# What to do next to try & get on housing ladder in next few years?



## boogaloo (16 Apr 2009)

Age: 30

Annual gross income from employment or profession: 32,000

Type of employment: Private sector worker

In general are you: saving

Rough estimate of value of home - N/A, currently renting at 400 euro per month

Other borrowings - No other borrowings/loans

Do you pay off your full credit card balance each month? mostly, max of 200 euro of a balance if I dont pay it off in a particular month.

Savings and investments: 11,000 in savings, no investments. Adding 600 to savings each month, 500 of which I really try not to touch and 100 which is saved for short term items like car insurance, car tax etc. 

Do you have a pension scheme? No. Employer does not make any contribution so I've never really been that interested.

Do you own any investment or other property? No

Ages of children: N/A

Life insurance: No


*What specific question do you have or what issues are of concern to you? *

I've turned 30 this year and like most Irish people, would like to own my own house at some stage. I do have a partner but have kept his details seperately as we currently keep all our money seperately. My net income at the moment is around 2,300 which will drop to approx 2,100 I think after the budget changes.
Out of this I am paying rent (400), savings (600), household bills (200), Mobile (50) every month. I have a car so have petrol & car maintenance bills. 
I do not have a pension and am unsure whether I should start one now, or wait until after I have bought a house (would really hope to buy a house in the next 3 years).
My job seems stable enough but I guess no one knows. I do not have either income continuance protection or permanent health insurance.

Is my best bet to try & keep saving as much as possible for the next 2 or 3 years & then try and buy a house? Is it possible to get a mortgage to buy a site?


----------



## BoscoTalking (20 Apr 2009)

Go off to the bank websites and plug in your details and see what you could get from a bank in the wag of a mortgage. Compare it to the price of property in your area. That will answer your question better than anyone here i think.
it not too popular but i think you are doing well but will need to look at your spending, get the "do i need it? do i want it? can i get it cheaper?"mentality needs to kick in so you can save as much as you can - the more you have as a deposit the better it looks to a bank.
Also become a lot more ruthless with your CC and pay it off ontime each time.


----------



## so-crates (20 Apr 2009)

Hi boogaloo,

the first thing you need to do is define in precise financial terms what your goal is. So delete as appropriate from the following statement
Looking for <a house/an apartment> of <1/2/3/4> bedrooms in <insert area> close to <shops/schools/stations/bus stop/dart/luas/parents/sea/mountains/lakes/etc>

Then go and get an idea of the cost of this now. This will give you an idea of what deposit you would need. Decide what size deposit you wish to have accumulated, the greater the deposit, the cheaper your borrowings will be. Also look at the term you are thinking of getting a mortgage for. Don't get too bogged down in the specifics yet - what you are saving for first is to put yourself in a position to buy. So say your ideal place is somewhere around €200k. A 10% deposit will be €20k, at €500pm it will take you a year and a half to increase your savings from €11k to €20k. Assuming you don't want to wipe out your savings entirely you may want to aim to save €25k in total which will take you 2 years 4 months to reach. (Bear in mind that for the first year at least after buying you will find yourself hard pressed to save anything as you will encounter more expense to settle in). If you really want to be prudent you would also cost in things like solicitors fees, surveyors fees, etc. Start now finding out what sort of mortgage you can afford - I am assuming though you budget separately you are intending buying with your partner?

That is one goal. The other longer-term goal is a pension. Obviously the sooner you can start a pension the more you are likely to accumulate. You seem to be living well inside your budget so perhaps you may be able to find another €100pm to put into a pension - which would be tax efficient also. Trouble is by your calculation, instead of having 1050pm after regular deductions for living on (which is more than €250pw) you are now looking at €850pm for living on, a drop of more than double the €100pm I am suggesting to be diverted towards a pension. Perhaps it would be better to learn to live to that adjusted net income first before trying to take on a pension also. However, in the interim it would be worth looking into what is on offer, get a feel for how you could start and manage a pension.


----------



## BoscoTalking (21 Apr 2009)

so-crates said:


> obviously the sooner you can start a pension the more you are likely to accumulate. You seem to be living well inside your budget so perhaps you may be able to find another €100pm to put into a pension


 while i have one - because my employer pays a contribution as part of my benefits package and i match it, I don't think i would be saying do both at the same time. Get on the ladder then start worrying about a pension IMO. people definately differ on this! But if your employer is matching a contribution you make and there is a tax incentive you might not miss the few 100 a month to put into a pension for peace of mind sakes.


----------



## Mumha (22 Apr 2009)

I'm curious about one thing, you and you partner are keeping your financial affairs seperate. Are you looking to buy a house and have him move in as a tenant ? Or are you living together but you are the one wanting to buy a house, not him ? This type of thing isn't clear and I think you should sort all that out before going down the road of a house purchase. Whether or which by the time you have saved the deposit (2 years or so) the housing market should have bottomed out and you will be in a great position to buy, if you have put the suggested money away.


