Moving out of parents house - Options

DopeTech

Hi, I'm 26 and its got to the stage where I really want to move out of my parents place and start living my own life.I have a reasonably paid permanent job (24k net) and I figure by next summer I should have €25,000 put away in the bank.

I have looked at renting but to get a place by myself would be just too expensive and I would never be able to save as all my wages would go on rent.

Would the banks give me a mortgage on an apartment worth say €120,000? The general rule is 3.5 times your gross income so that would be 3.5x28=98k. Then I could put the rest to it myself.

I guess what I'm really wondering is will the bank give a guy a mortgage of that amount if he has never lived outside of home even if he has an excellent savings history?

SB_Part2

I can't see why they wouldn't. As long as you have an excellent savings history there shouldn't be a problem.

Do you have any bills in your name?

zl1whqvjs75cdy

24 k net or gross op?

Alkers

You should get a few friends and rent a house or apartment together, it's the only affordable way atm

notharrypotter

donkeyoaty0099 wrote: »

24 k net or gross op?

NET per post 1.

Evil-p

Pretty sure there's a min figure in most banks for a solo buyer and I have 32k in my head for some reason.

No harm talking to the bank either way

DopeTech

SB_Part2 wrote: »

I can't see why they wouldn't. As long as you have an excellent savings history there shouldn't be a problem.

Do you have any bills in your name?

Only a phone bill. I pay rent of €100 a week and put around 200 in a savings account each week.

Have had credit union loans in the past and never missed a payment.

Simona1986 wrote: »

You should get a few friends and rent a house or apartment together, it's the only affordable way atm

I really don't have anyone I could/would move in with it.

Evil-p wrote: »

Pretty sure there's a min figure in most banks for a solo buyer and I have 32k in my head for some reason.

No harm talking to the bank either way

Well I guess another 6 months or so won't kill me if it is 32k is the figure. I will contact my bank and enquire. Thanks.

athtrasna

You will also need to have separate funds for legal fees, insurance etc so you'll need even more I'm afraid.

DopeTech

athtrasna wrote: »

You will also need to have separate funds for legal fees, insurance etc so you'll need even more I'm afraid.

How much should I factor in roughly?

Evil-p

Sorry if I wasn't clear - I meant earning 32k per annum rather than savings.

brightspark

What you need to think about isn't how much you can borrow but how much you have to pay each month.

You are of course aware that one of the joys of home ownership as opposed to living at home are some other expenses. (Not counting the expenses incurred in purchasing)

House insurance (mandatory if you have a mortgage)
Life Insurance (mandatory for the mortgage too)
Electricity Bills
Heating Bills
Refuse Charges
TV license
Home repairs, grass cutting, painting........

Possibly water charges?
Property Tax (not sure if there are exemptions?)

You should get an idea of the total annual costs to make sure you can afford them as well as the mortgage itself.

Diane Selwyn

I lived in share houses all through my 20s and have some great times and made some great friends that way - BUT it wasn't all roses and I guess maybe times have changed…anyway the only constructive advice I have is to pay your rent by a monthly electronic transfer so they (in the bank) can see your record of payments.

DopeTech

brightspark wrote: »

What you need to think about isn't how much you can borrow but how much you have to pay each month.

You are of course aware that one of the joys of home ownership as opposed to living at home are some other expenses. (Not counting the expenses incurred in purchasing)

House insurance (mandatory if you have a mortgage)
Life Insurance (mandatory for the mortgage too)
Electricity Bills
Heating Bills
Refuse Charges
TV license
Home repairs, grass cutting, painting........

Possibly water charges?
Property Tax (not sure if there are exemptions?)

You should get an idea of the total annual costs to make sure you can afford them as well as the mortgage itself.

I should be ok on a net monthly wage of just over €1800.

DopeTech

Diane Selwyn wrote: »

I lived in share houses all through my 20s and have some great times and made some great friends that way - BUT it wasn't all roses and I guess maybe times have changed…anyway the only constructive advice I have is to pay your rent by a monthly electronic transfer so they (in the bank) can see your record of payments.

