€100k deposit, €180k budget

dynamited · 05-12-2014 12:03pm #1

Hi All,

Sorry i am new to this but have been keeping an eye on things for awhile and i am in need of some advice

I am looking to buy a house in either of the following areas within the next year

D10,D12,D15

I have 100k deposit and the bank are only offering me 78k mortgage,although i am quite happy with that as i don't want to borrow much as i want to live within my means as i plan on being single for a long time

I currently earn 26k per year but earned alot more a few years ago in previous jobs

Stats : Male, 26 years old, single , no kids

Obviously the new CB mortgage lending rules shouldn't affect me (hopefully not) do you think i should try buy within the next 2-3 months or wait until later next year to see if the house prices drop???

Any advice would be great

Thanks

handlemaster · 05-12-2014 12:10pm

Get approval sorted in writing. If you see a property you like be ready to move. D15 you will get properties in your price range. Have you visited these areas to see whats on offer ?

dynamited · 05-12-2014 12:15pm

handlemaster wrote: »

Get approval sorted in writing. If you see a property you like be ready to move. D15 you will get properties in your price range. Have you visited these areas to see whats on offer ?

Yes but alot of the ones i am after are going for 200-210k so i'm hoping maybe the new lending rules may lower sellers expectations in that area of the market

I have been approved and i'm looking atm , but like i said unfortunately the decent houses are over 200k

Fingers crossed prices in this end of the market drop within the new year

David900 · 05-12-2014 12:15pm

A lot of properties around Ballyfermot in that price range too.

handlemaster · 05-12-2014 12:23pm

dynamited wrote: »

Yes but alot of the ones i am after are going for 200-210k so i'm hoping maybe the new lending rules may lower sellers expectations in that area of the market

I have been approved and i'm looking atm , but like i said unfortunately the decent houses are over 200k

Fingers crossed prices in this end of the market drop within the new year

So how much % drop are you hoping for ? If there is an influence with this new deposit requirement it will be an up lift for the properties under 200k and stagnation above. Thats for Dublin.

dynamited · 05-12-2014 12:26pm

handlemaster wrote: »

So how much % drop are you hoping for ? If there is an influence with this new deposit requirement it will be an up lift for the properties under 200k and stagnation above. Thats for Dublin.

hoping for a 10-20% drop in the houses that are under 200k

handlemaster · 05-12-2014 1:03pm

dynamited wrote: »

hoping for a 10-20% drop in the houses that are under 200k

Thats never going to happen. Best make other plans.

Mr.McLovin · 05-12-2014 1:07pm

what type of property are you looking for? - house, apartment, 2 3 bed?

David900 · 05-12-2014 1:13pm

I'm a bit lost, doing a quick search on daft throws up a lot of options within your budget in those post codes.

What exactly are you looking for? Better value?

dynamited · 05-12-2014 1:38pm

David900 wrote: »

I'm a bit lost, doing a quick search on daft throws up a lot of options within your budget in those post codes.

What exactly are you looking for? Better value?

In a nutshell Yes, i don't think much of these are worth the prices they are looking for

dynamited · 05-12-2014 1:40pm

handlemaster wrote: »

Thats never going to happen. Best make other plans.

Well the the new CB lending rules are reported to wipe 50-60 percent of FTB's off the market for the foreseeable future and alot of those properties are FTB territory

P. Breathnach · 05-12-2014 1:44pm

I don't think you are going to see a drop in Dublin prices in the €150-250k price range; if anything, I think the new restriction might drive them up a little because people who were targeting properties in the €250k+ range might be forced to aim for a lower price option.

Of course I might be wrong.

dynamited · 05-12-2014 1:57pm

P. Breathnach wrote: »

I don't think you are going to see a drop in Dublin prices in the €150-250k price range; if anything, I think the new restriction might drive them up a little because people who were targeting properties in the €250k+ range might be forced to aim for a lower price option.

Of course I might be wrong.

I hope you are friend

David900 · 05-12-2014 1:58pm

its difficult to predict where prices will be in 6 months with all the moving variables of the CB limits, increasing demand but also the beginning of supply expansion.

However, it's likely prices will drop significantly in that timeframe.

Best advice I can give, if you're looking better value, is to buy a property you can add value to.
Even if prices come back a bit, it would likely provide you with a buffer.

Larbre34 · 05-12-2014 3:48pm

Sit on it for another year, you are plenty young.

