First Time Buyer - a few questions

I am looking to buy a property in Dublin and have a few questions as regards how much of a Mortgage I can expect based on my circumstances. I would be buying the property with my partner.

Without boring anyone can I just give some background. With overtime and bonuses my annual salary would be approx 35k, my partner is looking after her mother at present and is only working part time at the moment. She has been receiving some Social Welfare also. Next month she will be returning to full time employment and her annual salary should be approx 18-20k.

Q1 - Will the fact my partner has been working Part time hinder any Mortgage application?

Q2 - Would I be better off waiting until my partner is working full time before applying or how long would she have to be working full time before a lender would consider us? ( I have heard that for a joint mortgage both have to be working full time for at least 3 months)

Q3 - I currently have a Credit Union loan of approx 9k, will I have to declare this to a lender? I also have quite a substancial amt put away for a deposit, would I be better off dipping into this to clear my loan. Would having no loans be more favourable when applying for a mortgage or would it be better to have money to pay for the bones of a deposit?

Q4 Based on both of us working full time - what kind of Mortgage figure could I expect?

Sorry for all these questions but I'm fairly new to this game.

Q1. No, she has a valid reason for not working full time

Q2. Obviously when she's working full time her income will be higher leading to a larger mortgage. There is no time limit however she must have completed any probationary period before the mortgage can be drawndown - typically 3 to 6 months.

Q3. You must declare all loans on the application form and yes, any loan will reduce your borrowing capacity. You will need an 8% deposit (you won't qualify for 100% mortgage until your partner has a minimum 1 year employment history) so you should clear as much of the loan as you can whilst leaving some funds for the deposit.

Q4. Please post a breakdown of your basic salary, overtime and bonuses; your CU loan repayment (so I can calculate with/without loan amounts) and your ages and I will advise on your maximum.

Sarah

www.rea.ie

Thanks Sarah

My basic is 30k, with a bonus of approk 2k and overtime of approx 2k also - so a total of 34-35k pa.

My CU repayment is 220 per month. I am paying 100 p/m into an SSIA and have some saving with the CU aswell approx 1500. Would these be consideded also. My rent is 380 p/m.

Thanks again

Thanks. Assuming your partner will be on €20,000 you'd qualify for €265,000 without the loan or €225,000 with it remaining. Both are 92% mortgages so you'd be looking at property costing €288,000 or €245,000 respectively. Repayments over, say, a 35 term at 3.4% would be €1081 or €918.

Sarah

www.rea.ie

hey there sarah, is there any possibility i could post up my details regarding what amount i'd be entitled to and what the monthly peybacks would be...
it would be greatly appreciated
cheers

'course you can!

Sarah

www.rea.ie

thanks sarah,
okay.... me and my partner are on incomes of 39k and 38k approx. We have savings of approx 20k. we dont have any overheads or loans. im looking to see how much we would be entitiled to get aloan up to and what the payment would be per month over periods of 25, 30 and 35 years.

thanks a million xx

Given that you've not got quite enough savings for a 92% mortgage (if you had you'd qualify for up to €400,000) you'd need to go for a mortgage between 92-100% so, on that slightly more cautious criteria, you'd qualify for €375,000. At 3.5% (tracker - ECB + 1.25%) your repayments would be €1879 over 25 years, €1684 over 30 and €1549 over 35 years.

Sarah

www.rea.ie

thanks sarah,
we were looking at properties of around 350K. what savings would we need to be looking at to be entitled to a 92% mortage? Does all this exclude the curse that is stamp duty (which i think is 3% of the cost of the house) and if we did qualify what repayments would we be looking at over a similar 25/30 and 35 year period?
Ideally we would love to be repaying back about 1100-1300, or are we living the dream?

sorry if this is taking up much of your time...
thank you

At €350k a 92% mortgage is €322k so you'd need €28k plus €10,500 for the Stamp duty so you'd be better off borrowing 100% and using your €20k for the Stamp and furnishing, etc. Over 40 years €350,000 would cost €1355 gross and €1221 (plus mortgage protection and household insurance of, say, €80) net per month. Just about within your budget and you should have some of your €10k left over for a rainy day. (No, not Rainyday - a rainy day!)

Sarah

www.rea.ie

Hi Sarah,

is it ok if I put up some details and maybe you could tell me how much monthly payments would be etc?

I probably won't be entitled to that much as I'm looking to buy on my own.

Thanks
yogi

Of course Yogi.

Sarah

www.rea.ie

Hi Sarah,

Here are my details.
I doubt I'll be able to borrow much at all as I'll be buying on my own.

I'm earning about 30K per anum (including Overtime, etc).

I've about 23K in savings which I can use for a deposit.

I've no outstanding loans, etc.

I'm saving the maximum amount in the SSIA so I should have about 12-13K in 2007.

Thanks,
yogi

sorry to get back with you with more figures sarah, but if possible could you help me with the figure for the following?
as previuosly stated, we've got 20k in savings and a combined income of 75k approx (before tax if that is whats considered). We are looking at a property of 350k and would be looking to payback approx 1100-1400 a month. What would we be better off doing or entitled to do regarding getting a mortage? And what are the general costs of buying a house insurance, legal fees, surveyors etc...

really appreciate all your advice so far as im a total novice
Thanks

Hi Yogi,

Your max is going to be circa €175,000 on a two bed property. You would also qualify under the Shared Ownership Scheme which might suit you better at the moment - check with your local council for details.

Sarah

www.rea.ie

Hi Positive,

If you've seen a house you really need to get cracking to get a mortgage offer in place; to do this you need to gather together the following;

Proof of photo ID, proof of address, 3 months payslips, your P60's, 6 month's current account bank statements (on headed paper or stamped by your banks) and proof of your savings. You then need to visit your friendly local mortgage broker - REA has branches in Dublin, Bray, Gorey, Waterford, Newbridge and SWORDS ( ) - or your preferred bank to complete an application form. We offer a package on legal fees - a flat fee of €499 + VAT and outlays (budget around €1200 for these) or you could shop around/ask for recommendations. Stamp Duty will be 3% unless the property is new.

How old is the house you're interested in? In terms of a mortgage valuation, which is mandatory, costs around €127; you could also get a structural survey carried out which will cost around €350/€400.

Household insurance, very roughly, costs about €40-€70 per month - you'll get a more accurate quote once the house has been valued for both market and insurance purposes.

Sarah

www.rea.ie

Sarah W said:

Hi Yogi,

Your max is going to be circa €175,000 on a two bed property. You would also qualify under the Shared Ownership Scheme which might suit you better at the moment - check with your local council for details.

Sarah

www.rea.ie

Click to expand...

Thanks a mill for the reply Sarah.

Time to get a new job with some more money!

Just on last question, if I was to get my parents or a family member to go guarantor on the mortgage would that make any difference at all?

It would depend on the guarantor's own financial position - their income and their outstanding debts. It's on a case by case basis but they would need to show sufficient income to cover their commitments and living expenses with enough left over to cover your shortfall. Their property is not a factor.

Sarah

www.rea.ie

thanks sarah, as always.
any chance on a quote on the figures provided in the previous post as we've seen a house we like and we'd love to know roughly how longer we'll have to save for... or if we could go ahead and make an offer..

tahnks a million

Hi PN, €350,000 as a 100% mortgage at 3.5% over 40 years comes in at €1355 gross (€1222 net of tax relief).

Sarah

www.rea.ie