Do's and don'ts for first time buyers

c.p.w.g.w · 04-06-2020 8:39pm

EireinOZ wrote: »

Me and my partner are saving for a house .I am a public servant and my partner is a engineering. We are both just starting our working career . I'm on 26k and he is on 28k per year. Our rent 600 a month and our car loans are 380 a month . we save about 1500-1600 a month. What is the chance of the banks leading us more than 3.5 times of our income ? We would like to get a house for 300000. We should have our 10 percent deposit in Jan 21

What part of the country are looking at?

Febreeze · 04-06-2020 8:39pm

c.p.w.g.w wrote: »

Well older houses are probably better than anything built during the boom here

I've heard this myself. I was told to look for older, oldish houses as they tend to have a better structure to them. "New" houses are supposed to be built quicker therefor not lasting as long but quote me if I'm wrong. My parents said the same thing to me when I informed them of my plans to buy a house. They pretty much said a fixer upper might cost more but last longer. I've no idea how true that is though.

EireinOZ · 04-06-2020 8:42pm

c.p.w.g.w wrote: »

What part of the country are looking at?

We are looking to buy just outside cork city

c.p.w.g.w · 04-06-2020 8:53pm

Febreeze wrote: »

I've heard this myself. I was told to look for older, oldish houses as they tend to have a better structure to them. "New" houses are supposed to be built quicker therefor not lasting as long but quote me if I'm wrong. My parents said the same thing to me when I informed them of my plans to buy a house. They pretty much said a fixer upper might cost more but last longer. I've no idea how true that is though.

My mates parents buy a house built during the boom, been in it 7 years...started to notice issues...got an inspection...house is sinking...as are 15 others nearby too...having serious issues trying to get it fixed...

Febreeze · 04-06-2020 8:55pm

c.p.w.g.w wrote: »

My mates parents buy a house built during the boom, been in it 7 years...started to notice issues...got an inspection...house is sinking...as are 15 others nearby too...having serious issues trying to get it fixed...

Jesus that's awful. I think I would lose my mind if that was to happen to me. Spend all that time saving, happily going through the process then boom 7 years later "Your house is actually sinking". I would lose the will to live.

What are they planning to do? Is there noone they can contact about this?

Sparky85 · 04-06-2020 9:24pm

Sawyer Fancy Beaver wrote: »

Don't get a fixer upper. A homebuyers report is not a clean bill of health. Get a house built within the last decade if possible. Avoid buying the most expensive house you can get a loan for, if you can.

This is bad advice! A “fixer upper” is a genuine way to add value that should always be looked at as a positive regardless what your plans are. Adding value is never a bad thing and to out preform the market a “fixer upper” is the way to go
Get a full survey and go in with your eyes open to what needs to be done

Graham · 04-06-2020 9:32pm

Sparky85 wrote: »

A “fixer upper” is a genuine way to add value that should always be looked at as a positive regardless what your plans are. Adding value is never a bad thing and to out preform the market a “fixer upper” is the way to go

That's only true if the initial purchase price + renovation costs are less than final market value. That's far from a foregone conclusion.

Febreeze · 04-06-2020 9:41pm

Graham wrote: »

That's only true if the initial purchase price + renovation costs are less than final market value. That's far from a foregone conclusion.

My thinking too. I would get a fixer upper if the price was right pretty much.

callmehal · 04-06-2020 9:41pm

Febreeze wrote: »

From what I read through other thread on boards, it seems like they would want to see a continuous savings through the same employer without any breaks. I also read that some banks decline self employed but again, I could be completly wrong in this. From my research online and on boards, I really looks like they want to see a continuous wage with continuous savings. 6 months of a clear account, no silly buggers and basically show you can live a little too. Also learned from this thread haha.

Personally I would assume a pause in savings and change in jobs and would raise a few questions.

But correct me if I'm wrong.

Also, I didn't know you could get paid through PayPal. That's news to me. You live and learn eh.

Sorry, should have clarified. One job has been continuous, a regular paye job and full time. The second job was part time, working weekends and I suppose counted as self employed. Savings were still regular, the same amount was lodged into savings account every month and rent paid as well.

I've heard what you heard, about it being more difficult if self employment is involved. I wonder if anyone can give a difinitive answer on that?

Sparky85 · 04-06-2020 9:42pm

Graham wrote: »

That's only true if the initial purchase price + renovation costs are less than final market value. That's far from a foregone conclusion.