Why do I think that? We still dont have a functioning market, there are a lot of artificial variables still to be worked out, i.e. the percentage of cash buyers reducing to a more typical level, the deposit and lending ratios for the future yet to implemented. When the market returns to less dysfunctional profile, then you will have a real idea what prices and value are and more predictable appreciation into the future. Whatever else happens next year, the new ratio requirements arent going to trigger a boom in prices

Robbie32 · 05-12-2014 4:09pm

I recently sold my house, and to be honest didnt get much in my pocket after the mortgage was paid off.
I am now looking in dublin. I am lucky that I have a bit of a deposit saved.
I have been talking to banks recently and the money they have been offering me is crazy. I was actually offered more of a mortgage then I was offered in 2008, when I bought my last house.
My salary hasnt increased much since then, so it was a shock at the amount being offered.

Like you dynamited I want to live within my means and be able to enjoy my life. And also like you I have been wondering what is in store for the housing market.

It is insane at the moment. There were 2 couples looking to buy my house and they were cash buyers. They actually told me when I gave them the keys that it was the 4th house they have bought recently as an investment.
My parents have recently sold their house and they had 8 people looking to buy it, and all cash buyers. My parents have actually put and offer in on a house 2 months ago and havent even been told whether accepted or not. So they pull out of that for another one. The offer was accepted, not it looks like the bank is acting up with the current owners over negative equity. It seems to be a minefield.

I am inclined to think that this new rules will push the prices of the "affordable houses" into a place where they are out of reach.
I have actually decided to rent to see what happens. no point jumping the gun....

P. Breathnach · 05-12-2014 4:09pm

Larbre34 wrote: »

.... the percentage of cash buyers reducing to a more typical level...

That's an interesting question: what is the typical level? Does anybody know?

Robbie32 · 05-12-2014 4:12pm

I would like to know the percentage of cash buyers, because from what I have heard recently it is extremely high, and they are hoping prices will rise....

Mrs OBumble · 06-12-2014 1:15am

Keep looking - but don't be pressured to buy until you find something that gives you the right value. If you are happy to wait and for months, maybe even some years, you are likely to find the occasional house comes onto the market at a particularly good price for whatever reason (eg an estate sale, a marriage split where they're keen to get rid of it quickly, etc). Not being in any rush is a good thing.

The_Conductor · 06-12-2014 11:40am

P. Breathnach wrote: »

That's an interesting question: what is the typical level? Does anybody know?

I don't think there is any enumeration of typical- given we have only recently started releasing mortgage figures (and you have to extrapolate from the Central Bank figures and the Property Price Register- to come up with any figures at all..........

Over the last 24 months- up to 40% of sales have been 'cash sales' that is- they feature on the property price register- but as gross sales (in numbers of units sold) are 40% lower in the central bank figures- you can extrapolate that these are cash sales.........

You could sit down and do a complete tally of Property Price Register sales for a 12 month period- and look at the comparable Central Bank figures for mortgages drawn down over the same period- and you'd have a yardstick you could work with?

P. Breathnach · 06-12-2014 12:11pm

The_Conductor wrote: »

I don't think there is any enumeration of typical- given we have only recently started releasing mortgage figures (and you have to extrapolate from the Central Bank figures and the Property Price Register- to come up with any figures at all..........

Over the last 24 months- up to 40% of sales have been 'cash sales' that is- they feature on the property price register- but as gross sales (in numbers of units sold) are 40% lower in the central bank figures- you can extrapolate that these are cash sales.........

You could sit down and do a complete tally of Property Price Register sales for a 12 month period- and look at the comparable Central Bank figures for mortgages drawn down over the same period- and you'd have a yardstick you could work with?

I recognise all of this, but what piques my interest is what happened, say, 20 years ago. There were cash buyers back then (I know some). I think it very unlikely that they represented anything like 40% of the market, but I'd like to know if they represented 5%, or 10%, or 20%.

There is a view that cash buyers distort the market, There is also a view that there is a large, but finite, number of cash-rich people who will sometime soon have spent their money, after which the market will settle down to "normal" patterns.

