Mortgages for dummies..please help!

S

Siobh

Registered User
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15
Hi guys,

I am a complete newbie and really dont have a great understanding of mortgages, interest rates etc etc...but im trying to learn before I commit to anything.

Could someone please answer a question or 2-even if the answer is very obvious, its not to me!!

I have savings of €25,000. have been to see a few banks and have been told I will be able to get a 92% mortgage. The house I want to buy is €280,000 so they have said the will give me 257,000 and I will need a deposit of 23,000. All fine so far!
My question is.... I need to give the builder a €5,000 booking deposit and then 10% of the price. Where is this money supposed to come from??
Surely if I use my savings to pay it then I wont have my deposit for the mortgage but I dont have any other money to use to pay the builders!!

Apologies if this is a silly question but I cant get my head around it!

thanks for your time.
S
 
The deposit (usually 10%) is part of the 100% so the bank would give you the remainder (not 92% of the remainder). Where you need 92% mortgage, some vendors will accept 8% deposit, rather than 10%, but that would be up to them.
 
It sounds like you are trying to purchase the house on a very tight budget.

8% deposit (if they accept it) 22,400
92% mortgage 257,600

You will also need to pay your legal fees and outlays, plus your survey fee, snagging, etc. out of the approximately 2,600 you will have left. It will be very tight, if indeed it is possible at all.

Forget about 5,000 plus 10% as a deposit, offer 8% in total - it seems like you can't afford any more than that.
 
You should be fine.

Most builders/ sellers ask for a 10% deposit, and most banks offer 92% mortgages. Most sellers are so desperate to sell they will have no problem accepting an 8% deposit, makes no difference to them in the end as they still get 100% at the end. You will need to get your solicitor to put it in writing that you are only willing to pay an 8% deposit (but that you will work fast, so they will get the full amount really soon afterwards). This is what I did and had no problems with it.

With regard to the €5k booking fee, this will be deducted from the €23k deposit, so that when you do pay the 8% deposit you have agreed, you are actually only paying €28k. Does that make sense?

Your questions aren't stupid. I had all the same ones six months ago!!

Don't mind people who say it's not possible, if you want it, it will be!! While it will be tight, you'll make the legal fees and survey! just don't expect to be able to afford luxury furniture when you move in. I had no money left after my deposit and I did it...here's how...

Ask your bank for a 3 month moratorium (or deferred payment option). Most of them do it but you have to ask. This is when you don't start making repayments til 3 months after you've moved in. That way you pay all your legal bills, etc off your salary this month, and then just be prepared to live off your credit card. You'll have it all sorted (and a few bits of furniture) by the time your first mortgage repayment is taken. Happy Days :)
 
thank you everyone for your replies.
Starting to get my head around the whole thing!
Thanks for such a positive reply loukkcat, everyone seems to be a bit negative about the whole mortgage thing and while I am most definitely not living in the clouds and think it will all be plain sailing I actually think its quite exciting. Im about to buy my first home!!! I feel a bit silly sometimes with all my questions so ur reply was appreciated! :)

Mathepac thank you for your reply but Im not on as tight a budget as I may have sounded in my initial post, just using those figures to get my head around the whole thing so I know exactly where Im going with it. I think it would be wrong to enter into something so huge without a full understanding of it.

Right, back to more studying for me! :) thanks again everyone!
 
Best of luck siobh, just make sure your funds cover all the essentials of deposits , surveys, legal, shop around for your life assurance , home insurance, payment protection.

Then just prioritise stuff like floors , blinds , a bed and a sofa - and go from there !!!

Happy shopping !
 
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