But it’s a generally an easy conclusion to come to with new builds, i.e. value is set with little that can be done to add value.
An older house, say 20/30/40 years old, usually on a bigger plot/bigger garden/own drive etc, brought up to modern spec will out perform similar builds nearby in valuation

Sparky85 · 04-06-2020 9:44pm

callmehal wrote: »

Sorry, should have clarified. One job has been continuous, a regular paye job and full time. The second job was part time, working weekends and I suppose counted as self employed. Savings were still regular, the same amount was lodged into savings account every month and rent paid as well.

I've heard what you heard, about it being more difficult if self employment is involved. I wonder if anyone can give a difinitive answer on that?

For Self employed banks require 3 years accounts to include the income
If you’re not relying on the income for the LTI of the mortgage it’s fine. If you used it to build up your deposit it’s fine.

Febreeze · 04-06-2020 9:44pm

callmehal wrote: »

Sorry, should have clarified. One job has been continuous, a regular paye job and full time. The second job was part time, working weekends and I suppose counted as self employed. Savings were still regular, the same amount was lodged into savings account every month and rent paid as well.

I've heard what you heard, about it being more difficult if self employment is involved. I wonder if anyone can give a difinitive answer on that?

Oh I'm sure you will be fine :-) sure you could always use your self employment savings as savings for your bits and bobs for your house. I would love to do that. I work full time myself, as does my partner and I think that does it for us haha. Fair play to you.

callmehal · 04-06-2020 9:45pm

Sparky85 wrote: »

For Self employed banks require 3 years accounts to include the income
If you’re not relying on the income for the LTI of the mortgage it’s fine. If you used it to build up your deposit it’s fine.

Yes, I've read about that but I'm asking if it was just a part time thing, for 2 months as a second job.

Sorry, just added your second line there. So if it's not included in anything other than a deposit payment it should be fine?

Graham · 04-06-2020 9:46pm

Sparky85 wrote: »

But it’s a generally an easy conclusion to come to with new builds, i.e. value is set with little that can be done to add value.
An older house, say 20/30/40 years old, usually on a bigger plot/bigger garden/own drive etc, brought up to modern spec will out perform similar builds nearby in valuation

That hasn't been the case anywhere in demand in the last few years. Too much competition for fixer uppers.

You might see an unimproved property on the market for 30k less than it's updated equivalent while needing a 70k - 100k spend.

Only enticing for those with a mortgage ceiling or those unable to estimate the costs of works required.

Sparky85 · 04-06-2020 9:47pm

callmehal wrote: »

Yes, I've read about that but I'm asking if it was just a part time thing, for 2 months as a second job.

Used to build up your deposit it’s fine as long as you’re not relying on the income to be counted in the LTI for the mortgage

callmehal · 04-06-2020 9:50pm

Febreeze wrote: »

Oh I'm sure you will be fine :-) sure you could always use your self employment savings as savings for your bits and bobs for your house. I would love to do that. I work full time myself, as does my partner and I think that does it for us haha. Fair play to you.

Thanks, yes I tried it for 2 months. Was difficult. I really only stopped because I was told that self employed payments make things very difficult.

You seem to picking up a lot of knowledge from this thread! You'll easily get a mortgage with your expetrtise!

callmehal · 04-06-2020 9:51pm

Sparky85 wrote: »

Used to build up your deposit it’s fine as long as you’re not relying on the income to be counted in the LTI for the mortgage

Ok, great thanks.

Sparky85 · 04-06-2020 9:51pm

Graham wrote: »

That hasn't been the case anywhere in demand in the last few years. Too much competition for fixer uppers.

You might see an unimproved property on the market for 30k less than it's updated equivalent while needing a 70k - 100k spend.

Only enticing for those with a mortgage ceiling or those unable to estimate the costs of works required.

I disagree because I’ve done it myself. 30k invested to bring a 40 year old house up to modern spec and out preformed every similar build house (3 bed semi) in the entire area when selling by a big margin even after taking into account the 30k investment.
FTB want houses they can walk into, unpack a bag and live. They pay a premium for it, so do cash buyers who want decent rentals as an investment

Graham · 04-06-2020 9:59pm

Sparky85 wrote: »

I disagree because I’ve done it myself.

I'm not saying it's not possible, but telling a first time buyer fixer-uppers are always a fantastic opportunity is poor advice.

Plenty of discussion (and examples) over the last few years where the fixer-upper on offer represented extraordinary poor value.

