buying new house 20yrs of age....advice

J

jonbon

Guest
Hi, this is my first post and im just looking for advice.

im a 20 yr old college student who sells cars part time and dj's in 3 niteclubs also....

combined average income of around 1000 a week...


have been house hunting recently...saw a house in a lovely estate 3 bed semi...house is up for 260,000
what would be a realistic first offer??i'm also led to believe that the owner is looking to move fairly pronto.

some people are telling me im too young to be putting myself under pressure with a mortgage, surely am i not wiser to be getting on the property ladder at a young age???

how much are solicitors charging for fee's these days also!?

any advice appriciated..?
 
Assuming all your sources of income are on a self-employed basis, you'll need accounts to verify your income of €52,000, ideally for the past three years. You'll also need your accountant to verify that your tax affairs are up to date.

You'll also need a deposit of around €20,000.
 
*feeling old*

When I was 20 I never thought I'd end up where I am now. Different location, differnt wants and needs etc..

Do you really want to lumber yourself with a mortgage? The house market is going nowhere fast at the moment. Depending on who you listen to, property may (or may not - crystal ball moment) not increase in value until 2010.

Would you consider renting or saving what a mortgage would cost you for the next few years and see what happens?
 
I would say hold off. Why be in a rush to buy? A house would be a terrible investment right now. You will lose your first time buyer status. Your personal circumstances will probably change alot.

Save your money. Invest wisely. Buy the house of your dreams in a few years with a nice thick deposit. And renting is relatively cheap compared to buying a house and paying mostly interest to the bank
 
I would suggest taking the bull by the horns and as suggested above by LDFerguson do whatever it takes to get your financial affairs in order ASAP.

At a guess, your various enterprises fair play to you, are probably all cash transactions and would it be difficult to satisfy the sustainable income needs of a mortgage provider.

Do what you can right now, regularise your tax and other financial affairs and open a savings account with a bank / building society to begin to establish a savings track record, but maybe don't buy a house this year.
 
At your age adn given the current house market trends, you wouyld be better advised to save for a future purchase. If you took out a mortgage now you might end up with negative equity in five years tiome. Whereas if you sved even half your current income, you will end up having saving half the price of that house in five years!
 

Well firstly congrats on the income you are generating already as a student - one thing springs to mind though - when do you get time to study?

What will you eventual field of work be after college?

As per other posters, proving your income now could be difficult - and since the market is CURRENTLY stagnating there is no rush to buy anyway.

The downside for you of getting on the ladder so early is that after college when loads of people go off travelling or working in other countries, you are not so free needing to cover the mortgage

Again as others have said, priorities in your early adult life can change quite dramatically.

Personally i'd recommend saving for the next few years - even say at 25 with a large wedge of cash in savings and then also a defined income - i'd say then you are still way ahead of the game to be able to get a 3 bed "family house" property

If you do still want to go ahead - Re the offer price - firstly check out other prices in the area to see it it a reasonable level and then I would say go in 20% below and look to settle 10% below.

rgds
Paddy
 
Fair play to you for having such a great income at a young age.

Like the other posters above, I recommend you put off the idea of buying a home for a few years and start saving as much of that cash as possible.

If your figures are correct, you can easily save half of that per week, so by the age of 25 you have about 150k saved. You would then be in a position to buy a much nicer home, taking full advantage of your first time buyer status.
 
thanks for all the replies.
as for my tax affairs, all income is above board, of the nightclubs i work in, one has me down on the books and im paying tax, the other pays me with tax deducted already. and the 3rd is a small teenage disco which is really for a local community group so i just recieve cash in hand for that gig.

with regard to the selling cars, im employed for a main dealer in my area, all taxes are paid and everything is 100% above board.

with regard to the mortgage, my brother in law is the manager of the bank il be getting the mortgage from so i dont think i will have a problem, have given him all the necessary paperwork and have gotten a salary cert from the garage and one nightclub, i also have to collect a letter from the nightclubs accountant tomorrow to say everything is ok.

people are talking about bad market at the moment etc...hold off til later...im still a 20 year old student, surely when i go into full time employment in whatever field i choose, income shall only increase?

as for the question above regarding study.....im in the library at the moment!!! Clearly Time Management is a strength of mine! my field after college will be marketing.

i think that it wont be tying me down too much, im still going to the states for the month of august, the mortgage will be covered no problem, just budget correctly!

if i decide to go off travelling in future, i dont see why i cant rent the property?
 
jonbon said:
thanks for all the replies.
as for my tax affairs, all income is above board.... the 3rd is a small teenage disco which is really for a local community group so i just recieve cash in hand for that gig.
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Would this still not be taxable income ?
 
