First time buyer am I mad

JohnoVC

Thinking of buying a 2 bed apartment in the next few months but not sure if I'm deluded and I'm missing something obvious

Considering any area in Dublin or commuter towns as long as it's not too far out by car.

Age:26
Salary:37,500
Deposit:Currently 23,000, maybe a few thousand more come mortgage application time.

Hoping to rent 1 of the rooms out to someone of similar age for a few years at the start.

Is this realistic?

MarkAnthony

Don't buy an apartment in commuterville IMHO. Get something central so at least it has rental value.

athtrasna

MarkAnthony wrote: »

Don't buy an apartment in commuterville IMHO. Get something central so at least it has rental value.

Hard to find a central yet decent two bed in that price range. Management fees should also be factored in when looking at apartments.

Was about to suggest my part of D15 with the hospital, IT, shopping centre, industrial parks etc so massive rental demand but a quick look at property prices shows that unless you want a property with issues, it's massively over budget.

MarkAnthony

You can squeak in with a two bed in D8 if you're willing to put up with a area being a bit rough round the edges. I saw a place on Cork Street and a flat in Berry's close sub 175K.

I was shocked at the prices in commuter suburbs these days, looks like my protestations that there is value to be had has gone.

joanie smith

It sounds like you might be a little short on savings as is not the current expected deposit 20percent of mortgage. I agree with the above, please dont buy an apartment in a soulless commuter new build town. You wont be happy in it.

Can i suggest getting a mortgage broker, they will give you great advice. One thing you need to be doing is not dipping into your savings, if not that looks great to a bank - steady savings. I had a broker when i bought in 2011 and even is he was a bit of a sales man, he saved me a lot of hassle, checked out all the mortage options with various banks for me and made sure i had all the paperwork. In many cases mortgages fall through at the last minute as paperwork not in order and something missing. This gives banks an excuse to let it fall through.

Also, consider this. If you buy will your mortage be less than if you were to currently rent on your own? Sometimes paying rent is not money down the drain as in the long run you can save money. This was true for me as I was renting through the boom and in the end bought a house at a great price. It more than made up for it, thought i have it rented out now.

best of luck, your still young, dont panis. Listen to your own gut not others.

joanie smith

ps mortgage broker was free. they get their commision from elsewhere

athtrasna

joanie smith wrote: »

It sounds like you might be a little short on savings as is not the current expected deposit 20percent of mortgage.

Deposit criteria for FTB is 10% for properties under €220k so not short on deposit.

joanie smith

i didnt realise that. I advise getting to know the market and spending time looking around. If you do youll know when youre getting value. Don't be fooled by appereances and old wallpaper, that can all be sorted easily. Structure, size etc is more important. Go for it but deffo get a broker. Like i said consider current rent versus mortgage. Thats a good indicator if the time is right

Sleepy

At your current salary, the max you can borrow under central bank rules is €131,250. Assuming you don't have separate savings for solicitors, surveys, stamp duty etc. you'll need approx €5,000 of your savings to cover those which would leave you with a max of about €150k to spend. It'd be advisable to try and get a few more thousand together to cover the cost of furnishings, any redecoration or maintenance (e.g. gas boiler service) you might need too.

Don't worry about trying to kit the house out with new/designer stuff from the outset, charity shops (or adverts.ie) can be great value for furniture and a €100 kitchen table / couch will serve it's purpose until you can afford the one you really want.

A quick look at Daft shows 95 properties in Dublin City with a minimum of 2 bedrooms in your price range. You're not going to get leafy suburbs on your budget but there seem to be a number of 2 bed terraced houses in areas like Finglas, North Strand, Coolock, Dublin 8 etc. which would, imho, represent better value for money than a 2 bed apartment and, given your age means this is unlikely to be your "forever" home, should hold their value better over time without the hassle of management fees etc. Many of the older 2 beds offer decent opportunities for extensions or attic conversions which you'll never get in an apartment and may make the property more flexible should you find yourself "stuck" with it in a future downturn just as you're starting a family etc.

L1011

joanie smith wrote: »

ps mortgage broker was free. they get their commision from elsewhere

Brokers on commission solely offer less products

SarahMollie

I don't think you're mad, it could probably work out quite well, as I can't imagine the repayments on a mortgage of €131k could be that significant, especially if you factor in getting rent for your spare bedroom, it might almost pay for itself.

You just need to make sure you're happy with doing the following sinking all your savings in an asset thats not very liquid. Secondly, you need to factor in the buying costs and the the ongoing costs of ownership such as management fees, insurance, and it being you who fixes the boiler if it goes bust etc.

JohnoVC

Thanks for the input people, option 2 is looking more and more appealing all the time...


1) Rent somewhere in Dublin with strangers for 500 a month give or take and fritter away my savings.

2) Buy my own place with mortgage repayments of around 500 and rent out the spare room to someone of my choosing for nearly as much going by current rents.

MarkAnthony

I think 500 a month is probably a bit optimistic. I have a similar mortgage to what you're looking at (very roughly) and at 3.9% it's 790 per month. I'd personally not discount a central one bed over commuterville 2 bed and I'd certainly look at the 2 bed house market. I'm delighted with what I got going a bit off the beaten track!

joanie smith

L1011 wrote: »

Brokers on commission solely offer less products

Maybe so but i was happy with what i got and had it tailored for me. I took out a portion fixed and the other variable to allow me hedging and some safety without being completely exposed to variable rate increases. I remember a girl in work was also trying to buy at the same time, her mortgage deal fell through at the last minute as small bit of paperwork missing and the bank used it as an excuse. Maybe the banks are more eager to give out mortgages now, i don't know. Mine was taken out five years ago.

JohnoVC

Has anyone experience of living in a large apartment complex the likes of Melville view in Finglas and could you share your experiences of the type of tenants these would have?


I

anotherlostie

There is some value in apartments in parts of Dublin on the Kildare line, so the stops at Park West and Clondalkin offer some potential and usually a few places up for sale too.

psheaser

In short yes, have you been listening to all those around you "buy now, prices are only going to go up " " get on the ladder " " quick " " market is only going up "

Is it 2006 ?

Save as much as you can, the properties you have your eye on now will be going for 20%-40% less in 2-3 years.

Damiencm

psheaser wrote:

Save as much as you can, the properties you have your eye on now will be going for 20%-40% less in 2-3 years.

I'd love to know how these types of reductions are going to come around in that timeframe given the utter lack of supply at present.

psheaser

psheaser wrote: »

In short yes, have you been listening to all those around you "buy now, prices are only going to go up " " get on the ladder " " quick " " market is only going up "

Is it 2006 ?

Save as much as you can, the properties you have your eye on now will be going for 20%-40% less in 2-3 years.

You are living dreamland, the properties will most likely be 20% or more expansive in 2-3 years not less. Prices are only going one way for the foreseeable future and that's up.