Advice on FTB / Rent

1sttimebuyer

Hi,

So I am looking for some advice on my circumstances. I am a 30 y/o single guy living with parents (I have lived away but moved home for personal reasons about 3 years ago) ready to move out again.

I am about to sign a lease on an expensive apartment which wouldn't leave me much money left over to save. So I was thinking before I do it to consider my options and see if saving for a deposit would make more sense for me and to understand what the rules are re deposits and saving history etc.

Current circumstances:
Full time job earning 80k + 15% bonus
Savings 4k (sporadic savings history)
Credit card debt 3k
Credit Union 3.5k debt 1k savings
Bills and outgoings 800 per month the rest is discretionary spending

The rent on the flat I am looking at is 1800 per month 1 bed but much nicer than I could afford if I was to buy it.

Obviously paying down debt would be priority if I wanted a mortgage for and I think id need to display a year of saving history which put me off because I don't want to live here this time next year.

I understand I could get possibly 3.5x 80k plus 10% deposit which is 308k. Seems there are a few apartments around D8 area that I could get for around that price. But would take me about 18 months to save.

If I found a new build I could get 5% from the "Help to Buy Scheme" but I doubt there'll be any new apartments built anywhere I'd like to live.

So looking for comments and advice.

keane2097

You're at nothing with a net worth of -€2.5k off an €80k+ salary with only €800 a month of obligations.

I would recommend focusing on getting a handle on your finances because you must be wasting an outrageous amount of money - something like YNAB would be a good place to start.

Thinking about buying a house or apartment before that is probably not sensible, but FWIW if I had the opportunity to keep my costs very low for a year to give myself a good start on savings/deposit I would be taking it.

Alkers

Agree with the above. Would you consider renting with friends while saving? You should be easily able to afford it on that salary.

catrionanic

Just to add, banks won't take bonus payments into account as they are not guaranteed. So don't factor that into your LTV calculations.

cronos

catrionanic wrote: »

Just to add, banks won't take bonus payments into account as they are not guaranteed. So don't factor that into your LTV calculations.

I do think they can calculate it in as part of making exceptions to the LTV rule though. However given the saving history here I highly doubt they would or should break the rule.

listermint

Don't take the apartment would be my advice ludicrous money for a single person with real notions of saving for buying.

Look for something more sensible

TimeToShine

That it an impressive amount of discretionary spending.

witchgirl26

catrionanic wrote: »

Just to add, banks won't take bonus payments into account as they are not guaranteed. So don't factor that into your LTV calculations.

Not all bonuses are not guaranteed. They will take account of them if they are contractual bonuses so that would be something I'd check with them.

That seems like a mad amount for a 1-bed place - would you consider looking around a bit more and maybe getting something a little more modest for renting so that you can focus on clearing debt/increasing savings? I know the rental market is a bit mad at the moment but there has to be something cheaper than 1800 a month for a 1-bed out there that would suit you.

Stay living at home and save very hard would be my advice. Spending money on rent makes no sense, particularly spending massive amounts to live in a 1 bed. I'd personally far prefer to be living at home than house sharing also.

As others have said though you need to sit down and start to manage your finances. your debts are very low compared to your income, realistically you should be able to clear them completely in a few months from your disposable income.

dudara

At €80k, your take home pay is in the region of €4k/month (without knowing pension details etc). My advice is to seriously examine your discretionary spending and start saving at least €1k - €1.5k per month.

1sttimebuyer

Thanks all for the advice. To be honest it was the advice I wanted and really knew myself but wanted it validated I suppose.

My discretionary spending is excessive but is easily brought under control as a very large portion goes on expensive holidays and trips. I've seen most of the World at this stage so can easily cut out multiple trips a year to expensive hotels and go on one modest holiday per year and a trip or two now and then.

I understand that the bonus doesn't impact the amount I can borrow I only mentioned it because I can use it to bump up a deposit when I get it.

AlmightyCushion

1sttimebuyer wrote: »

Thanks all for the advice. To be honest it was the advice I wanted and really knew myself but wanted it validated I suppose.

My discretionary spending is excessive but is easily brought under control as a very large portion goes on expensive holidays and trips. I've seen most of the World at this stage so can easily cut out multiple trips a year to expensive hotels and go on one modest holiday per year and a trip or two now and then.

I understand that the bonus doesn't impact the amount I can borrow I only mentioned it because I can use it to bump up a deposit when I get it.

First thing you should do is get rid of your debt especially that credit card bill. The interest on that is very expensive. If I were you I'd use your savings to get rid of the credit card bill now. Once you cut back your discretionary spending and start saving you'll get your savings back up to 4 grand in no time.

Also, as said above. I wouldn't pay €1,800 for a place for myself. It's crazy money. Either find somewhere cheaper or house share.