3 part time jobs which currently yield 50K isn't the same as 1 full time job yielding the same amount.

Maybe your brother in law can swing something for you but a typical self employed person in the same position simply wouldn't be able to get a large mortgage at a competitve rate, if atall.

Assuming you can get the mortgage I wouldn't try to convince you against the purchase. Anyone who can earn 50K per annum whilst studying full time can make their own decisions with regards to whether it's a good or bad investment.
 
jonbon said:
people are talking about bad market at the moment etc...hold off til later...im still a 20 year old student, surely when i go into full time employment in whatever field i choose, income shall only increase?
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Yes, your income will increase, but why not wait until your income has increased & you're working fulltime before committing yourself to a mortgage? Also, you only get to be a first time buyer once. Don't waste the opportunity on buying a place that you wont be happy with in the long term.

i think that it wont be tying me down too much, im still going to the states for the month of august, the mortgage will be covered no problem, just budget correctly!
Click to expand...
That's a month's holiday. What if you decide when you're 23 that you want to go to Asia/Sth America/Australia for a year or more?

if i decide to go off travelling in future, i dont see why i cant rent the property
Click to expand...
Do your sums carefully on this. Will the rent you'd get cover the mortgage? In todays market, chances are it won't.

If I were you I'd spend a few more years saving up a bigger deposit, and skip the 'starter home' phase by buying a house that you'd be happy to spend several years in.

If you really feel you have to move out of home, or wherever you're living at the moment, just RENT somewhere. Rent might be dead money, but so is mortgage interest....
 

The fact that the bank manager is your brother in law shouldn't make any difference unless he's doing something illegal to give you the loan, in this case you might not have any problems, he surely will though.

Cheers,

DubGus
 
Howitzer said:
Maybe your brother in law can swing something for you but a typical self employed person in the same position simply wouldn't be able to get a large mortgage at a competitve rate, if atall.
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That's not true. I secured a substantial mortgage that I could easily pay as a 23 year old self employed single person just a few months ago. My previous two years income was relatively low but I'd secured an excellent deposit and was making almost double what I earned the previous two years. They took everything into account and were more then happy to have me on board.

To the OP, if everything is in place and you can secure a mortgage etc. then go for it. Chances are you'll want to stay in your first place for a few years anyway and you won't make the decision lightly. Getting your foot on the ladder is difficult no matter when it is but right now it is a buyers market. I perhaps foolishly paid over the odds for my place but I've never been happier and I love it so it was worth it and in the long run will definitely be work it.
 

appriciate that Wheels. the first real bit of positive feedback recieved!!!
 
jonbon said:
appriciate that Wheels. the first real bit of positive feedback recieved!!!
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I think that says a lot about the current feeling towards the housing market. Out of 16 posts, only one that agrees you should buy.

To be fair, a lot of the negative posts aren't purely based on the financial side of things... but more on the flexibility. For what it's worth, I tend to agree with the majority.

At 20 I would have been all but certain that I (and a very close family member who had just purchesed a property in Dublin) would still be living in Dublin for the foreseeable future.
Four years later, I'm happily living at the other end of the country (and the family member who had bought in Dublin is now living on the other side of the planet).
[They were lucky enough to sell before the downturn in the market and make a tidy profit, but far from the point. On buying, they never for a second believed they would have sold up in such a short time frame]

Things can and do change in a very short period of time.

Now, if circumstances do change you can still be in a position to service the loan and keep your investment... It's just one extra headache to consider should things change in the future.

When you finish your studies, where will you be based? Restricting yourself to certain areas (even if that area is the City Centre) might limit some excellent opportunities. On the other hand, tackling the commute from one side of Dublin to the other is something (having done it for some time) I wouldn't wish on my worst enemy. Keeping all that in mind, where would you buy?

Given that the current majority centiment is that prices will continue to fall in the short term, of course the majority of people will advise you against purchasing right now. Any number of the above points, or any of those previously mentioned, will lead them to give that advice.

But, the bottom line is, it's totally your decision.
 
A number of years ago I was self employed with an irregular, but high, income and I couldn't get any sort of mortgage. The OP has 3 part time jobs. In the current climate I would be quite surprised if a, non-related, bank manager would give the OP a big mortgage at a competitive rate. A sub prime lender may have no issues ...
 
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