Mortgage query first time buyer

dubsfan

hi all

I’m 44 and my partner is 43 we are currently renting from a family member and have been given the opportunity to purchase property for €220000. We are both in full time employment but don’t have any savings.

My partners parents have recently sold family home and parents are gifting him €20000 each so our plan is to open a joint account in credit union and lodge €35000. We are planning on saving €300 (150 each) weekly for between 6-12 and applying for either a mortgage through the credit union (i feel they may be our best chance) I’ve never looked in to it before so a little clueless. If we need €22000 will our savings be held against the mortgage or do we take the majority out and just try to borrow €190000?
also how far back do they check statements really want to have clean statements with nothing that may raises eyebrows.
never thought I’d be a home owner but also scared to get excited.
I really appreciate all advice

3DataModem

It would be advisable to

• have 6 months clean statements
• have a savings history of 3-6 months

The mortgage approval process will assume the 35k will be spent on the house.

Citrus_8

I recommend using free brokers (they get commission from a mortgage provider). I used Irish Mortgage Corporation and found them very helpful and responsive. Just book an appointment with a broker for a chat and they will guide you.

Henry Ford III

https://www.boards.ie/discussion/comment/123979678#Comment_123979678

No such thing as free. Everything has a cost.

extra-ordinary_

https://www.boards.ie/discussion/comment/123978977#Comment_123978977

Best not to give any exact house purchase price to the bank. The mortgage approval amount is based on an earnings multiple divided by an ability to pay back the loan within the term agreed.

Rocket_GD

https://www.boards.ie/discussion/comment/123980821#Comment_123980821

What is this cost?

Jim2007

https://www.boards.ie/discussion/comment/123982029#Comment_123982029

If you read the original post, it stated: "they get commission from a mortgage provider". And that cost eventually is passed on to you. And there are may other legal ways to recover costs, one common one being charging market makers or having them pay commission for transactions. And that can lead to come clinets not getting the best price. There is noting free in the financial services sector nor are any of the players there to make you rich.

Rocket_GD

https://www.boards.ie/discussion/comment/123982339#Comment_123982339

We used Irish mortgage corporation as well and managed to secure a better deal than we were being offered directly by the various lenders. Didn't pay them a single cent, and haven't again on switching.

The number of brokers may have an impact on the market itself but the service they provide is excellent and less hassle than doing it yourself.

Jim2007

https://www.boards.ie/discussion/comment/123982350#Comment_123982350

And you point is what? How for instance can you tell if a trade was executed at the best price or at the price that rendered the highest commission? The whole point is that you won't see cash change hands as member of the general public.

Henry Ford III

Lenders aren't charitable. Anyone who believes that you get something from one "free" needs to rethink how these things work.

The brokers fee will be built in somewhere (into the lenders margin probably) and the end customer always pays that.

Boardnashea

Replying to the original question, CUs may require up to €1000 or so to be held against a loan account. I don't think any CU uses the old "3 times your savings" ratio anymore.

Mellor

https://www.boards.ie/discussion/comment/123982339#Comment_123982339

Can you give an example of how the cost eventually is passed on to you?
As in specifically to the customers who used brokers, distinctly from all customers. As that seams pretty unlikely.

https://www.boards.ie/discussion/comment/123983483#Comment_123983483

You might need to rethink how it works in a bit more detail.
It's pretty simple how cost of acquisition works.

The brokers fee will be built in somewhere (into the lenders margin probably) and the end customer always pays that.

Built into the rate (not margin), right. And who pays that?

Bandana boy

Don't be afraid to use a broker as a first time buyer

They are paid out of the Lenders acquisition cost.

And while you could argue if you knew what they knew you could get a better deal cutting our their cost , if you don't know what they know then its probably a better deal than you could get yourself.

If it does cost you , you are paying for their expertise , which nearly always is still cheaper than doing it yourself.

bop1977

looking at your situation, you will need the 10% deposit.

you will need to show savings, your rent will also factor into the banks calculation as part of your ability to repay.

you will need 1% stamp duty. and you will need to cover your legal expenses which the last time I bought were £3-4K.

another thing you need to take into account is what is the current market value of the house you are looking to buy and are you buying it off family at a reduced rate, there might be a concern from revenue. they could look at it for gift tax. might, but unless its way below market rate then they might ignore it.

then finally you will need an upgrade budget. new doors, floors, house alarm, windows, insulation, solar panels, car charger white goods replacement, new kitchen, driveway done and back garden. and don't forget when things brake you are on the hook to fix or replace them. no more calls to the landlord. these are the things they don't tell you about home ownership.

the banks and credit unions are working to the same rules now regarding mortgages so if you get approved for one it should be the same for all institutions just see who is offering the best rate and go with them.