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Can someone tell me how help to buy works

  • 31-10-2021 8:46pm
    #1
    Registered Users Posts: 344 ✭✭ KurtBarlow


    As the title says id appreciate someone explains it . How new does a new build have to be



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Comments

  • Posts: 0 ✭✭✭ [Deleted User]


    It just needs to not have been used as a residence by anyone else before.



  • Registered Users Posts: 2,546 ✭✭✭ C14N


    "New" basically means you're the first person to live in it. It could be bought from a new development, or a house you have built yourself. The process for buying both of these is very different from buying second hand, so there isn't much chance for ambiguity.

    If it's not new, you get nothing. Rennovation doesn't count either.



  • Registered Users Posts: 1,751 ✭✭✭ Buddy Bubs


    The government gives you some tax back to fund deposit on a new builds house, you then go armed with a higher budget to the developers agent, they jack up the price by 30k and you buy a house. That's basically what has happened



  • Registered Users Posts: 344 ✭✭ KurtBarlow


    Do you still require your own deposit . Can you tell what houses on daft are eligible under the scheme



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  • Registered Users Posts: 1,751 ✭✭✭ Buddy Bubs


    That post was a bit tongue in cheel above but really that's what happened. My brother did it, he was one of the very first to avail of it. I'm talking first days of the scheme. 2016 or 2017, whenever it came out can't remember exactly. He had his 10% saved and a bit more, about 40k saved for a 380k house.

    They then got the HTB grant, somewhere around 20k. He used most of the 20k HTB to top up his deposit and reduce mortgage but he could have used it as part of his deposit and kept 20k in savings if he wanted. He bought in the first sales weekend, they all sold out. The following weekend they were on sale again, magically up 20k on the weekend before. Same as the HTB amount.



  • Registered Users Posts: 26,429 ✭✭✭✭ Creamy Goodness


    Yes you do, as a first time buyer, you require 10% deposit, the HTB gives you 5% of the purchase price *up to* €30,000 whichever is the lowest. Depending on how much of a mortgage you qualify for and the area you're buying in you need to make up the difference.

    For example I availed of the HTB in 2018, I got 5% of the purchase price and had a 75% mortgage, the LTV (Loan To Value of the home) has to be 70% or greater otherwise you can't avail of the HTB.


    The HTB did increase prices somewhat by increasing people's buying power, however if you fit the criteria it's "free" money that shouldn't be sniffed at.



  • Registered Users Posts: 2,546 ✭✭✭ C14N


    This doesn't compute. If it's 5% of the purchase price at most, then you will never get €30,000, because that would require a house valued at €600,000, which would be ineligible for HTB as the upper limit on price for a HTB purchase is €500,000.

    I did apply for help to buy and was approved for €30,000, but ended up not bothering as there are basically 0 eligible properties in Dublin. However, my understanding when I was looking into it was that you can use the HTB figure to fund your deposit.



  • Registered Users Posts: 26,429 ✭✭✭✭ Creamy Goodness


    Sorry it was 5% of purchase price to a max relief of 20k at the time I went through it and I mixed up the figures between then and now. I believe it's now 10% of purchase price to a max of €30k now. The Citizen's info link posted previously explains it better than I can :P.

    There's two sides to the HTB, one is what you state, it's to help fund your deposit, the other is to incentivise building of more homes. The fact there's no eligible properties in your area though is not the fault of the HTB, it's the same as not bothering if there's no new builds in say Leitrim or <insert_other_county_here>.



  • Registered Users Posts: 47 danfrancisco83


    I bought a home through HTB. In the beginning I was sceptical, because usually there is a catch.

    There are 2 catches I found, the first is that yes, house prices on new builds magically went up by about 15/20k at the time it was introduced, it is what it is. Secondly, you have to live in the property for 5 years before selling, and you can't rent it out before the 5 years is up either.

    At the end of the day, I hadn't anything close to a deposit for a house, barely 2k in the credit union, resigned myself to being a renter for life.

    This almost looked too good to be true. Thankfully it all worked out, and now my mortgage is about €600 less per month than my rent was!

    It's a bit of hassle with the back and forth with revenue, but worth it in the end.



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  • Registered Users Posts: 344 ✭✭ KurtBarlow



    So you didn't have any deposit yourself? Also with regards renting out not being allowed , is that applicable to renting out the whole house as a let only or can you not even rent out one of the rooms if your still living in it



  • Posts: 0 Elsa Wide Sink


    Applied, got approved in principle in about two days (had all affairs in order to be fair) and when time came for claiming the amount it was equally efficient


    Whatever people might gripe about the effect it has on new house prices, its 30k towards a deposit that i didnt have beforehand and it made the difference for us. I wasnt sniffing at it



  • Registered Users Posts: 47 danfrancisco83


    I'm not fully sure of the 5 year rules, because I have no intention of moving or renting out for the forseeable.

    I had just cleared a CU loan, had about 2k and not much else, paying a high rent for a decent apartment in Dublin. I had heard some different advice about HTB, each contradicting what I had just been told. I rang a solicitor who was a friend of a friend, he explained it perfectly.

    He said once you give the solicitor 2k or 5k or whatever the booking deposit on the home is, you're half way there. Solicitors fees are around 5k, but you don't have to pay this until the very end, basically when you sign for the home. This was a huge relief for me.

    The way I did it, I borrowed from Peter to pay Paul at every step. My timeline, as an example, was this:

    Got mortgage approval, got HTB codes (qualified for max 30k)

    Found a new eligible home for 300k

    Put down 2k booking deposit

    The 30k for HTB gets released to your solicitor, this is the deposit. You have already given solicitor 2k, they are owed 3kish

    Get a small loan from family member (7k) to pay the solicitor and put down floors and pay the rest

    of the solicitor's fees.

