First-time buyer checklist
Buying a home for the first time is a big job, both from a cost and a psychological point of view.
In the current market, the psychological aspect continues to be significant as a number of factors continue to play havoc in the decision-making process, including property prices and employment stability.
Only time will reveal when both will settle down.
Here is much of what you need to look out for and prepare for, according to Frank Conway of Irish Mortgage Corporation:
- All lenders require at least a 10% deposit and proving that you have saved much of that money yourself is paramount if you are to have a good chance of gaining mortgage approval.
- A good savings record is key. Lenders will want to see how you manage money, save and even pay for rents.
So, if you pay a monthly rent to your landlord, forget cash and use the bank. That way, you will have a full record of paying the rent.
- Being in employment is crucial. If you are employed by temporary contract, no lender will approve your mortgage application.
Mortgage lenders are looking for those in permanent employment.
- This year is the last one to get the maximum mortgage-interest tax relief.
A first-time buyer couple can get tax relief on up to a maximum of €10,000 in interest a year. This relief is given at 25% for year one and year two.
In other words, €417 per first-time buyer couple is available for buyers in 2012.
For mortgages taken out in between January next year and December 2012, there will be a 15% rate of relief for first-time buyers.
- Mortgage rates are hugely important.
On a mortgage of €200,000, with an interest rate of 3.5% (an average standard variable rate, 30-year term), the repayment would be €898 per month.
Mortgage rates are generally expected to increase (except for those on fixed-rate loans).