I do do that at the moment, I have it set up as a standing order.

Freddiestar

TV license

Humour Me

Where are you living OP? The central bank rules limit your mortgage to 3.5 times salary. If you are looking to buy in dublin, the max mortgage won't go far on your salary.

What's the long term plan? How long do you intend to live in the place you buy?

Mrs OBumble

Are you also paying a share of the electricity / sky / food bills at the moment, or is that 100 all up? If the latter, then I suspect you might be in for a rude shock about the real cost of living.

As well as the costs outlined above, you also need to budget for :

Food
Petrol and/or bus fares
Car and or bike maintenance - and replacement
Health insurance (optional for sure - but many people believe it's essential)
Clothing and footware (you would be surprised what this can add up to, esp if female)
Haircuts / personal care / gym membership (if you do these)
Hobbies / club-memberships (whatever you do)
Socailising (living on your own will get very isolated unless you make sure you go out and do stuff)
Relationships: birthday and Christmas presents, dating costs, funeral cards etc
Holidays

Do you have your own contents insurance for the stuff which you own at the moment? You should, because as an adult it's likely not covered under your parents policy.



I would seriously recommend living in a house-share for a while (maybe only 6 months or so) - just to get some exposure to other ways of living, and the range of things which householders have to think about.

elperello

You can rent out a couple of rooms in your house and receive up to €12,000 rent annually tax free.

TOEJOE

I have two daughters and they earn similar wage as you do .They haven't got a bean between them but they do live an active social life and one of them drives a car ,they will never be able to move away from Mam and dad and as for house purchase they will have to wait till we kick the bucket.

brightspark

FrostyJim wrote: »

I should be ok on a net monthly wage of just over €1800.

Back of an envelope calculations suggest €550 for the mortgage you suggested, and at least €250 for the expenses I suggested.

On that basis you should currently be saving about €800 per month. (Less any payments you currently make at home) leaving you with about €230 a week to pay for all the things mentioned by Mrs OBumble.

DopeTech

brightspark wrote: »

Back of an envelope calculations suggest €550 for the mortgage you suggested, and at least €250 for the expenses I suggested.

On that basis you should currently be saving about €800 per month. (Less any payments you currently make at home) leaving you with about €230 a week to pay for all the things mentioned by Mrs OBumble.

€230 sounds like enough though doesn't it?

brightspark

FrostyJim wrote: »

€230 sounds like enough though doesn't it?

how much are you currently saving each month ? €800 ?

On a week by week basis €230 isn't too bad, but add in the various large expenses such as birthdays, Christmas, holidays, nights out it becomes a bit tighter.

I advise you to start keeping track of everything you spend.

amtc

Just be aware multiples of salary is only one criterion. BOI told me your repayment even stress tested should be no more than 40% of your salary plus 1600 euro per mth as min leftover. This was in 2004 by the way.

I earn good money but after mortgage this month I had to buy a new fridge, get the car fixed, have an MRI, changed jobs which is only accessible over m50 hence tolls, mgt fee, contents insurance, as well as normal bills. Having said that I wouldn't have it any other way.

DopeTech

Humour Me wrote: »

Where are you living OP? The central bank rules limit your mortgage to 3.5 times salary. If you are looking to buy in dublin, the max mortgage won't go far on your salary.

What's the long term plan? How long do you intend to live in the place you buy?

Living in Dublin. Was looking at 1 bed apartments on daft.ie and there is a few here and there for around 120,000. The long term plan guess is to eventually find a girlfriend and we would then save for a house.

Mrs OBumble wrote: »

Are you also paying a share of the electricity / sky / food bills at the moment, or is that 100 all up? If the latter, then I suspect you might be in for a rude shock about the real cost of living.

As well as the costs outlined above, you also need to budget for :

Food
Petrol and/or bus fares
Car and or bike maintenance - and replacement
Health insurance (optional for sure - but many people believe it's essential)
Clothing and footware (you would be surprised what this can add up to, esp if female)
Haircuts / personal care / gym membership (if you do these)
Hobbies / club-memberships (whatever you do)
Socailising (living on your own will get very isolated unless you make sure you go out and do stuff)
Relationships: birthday and Christmas presents, dating costs, funeral cards etc
Holidays

Do you have your own contents insurance for the stuff which you own at the moment? You should, because as an adult it's likely not covered under your parents policy.