I don't think we have the data to underpin any theories about what "normal" market activity actually is.

dynamited · 06-12-2014 4:44pm

I've noticed they have started to drop since the CO mortgage lending rules were announced and I'm starting to get harassed by estate agents with replies in regard to enquires I made about certain properties

whereas just a few months ago I wouldn't hear a thing back from them

looks like they're getting desperate

dynamited · 08-12-2014 9:35am

Ok Folks,

Viewing a place for 190k on Wednesday, if i like it i will put an offer of 180k in

Mortgage over 35 years will work out @ 344 per month but obviously will rise as interest rates are so slow atm

Hoping i'm doing the right thing as i have been saving for the past 10 years ( Last 18 months i have been in frugal mode and sacrificed alot)

Fingers crossed

irish gent · 08-12-2014 9:48am

best of luck in the house hunting .

hadoken13 · 08-12-2014 9:57am

The_Conductor wrote: »

I don't think there is any enumeration of typical- given we have only recently started releasing mortgage figures (and you have to extrapolate from the Central Bank figures and the Property Price Register- to come up with any figures at all..........

Over the last 24 months- up to 40% of sales have been 'cash sales' that is- they feature on the property price register- but as gross sales (in numbers of units sold) are 40% lower in the central bank figures- you can extrapolate that these are cash sales.........

From my understanding it's not just cash sales that appear on the property price register. Is there an identifier that distinguishes cash sales on the register?

P. Breathnach · 08-12-2014 10:14am

dynamited wrote: »

...
Viewing a place for 190k on Wednesday, if i like it i will put an offer of 180k in ...

I hope things go well for you.

It's impossible to judge in advance if an offer below asking price might succeed. In some cases, the asking price is set at an optimistic level (from the seller's point of view) and you have a real chance of getting it for less. In other cases, you might need to match or exceed asking price.

It's not just you and the seller: much depends on whether or not there are other people who like the place and can fund the purchase. Ultimately, the price is made by would-be buyers.

It's not unusual to find people spending months, sometimes more than a year, viewing places and making offers on some of them before they get a deal that suits them.

P. Breathnach · 08-12-2014 10:21am

hadoken13 wrote: »

From my understanding it's not just cash sales that appear on the property price register. Is there an identifier that distinguishes cash sales on the register?

All sales should appear on the register. There is no way of identifying cash sales.

Figures are separately published showing the number of mortgages arranged. There are fewer mortgages than sales, so the difference is put down to cash sales.

[Crude summary.]

handlemaster · 08-12-2014 12:26pm

dynamited wrote: »

I've noticed they have started to drop since the CO mortgage lending rules were announced and I'm starting to get harassed by estate agents with replies in regard to enquires I made about certain properties

whereas just a few months ago I wouldn't hear a thing back from them

looks like they're getting desperate

what areas are these in ?

handlemaster · 08-12-2014 12:31pm

dynamited wrote: »

Ok Folks,

Viewing a place for 190k on Wednesday, if i like it i will put an offer of 180k in

Mortgage over 35 years will work out @ 344 per month but obviously will rise as interest rates are so slow atm

best of luck. its great to see someone actually saving and making first world sacrifices to buy and not expecting someone else to pick up the bill

dynamited · 08-12-2014 12:39pm

handlemaster wrote: »

what areas are these in ?

Lower end of the Market

Clonsilla, Lucan etc

zl1whqvjs75cdy · 08-12-2014 1:11pm

IS 35 years a long time for a mortgage? Still renting but trying to educate myself on these things to make the jump in a few years time/

dynamited · 08-12-2014 1:25pm

donkeyoaty0099 wrote: »

IS 35 years a long time for a mortgage? Still renting but trying to educate myself on these things to make the jump in a few years time/

Not sure

I'm 26 though , the repayments work out @ around 330-350 per month but i plan to save another 300e on top of that and pay it off in lump sums

I hope to have the mortgage paid off in 10-12 years and then try buy another place to rent out

deathtocaptcha · 08-12-2014 1:38pm

wait it out... there's lots of panic buying going on at the minute and people fearing they'll miss the bottom... my guess is it's a bull trap and prices will decline again...

Europe is in a poor situation in general... low to no growth, inflation well below targets... it's important not to buy in to the hype (again)... the general sentiment is overconfidence now...

It's difficult to see things turning sour overnight, but closing our corporation tax loophole could result in multinationals closely examining the increasing cost of doing business here and reduced tax incentives to stay... combined with tougher US tax laws / sanctions, it's possible any competitive edge we had will be eroded slowly...

