy car – if a new home is a goal, be committed to that first.”
Finally, Keenan explained that risky spending like regular online betting in sums of more than €20 per week can cause red flags with banks. “Look, people have been bored, they might have been doing a little online poker or betting. That’s going to come up on a bank statement. If it’s a modest amount, that should be fine.” If not, it may raise red flags with the bank you’re trying to impress – so now is the time to make a change.
6. Start thinking about your mortgage options
You don’t need to put in the full application now, but Keenan suggests looking around to different banks to find the best deal – or go further and secure approval if you want to get ahead. “If you’re finding it confusing, you can engage a financial advisor. If a client comes to me, I can check the rates across the board and see what banks suit them best and put in multiple applications. I always suggest putting in a fall-back application, just in case.”
These six steps might seem a little intimidating, but they can be broken down into two action items: research and save. Then you can make the best use of the current restrictions by sitting in front of a cosy fire on dark evenings and making your plans for 2021.
At Glenveagh Homes, our vision is that everyone should have the opportunity to access great-value, high-quality homes in flourishing communities across Ireland. We understand that buying a home is possibly the biggest decision you will ever make in your life – but we want to make it your easiest. Click here to find out more about Glenveagh developments.
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