FTB - where do I start?

[prince2008]

Hi All

I've been reading all the previous threads about mortgages and first time buyers etc.

Basically, after years of renting, I'm hoping to buy a house maybe in the next 6 months to a year. Maybe sooner, if I see something I like that I can afford!

I was thinking of going to speak to a broker in order to get the ball rolling - hopefully then we can get approval in principal so it would be safe enough to put a deposit down if something comes up. Both myself and my partner are FTB's with a combined salary of approx €74K pa. I've read all the pro's and con's of going to a broker but I really don't have the time to take off work in order to visit all the lenders seperately so I was thinking a broker would be the best bet.

Was just wondering if I go to speak to a broker etc etc, in the mean time could I ring around the banks myself (if I get the time!)? Will the banks know that I have maybe already applied through a broker? Would this go against my application?

Even though I have been reading up on mortages, all the different rates/types of mortages etc etc is all a bit confusing - this is why I was thinking a broker would be the best option.

We have joint savings of abt €40K and was hoping to purchase a property for under €300K.

Many thanks for any advice.

 

[foxylady]

Hi All

I've been reading all the previous threads about mortgages and first time buyers etc.

Basically, after years of renting, I'm hoping to buy a house maybe in the next 6 months to a year. Maybe sooner, if I see something I like that I can afford!

I was thinking of going to speak to a broker in order to get the ball rolling - hopefully then we can get approval in principal so it would be safe enough to put a deposit down if something comes up. Both myself and my partner are FTB's with a combined salary of approx €74K pa. I've read all the pro's and con's of going to a broker but I really don't have the time to take off work in order to visit all the lenders seperately so I was thinking a broker would be the best bet.

Was just wondering if I go to speak to a broker etc etc, in the mean time could I ring around the banks myself (if I get the time!)? Will the banks know that I have maybe already applied through a broker? Would this go against my application?

Even though I have been reading up on mortages, all the different rates/types of mortages etc etc is all a bit confusing - this is why I was thinking a broker would be the best option.

We have joint savings of abt €40K and was hoping to purchase a property for under €300K.

Many thanks for any advice.

If your in Dublin which just looking at property price u quoted u are probably not you could apply for affordable houseing [broken link removed] although I assume they have it in other parts of country as well. I think they sometimes sort out the finances as well but am not 100 per cent sure. Also from my experience also ftb I went to rea and found them very helpful.
I had gone to some banks but you have to keep filling out the same forms and have all the same paperwork for every bank you go to, at least with the broker you only have to do it once.

 

[prince2008]

Hiya

I'm not based in dublin so €300K for a property is realistic - I'm not looking for a mansion (unless I win the lotto at the weekend!)

Have very briefly looked into AH but I think, based on our salaries, we would not qualify.

Also, just another question, if we saw a house that we liked, say for €275K, how much below the asking price do people put in an offer for? Would i depend on how long the house is on the market etc????

 

[teachai]

Sort your morgage out first. You're in a much stronger position.

I used a crowd called ezhome (ezhome.ie) which will do all the work for you, sourcing different morgages, etc. and found them to be excellent.

Word of warning though: Don't sign any thing, or hand over any deposit, until you have your life insurance cover in place. I know someone who lost their deposit because of the delays in getting life insurance.

You still have to hand a booking deposit to estate agent though, but this is refundable.

 

[prince2008]

Thanks for the replies.

I have spoken to 2 mortgage brokers on the phone just to ask a few questions - one of them was trying to get me a apply for a much bigger mortgage than I wanted - saying he could get me x amount, no problem. He was more of a sales man - obviously just out for more commission!!! Won't be going with them!!!

Everyone has advised that I obtain approval in principle before I look at houses. However, with most lenders, this only lasts about 3 months - max 6 - if we dont take up their offer in this time frame we will have to start the process again. Unfortunately, I don't know when I'm going to see a house I like at the right price so it may take longer than this. Does anybody have any experience of applying again for approval in principle? Would the banks dislike this and think I was just wasting their time????

Also, does anybody have any opinions on taking out a mortgage over a 35 year period which will bring one of the applicants up to the age of 70 - some lenders are willing to do this. Is this a bad idea considering most people would be retired by then???

