Interested in buying in future, any advice?

jdxctxr

Hi all,

I couldn't find a thread that suited me much, so decided to make one.
I'm a new graduate, and 24 years old. I'm currently renting in Dublin, and working in the HSE.
I'm currently single, and I will most likely remain single, which is fine with me.

Regarding my rent, it's slightly above average for my area, but I have decided to stay here for a while (don't want to discuss more about why here if that's ok), and I don't have the option to live with parents rent free as they aren't around.

In terms of savings, I only have about €2000 (Yes I know, but college loans drained me). I'm not planning on buying like real soon, but with current rents, a mortgage is something I'm really considering.

At the end of the day, I just want to be able to buy a new build of some sort in the Dublin suburbs.

I just had a few enquiries.

- I was just wondering if anyone has any tips on how I can prepare? I know saving for a deposit is a bit one of course, but any other tips to make me look like an attractive applicant when the time comes, and even apps/advice on saving
- I currently have a long term illness. I have heard some stories where people haven't been insured because of some healthcare problems, etc. Is this a huge issue? Is there a way I could get insured with my condition? Any general advice on this topic?
- Is the 3.5 x your income a very strict rule? Is that also taking overtime pay into account?
- Does anyone have any financial advisors they would recommend? I have found that a few never get back to me even though I'm not in debt or anything, so I'm assuming I'm not an ideal client for them
- Most importantly, am I being super ambitious? Yes I'm aware of the current prices of new builds, my current savings amount, and considering me being a singleton.

Thanks for the advice in advance

Kurooi

-save your deposit. Once you're close (6-12 months away from having enough to cover 10% price of a property) make sure your accounts are in order. Good saving record, no unpaid bills, no stupid purchases especially big spending spikes.
-I could not advise on that
-3.5 is very strict, technically you can extend this to 4.0 with an exception but I wouldn't count on it.
Overtime... if your employer signs off that it's 'guaranteed', it has to be a regular part of your job.
-No
-Depends on salary

Realistically you need to take a hard look at what your 3.5 salary and deposit affords you. Unless you're on 50k+ gross it could be very difficult for a single person to buy in Dublin, esp houses in suburbs you listed.

jdxctxr

Kurooi wrote: »

-save your deposit. Once you're close (6-12 months away from having enough to cover 10% price of a property) make sure your accounts are in order. Good saving record, no unpaid bills, no stupid purchases especially big spending spikes.
-I could not advise on that
-3.5 is very strict, technically you can extend this to 4.0 with an exception but I wouldn't count on it.
Overtime... if your employer signs off that it's 'guaranteed', it has to be a regular part of your job.
-No
-Depends on salary

Realistically you need to take a hard look at what your 3.5 salary and deposit affords you. Unless you're on 50k+ gross it could be very difficult for a single person to buy in Dublin, esp houses in suburbs you listed.

Thank you for that
My current salary is 40K this year, so I am fully aware I'm priced out of most places in Dublin at the moment. Overtime varies, but it's been around 10K so far.

Yep, my fear is that I won't be able to buy in Dublin.

Are there any single people on this who have managed to buy in Dublin, and if so, any vague details?
I'm probably being extremely nosey asking this, but I'm just curious as it seems extremely impossible at the moment for me

Baby01032012

I don’t want to be negative but why do you need to buy soon. You’re 24 your circumstances could change in terms of partner, higher salary etc.

You could get a one bed apartment in north or west Dublin but buying ties you to that for rest of your life. It’s a huge commitment. Sorry but also the health issue could prevent you from getting life insurance and as a result a mortgage.

the_syco

jdxctxr wrote: »

working in the HSE

Will your job move location?

jdxctxr

Baby01032012 wrote: »

I don’t want to be negative but why do you need to buy soon. You’re 24 your circumstances could change in terms of partner, higher salary etc.

You could get a one bed apartment in north or west Dublin but buying ties you to that for rest of your life. It’s a huge commitment. Sorry but also the health issue could prevent you from getting life insurance and as a result a mortgage.

I'm not looking to buying soon, I'm looking at buying at some stage in the future.
Yes, looking at pay scales, my salary tends to increase yearly, but I'm asking this now because I'm just wondering if I can start doing something now bit by bit, instead of just parking it aside until the time comes

I've already enquired about life insurance with two brokers, and I am eligible to get a plan out, so that's not an issue

jdxctxr

the_syco wrote: »

Will your job move location?

It is a possibility, yes

FastFullBack

At 24, you're very young so lots of potential to increase earnings. I think the best think you can do, to help your future self is to do everything you can now to increase your earnings e.g take whatever training is available, apply for promotions, even changes jobs. It's should be possible to nearly double your earnings in the next 10 years.

