Where to start ?

Ste-

Hey guys



Myself and my Fiancée are looking to get our first house hopefully this year.
We have no clue where to start, how to go about it.

What banks would be the best at the minute, we hold personal accounts in BOI and PTSB, Savings in the Post Office and Rabbo. No outstanding loans. Credit cards are paid off pretty much a few weeks after any purchases. no outstanding debts on them.

Income would be about 26 and 30 grand each.
Houses we've been looking at would be around the 200,000 mark. We have a deposit of 40,000.

Would a broker be better than going to the banks ourselves ?
What happens after if/when we get approved ? We have no idea of what steps to take and looking for a bit of guidance at this stage.

Thanks.

Ste-

username123

I bought by myself in 2004 and hadnt a clue how to go about it either - so here are a few pointers based on my own experience:

I approached my own bank - it was back when they wanted to throw money at you, but nonetheless, they wanted to know which house I wanted to buy - I hadnt a clue, I just wanted to know how much theyd give me before I started looking. So I got them to quote me a ballpark figure. I also got a couple of other banks to do the same (all ballparks were more than I was thinking of anyway).

So thats a start point, get ballpark figures off more than one institution. Didnt see the point of a broker myself, just contacted them directly. Other people may have different views.

Once I had a ballpark I began to look in earnest. Eventually found somewhere I liked, put down a holding deposit - this allows you to 'hold' the property while you go off and see will the bank officially approve the amount needed, and it also allows you a cool off period in case you change your mind. I bought a brand new place, still being built - but the principle is the same. There was a set time limit on the holding deposit (which was 2k if I remember correctly), I think it was 3 weeks or so. The holding deposit was fully refundable - check that before you hand it over! At this point I also chose a solicitor and preliminary documents were sent to my solicitor.

In the 3 weeks I made a mortgage application with my bank, they required a variety of different bits and pieces of paperwork, P60s, payslips, statement of account in other financial institutions etc...
I was clear that I had a holding deposit down so couldnt hang about - I had my answer within a week. At that point I put down a full deposit - this was non refundable, so if I decided to change my mind Id lose it - it was 20k. Solicitors are involved and things are signed at this point - you are now in a legally binding contract (as is the person selling).

After that I waited for it to be finished and I snagged - do not stint on snagging - its small money up front to save money later. Then the bank drew down the mortgage and I got my keys.

There may be differences to the above if you are buying second hand - you may want a structural engineers report rather than a snag list, you may not find it as easy to get a mortgage as I did due to banks being less willing to throw any money about these days, but I think the basics will be roughly the same.

The main things I know now that I wish Id known then are:
Spend good money on a good snagger/engineer. Do not try to save pennies here - not worth it in the long run.

Beware management fees - a year passes quicker than you think and they are a constant source of frustration - I personally wouldnt buy in a managed estate again.

Fully google map/google earth the area and check out your local authority for zoning and plans in the immediate area. There is a halting site a little too close to me for comfort which I already knew about but it was behind a wall - that wall was knocked down and the road opened after I bought. There was another halting site built a mile up the road as part of the neighbouring development. There was also council housing built right round the corner as part of the development. All three have been a source of anti social behaviour and have drawn a lot of negative publicity, lowering the property prices in the area even more.

Drive around at night to see what the area is like. Ask people in the area what the area is like.

Ask the bank to clearly explain the mortgage and interest calculations - I was kinda shocked one day a number of years after Id bought when I discovered I could add the mortgage account to my online banking and I realised how much I was spending in interest!! Not that it was hidden from me, but no one had done an example calculation out - maybe if they had I would have made slightly different choices in terms of amount borrowed, term of loan etc....

Good luck and happy house hunting!

killers1

As a mortgage broker I'll give you my 2 cents worth....