I would seriously recommend living in a house-share for a while (maybe only 6 months or so) - just to get some exposure to other ways of living, and the range of things which householders have to think about.

It's €100 all in, I know what you mean but I really don't want to share a house with strangers and I don't know anyone who wants to move out at the moment.

Yes it will be a big change but given the amount I am saving each week now I think I should be ok.

brightspark wrote: »

how much are you currently saving each month ? €800 ?

On a week by week basis €230 isn't too bad, but add in the various large expenses such as birthdays, Christmas, holidays, nights out it becomes a bit tighter.

I advise you to start keeping track of everything you spend.

Minimum €800, most months about 1000-1200

amtc wrote: »

Just be aware multiples of salary is only one criterion. BOI told me your repayment even stress tested should be no more than 40% of your salary plus 1600 euro per mth as min leftover. This was in 2004 by the way.

I earn good money but after mortgage this month I had to buy a new fridge, get the car fixed, have an MRI, changed jobs which is only accessible over m50 hence tolls, mgt fee, contents insurance, as well as normal bills. Having said that I wouldn't have it any other way.

A quick check on mortgage.ie says I'd have a repayments of about €600.

That would be me taking out a mortgage of 98k and putting the rest with it myself from savings. €600 sounds doable. I guess I just need to talk to my bank to see what they say.

Thanks for all the replies.

athtrasna

Mortgages are not easily available for 1 bed apartments. Banks don't see them as practical investments. You would also need to factor in management fees.

GingerLily

athtrasna wrote: »

Mortgages are not easily available for 1 bed apartments. Banks don't see them as practical investments. You would also need to factor in management fees.

I've heard of banks having higher ltv criteria for one beds because of this reason.

A_Sober_Paddy

GingerLily wrote: »

I've heard of banks having higher ltv criteria for one beds because of this reason.

Ebs only offer 75℅ mortgages on 1 bed rooms

catrionanic

Yeah, you'd need a 25% deposit for a 1-bed

DopeTech

catrionanic wrote: »

Yeah, you'd need a 25% deposit for a 1-bed

Well that should be doable. I'm half way towards that if that's the case. Thanks.

My advice is stay living at home and saving money, I'd have loved to do the same but had no option but to houseshare due getting work too far from home to commute and couldn't afford to rent alone at the time (and it would be a waste of money). Housesharing is crap and I woundn't advise anyone to do it instead of living at home.

DopeTech

Adaline Narrow Redneck wrote: »

My advise is stay living at home and saving money, I'd have loved to do the same but had no option but to houseshare due getting work too far from home to commute and couldn't afford to rent alone at the time (and it would be a waste of money). Housesharing is crap and I woundn't advise anyone to do it instead of living at home.

Yeah I'm going to save every cent I can between now and next autumn and see how my finances look. As much as I don't like living with the parents I know I'd hate sharing more. I like my own space too much.

SB_Part2

Adaline Narrow Redneck wrote: »

My advise is stay living at home and saving money, I'd have loved to do the same but had no option but to houseshare due getting work too far from home to commute and couldn't afford to rent alone at the time (and it would be a waste of money). Housesharing is crap and I woundn't advise anyone to do it instead of living at home.

I think that's what the OP is planning on doing. They're not going to move out unless they have the money to buy.

random_banter

FrostyJim wrote: »

Well that should be doable. I'm half way towards that if that's the case. Thanks.

BOI told me last week it would be a 20% deposit for a 1 bed, just to confirm.

lion_bar

My advice to the OP would be to save a little longer and buy at least a 2 bed. The rush to get on the property ladder has messed things up for some families now stuck in 1 and 2 bed apartments so be warned. They had all hoped to use it as a stepping stone to a "family" home it didn't work out so well

Only buy somewhere you are willing to be stuck for the foreseeable future.