Amount of Savings Required by FTB

I was wondering how much money needs to be saved up by a First Time Buyer in order to buy a second hand property. I'm trying to work out exactly how much I need in savings alone before arranging for mortgage approval. My Calculations on a Second hand home costing €390,000 would be as follows:

Deposit: €39,000 (10%)
Stamp Duty: €23,400 (6%)
Legal Fees, Surveyors Fees and other costs: Around €5000 lets say

Total: €67,400

I will be buying jointly and the mortgage repayments on a mortgage of €351,000 is within our affordability range and we also have a guarantor for the loan. Unfortunately a spare €65,000 isn't exactly sitting under the bed. Is it possible to add the stamp duty to the mortgage thus increasing it to €374400 which is still affordable and significantly reducing the need for a monster amount of savings up front or do I need to sell a kidney if buying a second hand home in the that price range : )

Why not get a 100% mortgage and avoid the need for a 10% deposit?

Or, most lenders will offer 92%, so saving you 2% on your calculations.

€5,000 may be a little on the high side for the legal and survey costs, but not by much.

It is not possible to get a mortgage for more than 100% of the value (excluding stamp duty) of a property, unless BoI are offering over 100% (I heard a rumour they were a number of months ago, but I feel that this would be very rare or only rumour).

Hi ccovich,

Was having a serious case of tunnel vision there. Didn't even think of borrowing more than 90% of the purchase price to free up money for stamp duty. Just have to make nice with the bank manager now : )

Thanks a million for that.

No, the bank manager must make nice with you! You wouldn't go to the nearest car dealer and ask him would he be kind enough to sell you a car, thankyouverymuchkindsir - would you??

Sarah

www.rea.ie

True Sarah and if you were buying a car that cost the same price as a house in Dublin I'm sure the car dealer would be very accomodating to say the least : ) However if you explained to him to you wanted him to finance the purchase over 30 years and that you wanted to stretch yourself in term of affordability, he'd probably show you the door.

The reason I joked and said that we'd make nice with the bank manager is that we'll be looking for more than the banks would normally lend to 2 people with our combined salaries but we are in a lucky situation to have a good guarantor for the loan.

So your right because at the end of the day if a bank doesn't want the business then there's always another who will.

maho_ie said:

So your right because at the end of the day if a bank doesn't want the business then there's always another who will.

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Just to be aware that some, but not all, banks offer more than 92%.

Thanks ccovich. I've seen that alright.

You may not get 100% if you are asking the lender to rely on a guarantor to support the mortgage, more likely you will be restricted to 92% if you require a guarantor.