    The minute you own the home, hit the credit union for a loan, pay back family member, and done!


    That was how I did it. Even if I couldn't get a small loan from family, it just would have meant going without floors for a few weeks more.



  • Registered Users Posts: 344 ✭✭ KurtBarlow


    Is the solicitor and mortgage broker the same thing



  • Registered Users Posts: 47 danfrancisco83


    No. You will have your solicitor, who will deal with the developer's solicitor. I didn't use a mortgage broker.



  • Registered Users Posts: 14,306 ✭✭✭✭ jimmycrackcorm


    I bought my house many years before any incentives such as HTB on the opening day of sales. I went back the next day to look at the houses and the prices had magically gone up by 20k overnight. Assuming HTB is the cause is just an assumption. There is so much demand and short supply that the prices will go up regardless.



  • Posts: 0 [Deleted User]


    Yes, you can use the Rent a Room scheme if you're within the 5 years HTB limit.



  • Registered Users Posts: 2,546 ✭✭✭ C14N


    Tbh, I think it is the fault of the HTB as a scheme, because it wasn't well designed. It's trying to do two jobs that don't always, or even regularly, line up. The reality is that new builds are, in general, going to be pretty expensive. All else being equal in terms of things like area and size, a new build will usually be built to a higher standard, with more modern finishes, and will therefore be more desirable and probably more expensive than a similar second-hand build. So if the goal is just to help FTBs get a foot on the property ladder, it's not much help to many, especially those living in urban areas (and a lot of FTBs will be younger professionals who will be working and living in these areas). In general, it would make more sense for people at the bottom to be buying older, cheaper places to get a start, and then trading up to something newer when they have more money.

    Incentivising building could then be a completely separate issue. There's no reason to only incentivise new builds for FTBs. Families trading up, or elderly people who might be downsizing need new builds just as much as first-time buyers do, probably even moreso. FTBs are a limited segment of the market so incentivising new builds through them only is going to have a limited effect.

    I don't think the Leitrim case is a good comparison though. You don't need to wait for a developer to build something for you, you can build yourself and HTB will work for that too; meaning that in more rural counties like Leitrim where more people will be doing their own builds, the HTB is a huge help, since the upper limit is unlikely to be a problem there.

    All that being said, while I think HTB is a bad scheme from a public policy standpoint, and not very helpful for a lot of FTBs, if you are eligible for it and are looking somewhere that you actually can get a new house for under €500k, you'd be a fool not to take it. It's a huge amount of easy cash in hand. If you're getting potentially 30k tax free (not too hard if you're a working couple who have 5 years of taxes paid), that goes a huge amount either toward a deposit or just giving you a huge lump of extra savings to hang onto if you already had it sorted.



  • Registered Users Posts: 344 ✭✭ KurtBarlow


    I have htb approval for 30k. Whats the next step. Should i still try and have 10% for the deposit



  • Registered Users Posts: 2,546 ✭✭✭ C14N


    It's probably good to also have a 10% deposit, as this will give you some more flexibility in buying in case you end up not getting a new house. Even if you are 100% dead set on getting a new build though, regular savings will stand to you when applying for a mortgage, and you can often get lower interest rates if you contribute 20% of the value of the house.

    If I was you, I'd either start talking to some banks or a mortgage broker about getting mortgage approval. You can apply with a few different banks and see what each will give you to try and get the best rate. If you get approval early on it will make it a lot easier to start shopping, since many sellers (for new or second-hand builds) will ask that you have your mortgage approval in place before agreeing to accept an offer.

    Also, look for some solicitors in and around your area and ask them (either send an email or call) how much they charge for services needed to buy a house so you can get a few quotes and keep one on retainer. It will be good to have someone ready to go early so that you aren't scrambling to find one if and when you do find somewhere to buy.



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  • Registered Users Posts: 47 danfrancisco83


    The HTB 30k is the deposit, if your budget is 300k. You'll also need to think about floors, carpets, bathrooms, depending on what's included in the price. Getting mortgage approval should be your next step, that can take a few weeks.



  • Registered Users Posts: 344 ✭✭ KurtBarlow


    I have help to buy approval of 30k and that A Number they give you. My parents willing to Gift me 10 to 20k aswell . Just wondering whats the next step? Do i Contact a solicitor or Broker?



  • Posts: 0 [Deleted User]


    Have you found a house yet? Mortgage Approval in Principle? What stage are you at?



  • Registered Users Posts: 344 ✭✭ KurtBarlow


    I'm at no stage really. I don't think I'm going to go with HTB. Most of those new build houses are well above budget for me as a single applicant.



  • Registered Users Posts: 344 ✭✭ KurtBarlow




  • Posts: 0 [Deleted User]


    Your budget is 3.5 x your gross salary plus whatever savings & HTB & gift (to be min. 10% of the overall) you have. You need to start talking to banks to find out what your approval in principle will be. Play around with the details here - the amount you wish to borrow is the 3.5 x salary - Compare Mortgage Rates in Ireland | bonkers.ie to get an idea of the repayments and what you can pitch as your budget.



  • Registered Users Posts: 344 ✭✭ KurtBarlow


    Im on a good salary but alot of it is för Overtime . Can i still multiply gross salary by 3.5?



  • Posts: 0 Elsa Wide Sink


    If you havent found a house yet then engage a decent broker, itll be well worth it

    Help to.buy part is a.mile.off yet until youfind your budget and get approval in principle and deposit down on somewhere



  • Moderators, Society & Culture Moderators Posts: 32,260 Mod ✭✭✭✭ The_Conductor


    No- you can't factor overtime or bonuses into the equation- only core salary, and the prospective lender will likely request a salary certificate to ensure you're not telling fibs.



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  • Registered Users Posts: 344 ✭✭ KurtBarlow




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