Realistic advice needed for first time buyer

peanuthead

Hi there

How is is possible for someone not to know the basics about buying a first home yo ask? Well, I dont!! So here it goes

Ive been renting for the last few months now. I am able to afford it, but have come to resent paying it receently for a number of reasons. The top two are that

(1) I feel (and always have felt) that it is dead money, money I'm never going to see again, and money I could be using to pay off my own mortgage (if I had one)

(2) The recent drop in house prices/mortgage rates. I live with two friends. One is the house owner(male). My female housemate was doing a bit of snooping one day and found a letter from the bank. I know she shouldn't have opened it, and believe me, when she did I wish she had've kept the news to herself. It turns out that between me and her we are paying this guys mortgage, bar 50euro.

Now I know that he is just doing good business, and credit to him for that, but obviously enough it has made me angry, when I know mortgage rates are low at the moment, but yet, here I am paying someone elses.

It has made me seriously think about getting my own place. This of course seems to me like a great idea, but I also feel like my plan is riddled with holes I dont see.

I am a teacher, but am working part-time. I will be doing my HDip next year, so will probably have to wait until then to put my plan into action. I'm not sure if I would get a mortgage alone, and if not, if I were to buy it along with my father, would I be eligible for a first time buyer's discount, or whatever it is? He has previously bought, I haven't.

I'm hoping that rent won't be a problem. My OH will live with me and help me with the rent. The girl I live with at the moment would happily move in with me too, as would my sister and her boyfriend, so I would have plenty of help with the repayments. I understand that this would mean registering as a landlady, and I'm wondering if anyone knows whether thats as good an idea as I seem to think it is (is it expensive to register etc...)

I'm assuming being a part-time teacher (not paid for summers) means I more than likely won't be approved for a mortgage, definitely not on my own anyway.

This is just an idea that popped into my head last night. I havent spoken to anyone about it just yet, least of all my father. If I'm going to convince him to help me out I want to sound like I've looked into it, so any help or advice from people would be great.

Thank You

Victor

Do you think his mortgage is the only expense your landlord has? Insurance, maintenance, wear and tear ...

peanuthead wrote: »

(1) I feel (and always have felt) that it is dead money, money I'm never going to see again, and money I could be using to pay off my own mortgage (if I had one)

Do not use this as an excuse to buy. The alternative to rent as dead money is bank interest as dead money. If you buy now or soon, you are also likely to be buying something that is losing its value.

There is no first time buyers discount or grant. Depending on the property and your income, there are different rates of stamp duty and also mortgage interest relief.

Banks are unlikely to lend to you until you are full time and permanent unless there is a very good second income and / or a guarantor in place.

You could avail of the Rent-a-Room scheme to supplement your income. This means you can earn up to (but not exceeding) €10,000 tax free per year.

peanuthead

Victor wrote: »

Do you think his mortgage is the only expense your landlord has? Insurance, maintenance, wear and tear ... Do not use this as an excuse to buy. The alternative to rent as dead money is bank interest as dead money. If you buy now or soon, you are also likely to be buying something that is losing its value.

There is no first time buyers discount or grant. Depending on the property and your income, there are different rates of stamp duty and also mortgage interest relief.

Banks are unlikely to lend to you until you are full time and permanent unless there is a very good second income and / or a guarantor in place.

You could avail of the Rent-a-Room scheme to supplement your income. This means you can earn up to (but not exceeding) €10,000 tax free per year.

Good point, no I didn't think of those other expenses. I did factor in solicitors fees etc.. into the cost of the house but I did forget about insurance. Maintenance I didn't forget about, because there is so much of it to be done in the place Im in at the moment!!!! This is what I mean about it being a half-baked idea at the moment, I'm sure there is alot more I haven't considered.

To be honest, the thought of the other costs doesn't change my mind because although as you say, there is dead money in interest fees with your own place, at least its your own. And take my landlord at the moment, for as long as I'm paying his mortgage, I'm paying his interest too.

I know houses are losing their value, but I thought that was only a temporary thing. I don't know alot about the market, and I appreciate very much your advice. Will the house prices go up again? And if they do, will they reach the astronomical prices they once were?

The Rent-A -Room thing: Unfortunately, my friend is not a registered landlord. I didn't know this when moving in, I didn't think of asking even, as it was originally a short agreement, no contract, the details of which I'll choose not to go into incase my landlord has an account here!!!! So I guess I have no leg to stand on where that's considered.