Friday 20 July 2018

Home economics: Sinead Ryan answers your property questions

 

It can be a challenge to secure a mortgage and find a house. Stock image
It can be a challenge to secure a mortgage and find a house. Stock image
Sinead Ryan

Sinead Ryan

We have saved €40,000 toward our first home thanks in part to my parents giving us a generous gift. Now that we're finally in position to go it's all got real. Is it better to find a house first and pay a holding deposit before looking for a mortgage or the other way round? Which bank is best? We're tempted by the cash-back offers which would make a huge difference when we're furnishing, but can we pay them off the loan instead? Also, we'd very much like to fix the loan so we can be certain of our outgoings.

A. You've been very lucky, but now is the challenge when it comes to securing a mortgage and finding a house!

My instinct would be to apply for the mortgage first; you may not get immediate approval and even if you do, the process can take a few months. It will also give you a sense of how much you have to go shopping with.

You might want to use a mortgage broker for this process, but you could also simply apply to your own bank first.

Compare rates available with banks on a site like bonkers.ie or consumerhelp.ie, both of which have mortgage calculators as should your own bank's website. All are anxious for business, so you're in luck.

You'll need 10pc deposit as a minimum, but €40,000 doesn't mean you'll get €400,000 as there are rules about multiple of salary which are strict.

View cash-back offers with caution. They cannot be 'taken off' the loan in advance and are a short- term gimmick; they are exactly as they say, so you'll need mortgage approval for the full amount first. If you have a variable-rate loan, you can, of course, pay them back to the bank to reduce the loan afterwards; on a fixed rate, it may breach the contract terms.

In terms of security of outgoings, a fixed rate is best; in many cases they are the same, or even lower than variable rates. Although two banks (BOI and KBC) offer a 10-year rate, I think you'd be better off with three years to bed down your early outgoings. Talk to a mortgage broker.

Q. I moved into a flat two months ago near work and the Luas. I have a really nice flatmate and we were getting along well, but one morning I was working from home and heard a scrabbling noise coming from his room and discovered, to my horror, that he keeps hamsters (or perhaps mice) in there. It has totally freaked me out and we are not allowed pets according to the lease. He just laughed and says they're harmless. I know it sounds stupid, but I'm actually considering leaving as I can't sleep; should I report him and would the landlord get rid of him? I just want them gone.

A. This is awful. As a bit of a rodent-phobic myself, I completely understand your concern.

It seems, however, that your flatmate does not. The facts are that he is in breach of the lease, so technically you could, of course, report him to the landlord and it would be up to him what action to take, if any.

I suspect most home owners would not want rodents of any kind, even 'pets', living in their property.

That said, I think you need to make your upset far clearer to your flatmate. You have done nothing wrong here.

If you feel it's too upsetting, I would write him a letter, outlining in strong terms your objections, stating it's against the lease terms, it is certainly a health and safety offence and that if he doesn't get rid of the animals you may have no option but to inform the landlord.

Give him a specific date to do this by (say seven days) and put it under his door.

The letter means you won't get emotional talking with him, and can't be laughed away. If he ignores you, I think you have no option but to follow through.

The Ryan review

Those pesky cash buyers are annoying the Central Bank of Ireland all over again.

There's no doubt the fact that 50pc of all residential property sales are 'off book' is a disturbing figure.

It skews not only the market, but the statistics reporting on the market, as many of these sales are not recorded in the figures reported to the Central Bank.

Who are these cash buyers though? Although things are on the up, most of us still feel a bit in the doldrums financially; surely there can't be that many people with pots of money to splash around?

Well, it's impossible to know for sure, obviously, but with rental yields hitting 7pc or more in good, city locations, anyone keeping bundles of cash on deposit when it's costing them money to keep it there is a goon.

Nevertheless, there is a consistent €100bn in household deposits in our banks, post offices and other state instruments.

That's a lotta dosh, so we're only seeing the decisions of those who decided to look elsewhere for a return.

Add to the mix returning expats with money saved up, down-sizers tired of heating a rambling home now the kids have gone and investors eyeing capital and rental returns, all coupled with scarce supply, and it's really easy to see why a cash buyer will trump a mortgaged punter any day of the week.

siryan@independent.ie

Indo Property

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