----------



## boogaloo (22 Apr 2009)

Thanks for all the replies.

My intention is to buy the house myself, and pay the mortgage on it myself if at all possible.  Although my boyfriend will probably end up living in the house, our plan is that he will buy another seperate investment home.  We are both first time buyers, not married, no children planned for a few years yet so we're trying to make the most of our situation and put ourselves under pressure financially while we do actually have money!

My employer does not make ANY contribution towards pension/PRSA, which is quite a disincentive in my eyes.


----------



## Guest128 (22 Apr 2009)

boogaloo said:


> Although my boyfriend will probably end up living in the house, our plan is that he will buy another separate investment home..



Is this attitude not part of the reason why house prices were crazily inflated? What if rental market doesnt return to the (crazy) levels it was previously at and your investment property is empty for half the year? 
In the current market or next few years I would wonder why this would be your plan. FYI I also dont own a house and am in a similar situation & age bracket to yourself so am just wondering why first time buyer(s) would lumber themselves with two mortgages.....?


----------



## queenlex (22 Apr 2009)

FLANDERS` said:


> Is this attitude not part of the reason why house prices were crazily inflated? What if rental market doesnt return to the (crazy) levels it was previously at and your investment property is empty for half the year?
> In the current market or next few years I would wonder why this would be your plan. FYI I also dont own a house and am in a similar situation & age bracket to yourself so am just wondering why first time buyer(s) would lumber themselves with two mortgages.....?


 
I have to say I agree totally with this post, first point being spot on that was the main reason that people are skint in this country.  And an investment property now???  Financial suicide why are people in this country dying to get themselves in so much debt???? No offence intended.  There are so many other safe investment options like regular savings of around 5 and over 7 % and even fixed term ones of 5% for a year, etc. why would you want to take such risks?  You might even want to start a family over the next few years never mind your mortgage for your first home, why would you want to take such risks, you might as well head to Las Vegas with a few grand would be less risky imo.  Again no offence intended...


----------



## boogaloo (22 Apr 2009)

well it may not even be an investment property, we would also quite like to have a little holiday home/caravan somewhere!
I guess that having seen the unbelievable hassles that some of our closest friends have gone through trying to sell a house after buying with partner/ex partner, we were trying to stay more independant.
Probably won't work though!


----------



## queenlex (22 Apr 2009)

boogaloo said:


> Thanks for all the replies.
> 
> My intention is to buy the house myself, and pay the mortgage on it myself if at all possible. Although my boyfriend will probably end up living in the house, our plan is that he will buy another seperate investment home. We are both first time buyers, not married, no children planned for a few years yet so we're trying to make the most of our situation and put ourselves under pressure financially while we do actually have money!
> 
> My employer does not make ANY contribution towards pension/PRSA, which is quite a disincentive in my eyes.


 
The only thing about this is I suppose your bf could be your lodger and you could use the rent a room scheme, but would he be happy to be called your lodger?... I doubt it, I'd say it could even cause resentment him paying towards your mortgage.  I dont think any job is safe in this country now so I would definitely think you should save as much as possible for the next few years and why wouldnt you take advantage of the tax relief on pension contributions its money you wont see otherwise in any case?  You could look into safe ones like cash funds and ask an expert about that, as far as I am aware all you could lose in that is your moneyss value dropping due to inflation which doesnt look like it will be an issue in Ireland for a while.


----------



## boogaloo (22 Apr 2009)

Ok, suppose I was to say that I was single & wanted to get on housing ladder myself - would there still be such a cry over it?  All I want to do is get my own house & I'm posting on here to try & find the best way to do it.
Its not that my boyfriend and I plan on splitting up or anything, but since I left home 12 years ago I've always been pretty independant financial wise and I'd like to keep it that way.
My reasoning is IF anything did happen between boyf & I, at least if the house was mine and and the mortgage was mine then I wouldn't be the one who would have to move out.  Makes sense to me!


----------



## Guest128 (22 Apr 2009)

boogaloo said:


> Ok, suppose I was to say that I was single & wanted to get on housing ladder myself - would there still be such a cry over it?  All I want to do is get my own house & I'm posting on here to try & find the best way to do it.
> Its not that my boyfriend and I plan on splitting up or anything, but since I left home 12 years ago I've always been pretty independant financial wise and I'd like to keep it that way.
> My reasoning is IF anything did happen between boyf & I, at least if the house was mine and and the mortgage was mine then I wouldn't be the one who would have to move out.  Makes sense to me!



If you said you were single & wanted to get on housing ladder yourself you would have gotten advice for same, which you did initially. It was you who mentioned an investment property.
I think once you mentioned the 2nd property it set a warning beacon off in some people's heads. 
As regards making sense, whether or not your BF be paying rent is the main question to this....


----------



## boogaloo (23 Apr 2009)

I guess I should have left my boyfriend and his intentions out of it, as really I want information/advice on how much of a mortgage I can get on my own.  Would the fact that I can show historically going back about 5 years that I have been able to pay out 400 (rent) + 600 (savings) + 200 (bills) + approx 250 (mobile bill, car insurance, car tax, petrol) each month have any bearing on how much of a mortgage I would now get?