MouseTail · 08-12-2014 2:04pm

donkeyoaty0099 wrote: »

IS 35 years a long time for a mortgage? Still renting but trying to educate myself on these things to make the jump in a few years time/

Yes, it would be the longest term available, but the flexibility can work to your advantage.

handlemaster · 08-12-2014 3:59pm

As pervious poster pointed out Europes economy is still sick. Russian bullyboy antics wont help either. As regards how this affects housing !! People still need a place to live.

dynamited · 08-12-2014 6:32pm

Recession is far from over as to what i can see, so I won't get ahead of myself and just buy for the sake of it

I will wait until the right deal comes along In the right Location.

Thanks for the advice so far people !

MarkAnthony · 09-12-2014 12:00am

My prediction for what its worth (and it's pulled out of the same place most others are :P)

2014 saw Capital Gains Tax (CGT) exemptions and panic buying from pent up demand. Prices soared in % terms but from fairly low levels. The cash buyers are now dropping out of the market (they'll still be some) but they'll mainly be going for longer term (than 7 years from the CGT exemption) hassle free (ish) investments - read apartments.

2015 might see some price decreases in certain areas, D7, D8 are already seeing prices being reduced. I suspect this will continue into Q1/2 of next year eventually stabilising but increasing faster than inflation.

D10/12 will see buyers pushed out of D7/8 and I actually think prices will increase slightly there with potential knock on effects into other areas. Perhaps D11/15.

Overall I think we'll see single (but high) digit property price increases next year (9.5%) with localised bubbles popping and apartments rising a bit higher guessing 12%.

There is an awful lot of sh!t (uninhabitable) out there at the moment, I can see some of these properties taking a massive nose dive in the new year.

Robbie32 · 09-12-2014 7:10am

Hi dynamited.

I agree with you, in my opinion the recession is still here in the real world.

I am in the process of organising a wedding and the amount of suppliers that have used the phrases "in the recession days" or "now the recession is over".

I see that alot in the housing market too. Went to view a house the beginning of last week, and I didnt even get into the house. No one else there and the estate agent said, "ok I must tell you that there has been an over the asking price offer by 25k". I said ok and thanks for your time. I turned on my heels to walk away. The estate agent asked where I was going. I told him that figures that high took me out of my budget and that there was no point in looking at it.

Now the estate agent doesnt know this. But I was told about this particular house by my friend, who is friends with the estate agent. My friend told me that the house had been on the market with very little interest.
Yesterday I received yet another call from the agent asking if I would reconsider viewing the property. When I asked about the other "offer", he says that fell through.

Is this just me or is anyone else experiencing the same.

irish gent · 09-12-2014 9:28am

Double bubble collapse next year ahead on property and stoke markets will will also burst.. clock is ticking.

handlemaster · 09-12-2014 9:48am

If ecb start printing euro investors will invest more not less in bricks and morter. Gold has gone through the floor so that is a good indicater investors are seeking returns not safety. Also bond rates are very very low

GreeBo · 09-12-2014 9:57am

If you can pay 300 and still save another 300 I'd arrange ashorter term, maybe 30 or even 25. If circumstances change then you can renegotiate back up to 30 or 35, but that is easier and saves you more money than paying lump sums off a variable, assume you will have penalties for early payment.

Robbie32 · 09-12-2014 10:10am

There shouldnt be any penalty for early payment on a varible. Paying off in full might have a "fee".
Before I sold my house I was paying off lump sums, with no penalty. I managed to get my 35 year mortgage down to 20 in 5 years, by lump sums and also was lucky that the rates dropped, but i cud afford to pay the same monthly repayment.

Its always a trade off between terma nd repayment. It worked for me saving the extra during the year and paying the lump sum at the end of the year. Also gave me extra cash to pay if there was anything unexpected billwise....

tom_tarbucket · 09-12-2014 10:22am

Just wondering, on the deposit, you are putting in a 100k Deposit. Is this all your savings wiped out ?

dynamited · 09-12-2014 10:29am

tom_tarbucket wrote: »

Just wondering, on the deposit, you are putting in a 100k Deposit. Is this all your savings wiped out ?

Yes , it is life savings , 26 years old

tom_tarbucket · 09-12-2014 11:13am

dynamited wrote: »

Yes , it is life savings , 26 years old

There are 2 options here

1 ) The option you are taking of putting down all your savings and therefore reducing what you will owe the banks. As you say you will have to start saving all over again from scratch.

2 ) Put in 60% of your deposit and leave the rest for a rainy day maybe.