Febreeze · 04-06-2020 10:03pm

callmehal wrote: »

Thanks, yes I tried it for 2 months. Was difficult. I really only stopped because I was told that self employed payments make things very difficult.

You seem to picking up a lot of knowledge from this thread! You'll easily get a mortgage with your expetrtise!

I wish! I'll be walking into the bank, sweating and saying stupid things like "X on Boards.ie told me that I'm allowed so why aren't I allowed" or something along those lines haha.

c.p.w.g.w · 04-06-2020 10:05pm

Febreeze wrote: »

Jesus that's awful. I think I would lose my mind if that was to happen to me. Spend all that time saving, happily going through the process then boom 7 years later "Your house is actually sinking". I would lose the will to live.

What are they planning to do? Is there noone they can contact about this?

There trying to get their insurer to cover the cost, but apparently the issue is difficult and tricky to fix. Something about the foundation's not being deep enough... basically the whole estate was built on marsh land and the developer didn't spend the money on groundworks to keep their costs down and max their profits

Sparky85 · 04-06-2020 10:05pm

Graham wrote: »

I'm not saying it's not possible, but telling a first time buyer fixer-uppers are always a fantastic opportunity is poor advice.

Plenty of discussion (and examples) over the last few years where the fixer-upper on offer represented extraordinary poor value.

Which is exactly why I said get a full survey & go in with your eyes open for what needs doing

It’s not always an opportunity but purely looking at newer houses is a bad way to buy a house, particularly for FTB when circumstances change and they need to sell up & move

Febreeze · 04-06-2020 10:08pm

Graham wrote: »

I'm not saying it's not possible, but telling a first time buyer fixer-uppers are always a fantastic opportunity is poor advice.

Plenty of discussion (and examples) over the last few years where the fixer-upper on offer represented extraordinary poor value.

I will admit, I've read a couple of threads about fixer uppers and a lot of them have pointed to fixer uppers are just as good as "Newly builds" if you're getting your monies worth basically but I'm on either fence. I think it comes down to preferences as well. I agree with both yourself and the other poster and it is a case of will I won't I but sure I'll find out soon enough won't I. I'll be taking on all advice gathered and I've already annoyed my partner enough to the point where I have been banned from talking about any form of houses haha!

Cheers for the advice :-)

Febreeze · 04-06-2020 10:11pm

Sparky85 wrote: »

Which is exactly why I said get a full survey & go in with your eyes open for what needs doing

It’s not always an opportunity but purely looking at newer houses is a bad way to buy a house, particularly for FTB when circumstances change and they need to sell up & move

I am hoping the home we buy will be our first buy and won't have to feel the need down the line to move. I've viewd both older and newer properties and I still can't get my head around the differences in prices, both high and low it's mental but hey, that's the fun of it I guess.

Eyes open is definitely what I'll be taking from this. Genuinely would of been an idiot and seen a house I love and run for the hills with it but there's so much that I've learned, I've actually backed away from setting with one type of house I would love and took up to viewing all shapes and sizes.

Febreeze · 04-06-2020 10:12pm

c.p.w.g.w wrote: »

There trying to get their insurer to cover the cost, but apparently the issue is difficult and tricky to fix. Something about the foundation's not being deep enough... basically the whole estate was built on marsh land and the developer didn't spend the money on groundworks to keep their costs down and max their profits

I hope they get their houses fixed soon. I say it's a pain in the arse for them as it is.

c.p.w.g.w · 04-06-2020 10:24pm

Febreeze wrote: »

I hope they get their houses fixed soon. I say it's a pain in the arse for them as it is.

Their engineer has said that its unlikely become a real issue for another few years, but they can't sell it as an inspection will find the issue

yaboya1 · 04-06-2020 10:53pm

EireinOZ wrote: »

Me and my partner are saving for a house .I am a public servant and my partner is a engineering. We are both just starting our working career . I'm on 26k and he is on 28k per year. Our rent 600 a month and our car loans are 380 a month . we save about 1500-1600 a month. What is the chance of the banks leading us more than 3.5 times of our income ? We would like to get a house for 300000. We should have our 10 percent deposit in Jan 21

Honestly?
No chance.
You're looking for a €270k loan, which is 5 times your income. The rule is 3.5 times. The banks may make some exceptions, but I've never heard them go that high and the exceptions are usually for high earners. I think you need to lower your expectations and start looking at €200k houses.

04-06-2020 11:22pm

yaboya1 wrote: »

Honestly?
No chance.
You're looking for a €270k loan, which is 5 times your income. The rule is 3.5 times. The banks may make some exceptions, but I've never heard them go that high and the exceptions are usually for high earners. I think you need to lower your expectations and start looking at €200k houses.

