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First Time Buyers

Buying your first home is one the most important financial decisions you'll ever make. A disruptive and daunting task there are 10 essential steps to make the process easier.

  1. Make contact with various mortgage advisors to see which mortgage suits you best and decide on how much you can afford to borrow.
  2. Home hunting, once you know how much you can afford to spend, decide on a home you would like to buy.
  3. Choose a solicitor, they will look after all the legal work involved in buying your home.
  4. Complete a mortgage application form and agree on how much you can borrow.
  5. Make an offer, buying a newly built home is pretty straight forward. You pay a deposit up front and the remainder when the house is complete. If the home you want to buy is second hand and your bid is accepted by the seller you will be asked to put down a booking deposit which means that you and the seller can walk away without losing money. Always check this is the case before paying a booking deposit.
  6. Property valuation, your mortgage provider will get a valuation done on the property ensuring it is worth at least the amount you hope to borrow.
  7. Finalise your mortgage application, get approval on your mortgage , but make sure there are no outstanding conditions.
  8. Exchange of contracts, once your offer has been accepted by the seller, agree a closing date for the sale through your solicitor, sign the contracts and pay the deposit.
  9. Arrange Home Insurance and Life Assurance.
  10. Make your move, on closing the deal the mortgage lender will send a cheque to your solicitor. Pick up your keys and you are the proud owner of your first home.

The money you will use to buy your first home will generally come from two origins: a mortgage and your savings. In most cases one can expect to pay a deposit of 10% of the total value of the house. Typically the mortgage will pay for the remaining 90%.

Your mortgage provider will lend you as much as you can comfortably afford to repay. They decipher how much they will allow you borrow on the basis of:

  • Salary and other income
  • Monthly outgoings
  • Job security and history
  • Other debt commitments

Check your mortgage affordability with different lenders to see how much you can borrow and what your repayments would be like.

Financial Decisions

Rate: This is the amount of interest you will be paying the lender each month for borrowing the money in your mortgage.

Fixed rate: The interest rate is fixed for a certain period of time, usually between 1 and 5 years after which you will be moved onto a new fixed rate of be offered a variable rate.

Variable rate: The interest rate is varied by the lender from time to time, meaning it can go up or down.

Tracker: This is quite similar to a variable rate only it changes coincide with the European Central Bank, so if their rate goes up, so will yours.

Term: This stands for the amount of time over which you will pay back your debt. A mortgage can last from 10 years up to 35 years. The longer the term the less you pay each month. But a longer term also means paying more interest over the duration of the loan.

Other costs to budget for

The price you agree for your property is unfortunately not the only cost of buying a home.

In addition to the deposit and your monthly mortgage:

  • Legal Fees, generally solicitors charge 1.5% of the purchase price plus search fees.
  • Valuation Survey, fees usually start at €190 plus VAT.
  • Home Insurance, Your house and its assets will probably be your most valuable item so it is vital that you insured against all risks, large or small.
  • Life Assurance or Mortgage Protection, this is important so that your mortgage will be paid off in full if you die.
  • Payment Protection Plan, in the unexpected event of illness, accident or unemployment, the repayments on your mortgage will be paid up to 12 months for each eligible claim.

Wall Estates have addressed the various elements of buying your first home and clarify them without any complication. Together WE can make it happen.