The experience you have dealing with either a bank or a broker will only be as good as the person looking after you. There are people 'advising' on mortgages in bank branches who struggle to spell the word never mind be able to explain the process to you in a clear and understandable way. Likewise there are good and bad brokers out there too. Bank staff won't hold your hand through the process in the same way a good broker will which is very important when you are taking on the biggest financial commitment of your life. In my view a good broker is fully aware of the different banks rates & credit policies, is well versed on the legal side of the process, has a good knowledge of survey reports, how to interpret them and identify areas to be followed up on by your solicitor, has a good knowledge of the property market & can advise you on negotiating with the Estate Agent. A good broker will also have excellent contacts as in competitively priced solicitors, surveyors & valuers. A good broker will have access to the cheapest insurance products on the market. A good broker will have you gather up your information (the only bit of work you need to do!) & then take over in terms of packaging your application in the best possible light, presenting it to the Bank's and arguing your case for approval. They will then deal with every aspect of your loan from Approval in Principle to loan offer & ensure all conditions are complied with in order to allow your mortgage to issue in a timely manner. A good broker will interact with both your lender and your solicitor to ensure that at all times you are fully aware of the process and everything that's going on... If you look at the many threads on here the people who are asking the questions about the process and what do we do next etc etc are the ones dealing directly with the banks and are very much in the dark! Forget this notion that brokers are only after their commission... that's simply not the case. If it was, every loan I arrange would be done via KBC who pay the highest level of commission to brokers. I haven't done a loan with KBC in over 3 years because they haven't had a competitive rate.... Banks will only tell you about their products, they won't tell you about the bank up the road.. They'll also only tell you how much you qualify for with them, they won't tell you that you would have got a higher level of finance somewhere else.. And finally best of all, the best brokers don't charge any fees (as they don't need to). At the end of the day if I had the choice between dealing with a qualified professional who has seen hundreds of people through the process and availing of their services free of charge V dealing with someone in a bank (who may or may not have any previous mortgage experience and probably hasn't been through the process yet themselves!) I know which one I'd opt for.....Best of luck!

Barnseire

killers1 wrote: »

As a mortgage broker I'll give you my 2 cents worth....

And finally best of all, the best brokers don't charge any fees (as they don't need to). .....Best of luck!

Are all the financial institutions still paying commission to brokers ?

killers1

Barnseire wrote: »

Are all the financial institutions still paying commission to brokers ?

With the exception of Ulster Bank, although Brokers do have arrangements where they can refer applications via UB branches without being paid a commission.. AIB, BOI via ICS, EBS via Haven, KBC, PTSB all pay commission to brokers...

Barnseire

I think my broker may be telling me a porkie. He told me he normally charges a fee these days as the institutions are not paying commission.

killers1

Barnseire wrote: »

I think my broker may be telling me a porkie. He told me he normally charges a fee these days as the institutions are not paying commission.

Banks reduced broker commissions a few years ago by 50% and to compensate for the drop in income a lot of brokers started charging clients to make up the difference...My approach is slightly different in so far as instead of charging a fee I ask satisfied clients to refer a friend/colleague to me in the future. I'd certainly suggest raising the issue with your broker...especially if you are applying to anyone other than UB...

Barnseire

Thanks again. You're a mine of information.

killers1

Barnseire wrote: »

Thanks again. You're a mine of information.

Wait till you get my invoice!!! No probs....

Midnight Sundance

I'm just giving my two cents which could be completely different to Others people's opinions.
Id go with a broker..... I went directly to the company itself and it was the biggest regret of my life as they kept changing the person dealing with me, all the forms I sent in got lost even though I was on the phone to person C or D while they opened the envelope and you are just a person at the end of the phone .
In saying that , go with the best rate and the first post answered most of what I would have said too.
Best of luck

engineermike

From the perspective of a home owner & business person
- I would whole heatedly recommend the use of a broker when shopping for a mortgage.
Any long term high cost venture such as a mortgage requires due diligence & impartial advice - with one to one client advice.
The cost is minimal with a broker to either shop for the best rate / terms / or conditions that won't restrict your future lifestyle or plans etc.
Get a good broker and also do your research.

From the perspective of an engineer
- A pre-purchase survey is a must even for new build housing stock, the building control & regulation system in Ireland has failed to protect buyers with notable situations such as Priory hall & belmayne being just the tip of the iceberg. Pyrite and other issues could also be of concern.
Some of the questionable practices employed during the building boom mean that a pre purchase survey is good practice for any age of building
& these days a snag list to detail finishing issues is approx 150 - 200 euro.
M. Fleming