They take other things into account too, a public servant has a very secure job with guaranteed yearly pay increase, most engineering disciplines will be moving into much higher salaries as their career progresses etc this sort of thing is very much part of the equation. Banks will go as far as 4.5 times which isn’t a million miles away from what they need either, save for a bit longer maybe get a gift from family etc and they would be in with a chance of getting somewhere near what they need. Prices for a 300k house now might have dropped too come next year.

JohnnyChimpo · 05-06-2020 10:51am

Malcolm Late Funeral wrote: »

Prices for a 300000k house now might have dropped too come next year.

Must be some house :pac:

mimimcmc · 05-06-2020 3:28pm

yaboya1 wrote: »

Honestly?
No chance.
You're looking for a €270k loan, which is 5 times your income. The rule is 3.5 times. The banks may make some exceptions, but I've never heard them go that high and the exceptions are usually for high earners. I think you need to lower your expectations and start looking at €200k houses.

Spoke to an AIB advisor yesterday and he said most banks aren't giving exemptions at the moment, presumably due to the virus. So I'd also doubt you would have any chance in getting that price any time soon..

yaboya1 · 05-06-2020 3:35pm

mimimcmc wrote: »

Spoke to an AIB advisor yesterday and he said most banks aren't giving exemptions at the moment, presumably due to the virus. So I'd also doubt you would have any chance in getting that price any time soon..

What price? Wouldn't need an exemption for a €200k house.

mimimcmc · 05-06-2020 3:56pm

yaboya1 wrote: »

What price? Wouldn't need an exemption for a €200k house.

Oh no, i know wouldn't need one for that price. He just said in general they're not giving them out right now (I meant to reply to the poster asking the question about the 300k house)

We're looking at max 220k really

Maz2016 · 06-06-2020 11:44am

EireinOZ wrote: »

Me and my partner are saving for a house .I am a public servant and my partner is a engineering. We are both just starting our working career . I'm on 26k and he is on 28k per year. Our rent 600 a month and our car loans are 380 a month . we save about 1500-1600 a month. What is the chance of the banks leading us more than 3.5 times of our income ? We would like to get a house for 300000. We should have our 10 percent deposit in Jan 21

If you managed to clear your car loans it’s doable through the rebuilding Ireland home loan. That’s offered through your county council. Without a car loan ye could get €271k , with car loans it’s reduced to €191k. That’s for Dublin based over 30 years , some other counties would offer lower.

http://rebuildingirelandhomeloan.ie/calculator/

BailMeOut · 06-06-2020 11:51am

May or not mentioned but if you or your spouse smoke then stop now as if you do not have 12 months as a non smoker your life protection insurance will be very expensive.

Febreeze · 06-06-2020 12:27pm

BailMeOut wrote: »

May or not mentioned but if you or your spouse smoke then stop now as if you do not have 12 months as a non smoker your life protection insurance will be very expensive.

Thankfully we quit smoking 2 years ago. Mainly because of health but the price was getting ridiculous so we just stopped. Cold turkey. We've saved loads so that's been a huge help. But thanks for that advice :-)

Jen Pigs Fly · 06-06-2020 6:38pm

2BailMeOut wrote: »

May or not mentioned but if you or your spouse smoke then stop now as if you do not have 12 months as a non smoker your life protection insurance will be very expensive.

€49 a month for a smoker on mortgage protection policy and I have a chronic illness, it’s defo doable and not crazy money really.

Maybe we got lucky, but it might be good bearing in mind not everything is black and white as your statement.

guyfawkes5 · 06-06-2020 8:00pm

Malcolm Late Funeral wrote: »

They take other things into account too, a public servant has a very secure job with guaranteed yearly pay increase, most engineering disciplines will be moving into much higher salaries as their career progresses etc this sort of thing is very much part of the equation. Banks will go as far as 4.5 times which isn’t a million miles away from what they need either, save for a bit longer maybe get a gift from family etc and they would be in with a chance of getting somewhere near what they need. Prices for a 300k house now might have dropped too come next year.

From conversations with bank advisors, most exemptions fall well below 4.5, in and around the 4 range. I was told that the archetype of the people getting the absolute maximum exemptions were high-earning couples living with the parents with next no permanent expenses.

callmehal · 08-06-2020 8:18pm

Hey everyone. Do you know do the banks ask for p60's? And is it usually for the previous 2 years? If so, would someone who was back in education and not making a huge salary during those years look poor on an application?

frw5 · 09-06-2020 11:06am

If I was saving some extra money on the side in cash, what is the best way to deposit that to the account and have it counted towards deposit?