I don't know the ins and outs of it, but which works out better. Everything in and start saving again, or a bit in and have some savings

dynamited · 09-12-2014 11:25am

tom_tarbucket wrote: »

There are 2 options here

1 ) The option you are taking of putting down all your savings and therefore reducing what you will owe the banks. As you say you will have to start saving all over again from scratch.

2 ) Put in 60% of your deposit and leave the rest for a rainy day maybe.

I don't know the ins and outs of it, but which works out better. Everything in and start saving again, or a bit in and have some savings

Both are very good options which i have thought about and tbh i find it as more of a challenge to start saving from scratch and will motivate me more, the lower repayments should make it easier.

Whereas if i left some savings resting in an account i wouldn't be as motivated to save as much and my repayments would be higher

I think in the long term , option 1 is suited more for my lifestyle and finances

Either way, thanks for the advice

Robbie32 · 09-12-2014 12:15pm

I might be wrong, but doesnt the amount of deposit have an effect on the amount you can borrow????

09-12-2014 1:35pm

dynamited wrote: »

Not sure

I'm 26 though , the repayments work out @ around 330-350 per month but i plan to save another 300e on top of that and pay it off in lump sums

I hope to have the mortgage paid off in 10-12 years and then try buy another place to rent out

Would you not be better overpaying your mortgage at the start, i.e. Putting the extra 300 into the mortgage rather than saving it? The quicker you start reducing the capital the less interest you will pay.

MarkAnthony · 09-12-2014 1:39pm

Robbie32 wrote: »

I might be wrong, but doesnt the amount of deposit have an effect on the amount you can borrow????

Not in our experience, we've a large deposit and smaller mortgage approval like the OP. Obviously you can buy more because you're adding to it yourself but the mortgage amount, remains the mortgage amount.

Also in relation to your excellent point ref offers Robbie - yes I'm finding that I'm getting a lot less BS from EAs. The very first thing I ask is what offers are in on the property. Most are upfront but the BS detector goes off with a few and I simply say thanks, not going to view it then.

That said: There are still some high offers going in on property and a lot of stuff in Dublin is selling over asking. People are also making offers in a bid to scare off other bidders. Instead of going up 1/2K they go in at 5/10K higher hoping that they come out on top and avoid a bidding war which could see the property go higher.

There is then the fact that they may very well try and chip (gazunder (sp?)) the vendor at the last minute, especially if the new year does see prices dip.

EDIT: Sorry did mean to say a small mortgage and high deposit will result in a lower LTV thus giving a better interest rate. This might factor in to the amount being lent on the basis the repayments are lower but it's going to make very little difference, especially at the levels the OP is looking.

Robbie32 · 09-12-2014 2:16pm

Yeah its abit of a nightmare. my parents sold their house and. put in an offer over asking price for a place. The sellers wouldnt even give them an answer. After 6 weeks my parents found somewhere else and pulled out of the first place.
They put in an offer 50k over the asking price and with the previso that 8weeks was enough time for them to be in the house for christmas. So deposit paid subject to survey.

9 weeks later and they are no further as the bank are having discussions with the owners (apparently 2 brothers) about who owes what percentage of the negative equity.

This is all well and good, but now my parents wont be in for christmas and their circumsatnces have changed slightly which will probably end up with them pulling out of the sale and looking else where. I know I certainly would......

MarkAnthony · 09-12-2014 2:21pm

Robbie32 wrote: »

Yeah its abit of a nightmare. my parents sold their house and. put in an offer over asking price for a place. The sellers wouldnt even give them an answer. After 6 weeks my parents found somewhere else and pulled out of the first place.
They put in an offer 50k over the asking price and with the previso that 8weeks was enough time for them to be in the house for christmas. So deposit paid subject to survey.

9 weeks later and they are no further as the bank are having discussions with the owners (apparently 2 brothers) about who owes what percentage of the negative equity.

This is all well and good, but now my parents wont be in for christmas and their circumsatnces have changed slightly which will probably end up with them pulling out of the sale and looking else where. I know I certainly would......

TBH I haven't even got involved until the process was further along. I know that makes me a bit of a barstard swooping in at the last minutes but it's happened to me enough times.

I've been inquiring about the chain each time and haven't been going near properties where I can't get a straight answer.

Buying here (and England) is a sodding nightmare, Scottish system of binding offers is much, much better IMHO.

€100k deposit, €180k budget

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