That would greatly help your mortgage process

L'prof

Time is your best friend here. I was in my 30s before buying a house ever entered my head

You say you’re on €40k now, with the 3.5x salary rule you’re looking at house prices of €155k including your 10% deposit. That’s not getting your much if anything in Dublin

If a few years down the line your earnings increased to say €60k then you’d be looking at houses for €233k, needing a deposit of €23k

What if you then find a house that you want to buy for €250k? Then the bank would still only give you 3.5x your salary, so €210k, meaning you’d need a deposit of €40k to be able to buy that house

The one thing that people often overlook is moving in expenses, stamp duty, etc. For a house that price the bank would like you to have an extra €7k give or take to cover all that so you’d really need about €47k in savings if you wanted to buy a house on your own for €250k while on €60k earnings

I just picked arbitrary prices and earnings here as I thought giving you a worked out example would help you make sense of the process and money involved. Sorry if I’ve confused the issue

niniboots

Ask Paul on Instagram has some great free information, videos and if you're future planning it's worth getting some professional advice. Rebuilding Ireland homeloan might be an option with your 3.5 salary cap. Help to buy will probably be extended in future unless the Government changes dramatically. There is also affordable housing scheme coming online which allows you borrow from govt interest free for 5 years. It's inflating house prices further but they are all options with a large deposit...Who knows what way prices will go, some on the boards are convinced we are in another 'bubble' and the associated effects of covid will dramatically change accommodation landscape. Some are convinced it will keep rising, supply & demand theory, whatever side of the armchair economist's you believe it won't make a difference to your immediate plans as you're good few years away from mortgage, unless there is a windfall of some sort. Eoin in Finance Ireland Lucan was really helpful and they offer free broker services as their commission is obtained via lenders. Ask Paul charges 250 for full financial planning & mortgage. Save, save & save it's always good to have a buffer regardless if you use for mortgage. Best of luck

Humour Me

Honestly just start saving. When I started my first job after college I set up 2 savings accounts. One was for general costs, holidays, car insurance etc. The other account I put an amount in every month and have not taken any funds out to date. 10 years later this is my house deposit ready to go when I decide to buy.

Put a little away each month, live your life, work on moving up the salary scale and in a few years when you know where you want to be you will be in a position to buy.

Buddy Bubs

jdxctxr wrote: »

I'm not looking to buying soon, I'm looking at buying at some stage in the future.
Yes, looking at pay scales, my salary tends to increase yearly, but I'm asking this now because I'm just wondering if I can start doing something now bit by bit, instead of just parking it aside until the time comes

I've already enquired about life insurance with two brokers, and I am eligible to get a plan out, so that's not an issue

I worked in life insurance before, did the brokers put in an application with the underwriters? If you have medical history they will want to know about it....brokers don't make any decisions about who does and who doesn't get cover.
And even if you are eligible now, you may not be eligible in a few years if anything happens in the meantime.

2 things I'd do if I was you

.....put in a proper application for life cover and see how you get on. Don't need a mortgage to get life cover. Don't even have to go ahead with the policy. But if you have the policy it can't be taken away from you.

Keep saving and keep progressing your career. Bring your mortgage entitlement up and your mortgage requirements down.

thomasdylan

If like your name suggests you're a junior doctor you shouldn't be thinking of buying yet.

If you do your training in Ireland you've probably 6-8 years of moving hospitals all around the country ahead of you. Then fellowship abroad.

And if you've started out recently you're probably fortunate in a way. There have never been more interns than now so you're having to work less and being better supported than you would be in other years. I think travelling and maybe a year or two in Australia/New Zealand is what you should be thinking about now more than getting a mortgage.

jdxctxr

FastFullBack wrote: »

At 24, you're very young so lots of potential to increase earnings. I think the best think you can do, to help your future self is to do everything you can now to increase your earnings e.g take whatever training is available, apply for promotions, even changes jobs. It's should be possible to nearly double your earnings in the next 10 years.

That would greatly help your mortgage process

Thank you for this

jdxctxr

L'prof wrote: »

Time is your best friend here. I was in my 30s before buying a house ever entered my head

You say you’re on €40k now, with the 3.5x salary rule you’re looking at house prices of €155k including your 10% deposit. That’s not getting your much if anything in Dublin

If a few years down the line your earnings increased to say €60k then you’d be looking at houses for €233k, needing a deposit of €23k

What if you then find a house that you want to buy for €250k? Then the bank would still only give you 3.5x your salary, so €210k, meaning you’d need a deposit of €40k to be able to buy that house

The one thing that people often overlook is moving in expenses, stamp duty, etc. For a house that price the bank would like you to have an extra €7k give or take to cover all that so you’d really need about €47k in savings if you wanted to buy a house on your own for €250k while on €60k earnings

I just picked arbitrary prices and earnings here as I thought giving you a worked out example would help you make sense of the process and money involved. Sorry if I’ve confused the issue

The worked example actually made me realise how things are, so thank you!

jdxctxr

thomasdylan wrote: »

If like your name suggests you're a junior doctor you shouldn't be thinking of buying yet.

If you do your training in Ireland you've probably 6-8 years of moving hospitals all around the country ahead of you. Then fellowship abroad.

And if you've started out recently you're probably fortunate in a way. There have never been more interns than now so you're having to work less and being better supported than you would be in other years. I think travelling and maybe a year or two in Australia/New Zealand is what you should be thinking about now more than getting a mortgage.

Haha thank you!
I mean you've got a point, I just never really considered working abroad after intern year, but who knows what will happen.

Again, thanks for the advice