Jen Pigs Fly · 09-06-2020 11:10am

frw5 wrote: »

If I was saving some extra money on the side in cash, what is the best way to deposit that to the account and have it counted towards deposit?

My broker advised standing order. But if it’s cash, then maybe try put in the exact same amount at the same date and if you can label it like savings or something.
Banks may ask where the cash came from, so be prepared for that, they love paper trails!

frw5 · 09-06-2020 11:16am

Jen Pigs Fly wrote: »

My broker advised standing order. But if it’s cash, then maybe try put in the exact same amount at the same date and if you can label it like savings or something.
Banks may ask where the cash came from, so be prepared for that, they love paper trails!

So I've got couple of k saved in cash, always had the idea its good to have some money in cash + normal bank acc savings, so basically split it in ie 3 payments due it on 10th of July, August, September ie.

09-06-2020 11:59am

1. Go to a mortgage broker

That's pretty much it. They'll do everything else.

Jen Pigs Fly · 09-06-2020 12:32pm

frw5 wrote: »

So I've got couple of k saved in cash, always had the idea its good to have some money in cash + normal bank acc savings, so basically split it in ie 3 payments due it on 10th of July, August, September ie.

To be honest, when it comes to cash I’d seek out a broker, I went for an independent one, not the one the estate agent recommended (too much interest in the sellers favour). They would be able to help when it comes to cash savings + bank savings.
You will need to lodge all your savings into the bank anyway as the solicitor EFT transfers your deposit over to the vendors solicitor.

Some banks also want proof of funds, and I don’t know if a picture of a wad of cash is what they mean!

09-06-2020 2:12pm

frw5 wrote: »

So I've got couple of k saved in cash, always had the idea its good to have some money in cash + normal bank acc savings, so basically split it in ie 3 payments due it on 10th of July, August, September ie.

Save a much higher amount than normal from your salary for a few months and spend the cash. If asked just say you had a lean few months to save a bit extra before buying.

yourdeadwright · 09-06-2020 2:19pm

frw5 wrote: »

So I've got couple of k saved in cash, always had the idea its good to have some money in cash + normal bank acc savings, so basically split it in ie 3 payments due it on 10th of July, August, September ie.

I think you need a different thread on how to money laundering

:D

Just don't touch any money from your account for the next three months and use the cash you have saved for living,

c.p.w.g.w · 09-06-2020 2:31pm

Jen Pigs Fly wrote: »

My broker advised standing order. But if it’s cash, then maybe try put in the exact same amount at the same date and if you can label it like savings or something.
Banks may ask where the cash came from, so be prepared for that, they love paper trails!

Just tell them you sold a push bike you had no use off...Did a cash job a few months back, went to lodge it got all sorts of questions. Mind it was €1200

c.p.w.g.w · 09-06-2020 2:33pm

yourdeadwright wrote: »

I think you need a different thread on how to money laundering :D

Just don't touch any money from your account for the next three months and use the cash you have saved for living,

That looks worse tho

Graham · 09-06-2020 2:38pm

yourdeadwright wrote: »

I think you need a different thread on how to money laundering :D

There's probably a forum for that somewhere.

Mod Note

This isn't it. :mad:

yourdeadwright · 09-06-2020 2:44pm

c.p.w.g.w wrote: »

That looks worse tho

Could you just say your been extra careful with your money and saving more coming up to applying , How is that worse than lodging a few grand and saying its money you took up out and kept,

If it really is money he took out ( no reason to not believe him ) he can just point to the cash withdrawals on his statement , If its not money he took out they will look for the cash withdrawals on his statement for him to prove it is ,

Could always say its gift from mam and dad

GarIT · 09-06-2020 2:50pm

mimimcmc wrote: »

Spoke to an AIB advisor yesterday and he said most banks aren't giving exemptions at the moment, presumably due to the virus. So I'd also doubt you would have any chance in getting that price any time soon..

The banks majorly F'ed up with exemptions.

The number of exemptions they can give depends on the number of customers they have. A lot of banks used all the exemptions they expected to have for the whole year in Janruary and are now finding they had less customers than expected. I won't put any hope in getting an exemption this year, the banks might already be fined for giving out too many.

Do's and don'ts for first time buyers

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