----------



## niceoneted (23 Apr 2009)

No mortgage is based on income and security of job. Other loans will also be taken into consideration. You will still have to pay your bills if you buy a house.


----------



## WaterSprite (23 Apr 2009)

They will definitely take into account savings - not merely the amount of savings but your savings pattern.  The fact that you can and have saved regularly will be a tick in the "plus" box, so do keep doing that.

Other than that, posts 2 & 3 give you a lot of good info in terms of your very first question.  Plug in your details into one of the bank's calculators and then adjust for increased/decreased house price and increased/decreased deposit so that you see how that affects things.  It may be that you can only afford a €250k house in 3 years, which means you need at least €25k deposit (plus stamp duty & fees at a min).  Saving for a deposit is hard - it may mean that you have to cut back and save more for the next 3 years.  I think that a lot of people will only save what they are comfortable with while working up to a deposit, not really realising that it takes a lot of €400s to make €25k.  I'm not saying you're in this camp, but if you plug the numbers, you may see that, to get to a pot of e.g. €40k in 3 years, some more creative or aggresive saving/investing ideas are called for.


----------



## mainasia (1 May 2009)

FLANDERS` said:


> If you said you were single & wanted to get on housing ladder yourself you would have gotten advice for same, which you did initially. It was you who mentioned an investment property.
> I think once you mentioned the 2nd property it set a warning beacon off in some people's heads.
> As regards making sense, whether or not your BF be paying rent is the main question to this....


 
Oh you mean you want to make an investment for other people to benefit, because that's what you are going to do. Buying a house for investment purposes in Ireland at the present time is like donating to a charity of your choice...the bank, the renter, the tax man. OK, I re-read your posts and understand your feelings better but you can have better financial security by investing more wisely!

This is why Ireland is so fubared, most people don't even think about directly investing in businesses or stocks that would support business capital. Even solid return concepts like bonds are not well known!


----------



## KevinDub (1 May 2009)

Why would you want to invest in business and stocks? they're risky and going nowhere. You may as well invest in an ice cream van in winter.

Better buy a house which is a long term investment and will have highs and lows such as now. But long term is will bring you loads of cash.
You will also be paying off the mortgage. This is a great market for buyers to make offers. Plenty of people want to offload their houses and will take insultingly low offers.

Investment property can be rented out and will provide tax breaks if its running at a loss. 
Better to be paying off a second mortgage of 250k than having a few thousand euro in the bank collecting dust.
Property will go up again in the next up cycle and you will be laughing


----------



## so-crates (6 May 2009)

boogaloo said:


> I guess I should have left my boyfriend and his intentions out of it, as really I want information/advice on how much of a mortgage I can get on my own. Would the fact that I can show historically going back about 5 years that I have been able to pay out 400 (rent) + 600 (savings) + 200 (bills) + approx 250 (mobile bill, car insurance, car tax, petrol) each month have any bearing on how much of a mortgage I would now get?


 
Sorry - that was partially my fault. You referred to your partner and talked about separate budgeting "currently" so I read that as being something you were looking at changing. The advice and the numbers stay the same - it is a long term purchase so preparation and planning is the key - work out your objective and then how to go about achieving it. The more you have saved the less you will need to borrow but the longer it will take to achieve - so you need to find the balance point where you have a comfortably affordable mortgage but at a point in time that suits you. Start with working out how much you are likely to need to borrow based on the sort of property you are looking for. Then find out from banks what they offer. Most of their website provide calculators to give a ball park idea of what they can offer you. On the BOI website according to the calculator you could borrow up to €160k with your income, try each of them to find out - this of course is just a ball park and you'd need to engage with them more closely to find out exactly how much.

If you are considering going down the route of buying yourself and then having your boyfriend live with you I would suggest being very clear and upfront about the financial relationship, agree something with him in writing. Unlike a tenancy where he is renting from a stranger, he will be living with you and it is quite likely that you will engage in the activities all couples do with regards to decoration and maintenance so his connection to the property will be stronger. It may make things more difficult if (God forbid!) you were to break up.


----------



## Mumha (7 May 2009)

KevinDub said:


> Why would you want to invest in business and stocks? they're risky and going nowhere. You may as well invest in an ice cream van in winter.
> 
> Better buy a house which is a long term investment and will have highs and lows such as now. But long term is will bring you loads of cash.
> You will also be paying off the mortgage. This is a great market for buyers to make offers. Plenty of people want to offload their houses and will take insultingly low offers.
> ...


 
In Boogaloos case, yes she will be laughing because she doesn't have to buy house (as a home) for another couple of years and from that point house prices (as they historically have done) *should* start rising. 

However, as regards a house purchase as an investment property, it won't be so easy. There is a huge glut of such properties, and you have to buy in the right area for rental. Even then....


----------