Thanks

 

[Dreamerb]

Everyone has advised that I obtain approval in principle before I look at houses. However, with most lenders, this only lasts about 3 months - max 6 - if we dont take up their offer in this time frame we will have to start the process again. Unfortunately, I don't know when I'm going to see a house I like at the right price so it may take longer than this. Does anybody have any experience of applying again for approval in principle? Would the banks dislike this and think I was just wasting their time????

The banks won't think you're wasting their time, but if you don't have approval ready, vendors might. A lot of sale agreeds have fallen through in the last while because purchasers haven't been able to secure funds, so you'll find it very difficult to get an offer accepted without approval. In your position, I'd get that sorted as soon as I was starting seriously looking.

Also, does anybody have any opinions on taking out a mortgage over a 35 year period which will bring one of the applicants up to the age of 70 - some lenders are willing to do this. Is this a bad idea considering most people would be retired by then???

It's not necessarily a bad idea, because having the longer term available can give you greater flexibility at expensive times (initial furnishings, or weddings, or babies, or illness); in my opinion it *is* a bad idea to operate on the basis that you *won't* pay it off until then. It can be useful to take the longer term, to overpay when your income allows, and reduce to the basic payment when you're facing into higher expenses.

However, your mortgage life assurance will cost more (running into high hundreds at the least, and maybe several thousand, over the term of the mortgage), and it's up to you to decide if the flexibility is worth it to you. You might also get a less favourable rate. Personally, I wouldn't take on a mortgage unless I could afford it comfortably with a term of no greater than 30 years, but it's down to how risk averse you - and the bank! - feel.

 

[prince2008]

Thanks Dreamerb

I was going to start the process for approval in principle next week - the brokers I have spoken to say that this only takes a couple of working days so I can start looking seriously at houses as soon as that is approved.

With regard to getting the 35 year mortgage - obviously I would be hoping that I would have it paid off sooner on the basis that trying to pay the mortgage when we are both retired may prove a tad difficult. I was just advised to take out the mortgage over the longest time - so that the repayments would be lower in the first couple of years so we would have some funds to do up the house. I was told then that if we had some spare money then we can just pay it off the mortgage ad hoc - is this right???

 

[Petal]

Prince2008, when we started looking for a house I applied to every single bank I could think off and in the end went with a broker (REA that was) because they had a special offer for reduced legal fees. The broker didn't offer me anything different then from what I had established myself in terms of products, so it was just convenience in the end. The girl I dealt with was fantastic - she was reommended to me on this site
The one thing I advise you to do is to start gathering all the documents you need, I can't exactly remember but you need a number of bank statements, salary slips, P60s, a salary certificate, garda stamped passport copies, etc and all that takes a while to organise. It's also a good idea to apply for life insurance, that can take some time, too. I think once you've got approval in principal and all your documents are together, getting renewed approval won't take long at all. And never mind the 35 years, I took one of those, too, and I have no intentions to still be paying at the age of 70!

 

[Dreamerb]

With regard to getting the 35 year mortgage - obviously I would be hoping that I would have it paid off sooner on the basis that trying to pay the mortgage when we are both retired may prove a tad difficult. I was just advised to take out the mortgage over the longest time - so that the repayments would be lower in the first couple of years so we would have some funds to do up the house. I was told then that if we had some spare money then we can just pay it off the mortgage ad hoc - is this right???

You need to be careful about that one. If you're on a fixed rate, it's not always possible to overpay on an ad hoc basis (although some fixed rate mortgages do provide slightly greater flexibility). Even some variable or tracker rate products may have limits on when, how or how much you may overpay, though these usually aren't too confining.

Basically, going for the 35 year term isn't a terrible idea, but you'd have to check the numbers fairly carefully to be sure it's a good idea. The difference in the repayments for a 30 and a 35 year mortgage can be surprisingly small, and is partially offset by the higher life assurance premium. You may do better simply by shopping around for the best rate for your circumstances.

My own suggestion would be to look for a mortgage which will give you a lower fixed-rate new business special offer for one to two years, going to a tracker rate after that - just so long as you make sure to review the rate and products available coming off the fixed rate. That'll give you the certainty as to your outgoings for the more expensive initial period, and the new-business offers can be very attractive.

Best of luck!

... one final thing: it may be worth playing around with Karl Jeacle's mortgage calculator at http://www.jeacle.ie/mortgage/ to have a look at the total costs of your various options. Don't forget to cost the life assurance...