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Introduction
Although it may seem daunting, buying your first home need not be too stressful. Remember you only have one chance at buying your first home so if you have any queries at any stage just call us on 01-6440060 or drop into our office to speak to one of our mortgage advisors. The following step by step guide will help you in purchasing your new home.
Before you begin you need to make sure that you qualify as a First-time Buyer. A First-Time-Buyer is someone who has not previously bought or built a house in Ireland or abroad and where the property is lived in by the purchaser as his/her main residence. In addition, the purchaser must not derive rent from the property for five years following the date of purchase, in exception of the Rent-A-Room Scheme.
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Step 1: Find out how much you can borrow
Once you have worked out with your mortgage adviser how much you can borrow you can start looking for your home. The amount you can borrow will vary from institution to institution and is influenced by your credit rating and any existing debts that you may have. You should have some amount of savings prior to making a loan application.
When successful with a mortgage application you will be given ‘approval in principle’. This is how much the lending institution is prepared to give you. You now know how much you can afford but you should take into account the costs of buying a home before you go house hunting.
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Step 2: Calculate all the costs
As well as paying the mortgage, there are other costs involved in buying a home in Ireland. These can be significant so it is important to add them up before going any further with the purchase of a house. They are as follows:
Stamp Duty:
Stamp duty is the tax payable to the government for changing the documents that specify who owns a particular property. A rate of 1% of the purchase price will apply to residential property up to €1,000,000. A higher rate of 2% will applies to the excess over €1,000,000. For further information about stamp duty including exemptions and full explanations of all rules please consult www.revenue.ie.
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Valuation Fee:
A valuer will assess the value of the property you wish to purchase to make sure that it is worth at least its asking price for mortgage purposes. A valuation can cost approximately €125 - €150.
Legal Fees:
You will need a solicitor to make sure that everything is legally in order for the house-buying process. A solicitor's charges can vary considerably, so it is worth your time to shop around to get the best possible price.
On top of your solicitor’s fee for doing all the necessary legal work, there will also be extra charges you should budget for. These include legal searches (at least €80) and registration of the title (which can be from €100 to over €850).
Building Insurance:
Building insurance will protect your home and provide you with the necessary funds to cover the costs of rebuilding or repairing your home in the event of incidents such as a fire, storm or flood. It is a requirement of your mortgage that this insurance is in place.
Mortgage Protection & Life Assurance:
Your home is probably one of the biggest investments you’ll ever make, so it is important to consider what would happen should you be unable to keep up your repayments. Mortgage protection is a statutory requirement and can pay off your mortgage in the event of death or serious illness. It can provide a lump sum for your family or your partner should you die or develop a serious illness during the term of the policy. The cost of cover depends on a number of factors such as the amount and term of your mortgage, your age and your health.
Other Consideration:
Don’t forgot to plan for the fun bits like furnishings, flooring, etc. N.B. When planning your budget it is also important to factor in possible rate increases that may come down the line.
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Step 3: Finding and viewing homes
Establish your priorities and write down the factors you think are important. Consider things such as: the size of the property, location, public transport, amenities etc.
Do a search. Properties are listed in daily newspapers, estate agents windows and on websites such as www.lisney.com, www.myhome.ie and www.daft.ie
Once you have selected a property, visit the area at different times in order to get a feel for it. Talk to locals and the local authority planning office on possible future developments such as planning permission being granted in the vicinity.
We at Lisney New Homes also have a dedicated sales team who are on hand to help you in purchasing your new home…after all this is one of the biggest decisions that you will ever make so you might as well make it with Ireland leading Estate Agents. Search for your New Home.
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Step 4: Offer made - Offer accepted!
When you have found your ideal home, and you make your offer and it is accepted, you will be required to give a booking deposit. You will need to pay a booking deposit in order to secure the property; it is usually between €2,000 and €5,000 (which is refundable if you decide not to proceed with the purchase prior to contract signing).
When this deposit is paid, the builder's solicitor forwards copies of the contract and the title document to your appointed solicitor.
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Step 5: Meeting with your solicitor and signing the contracts
Your solicitor will now invite you to sign unconditional contracts - no going back now! Don't worry, your solicitor will examine the contract and title document to make sure that everything is in order before you sign. Once the contracts are signed they are returned to the builder's solicitor. The contract is binding once your solicitor receives one part of the signed contract and the building agreement from the builder's solicitor.
Any outstanding deposit payments will also be paid at this time - usually 10% of the purchase price (including your initial deposit).
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Step 6: Property development and inspection
It may take a few months for the development to be complete so be patient. Sometimes approximate completion dates run late due to many unforeseeable factors. Be prepared for this.
The builder will send your solicitor a completion notice when the house or apartment is built. This gives you a certain time period within which the transaction must be completed, usually 14 days.
During this time you should arrange for an architect or surveyor to carry out a snag list on the property (an inspection of minor defaults). A copy of this should be handed to the foreman so that all snags can be rectified.
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Step 7: Picking up the keys
Once you are happy with the snagging then you are ready to close. The title documents are presented to your solicitor on receipt of the balance of the purchase price. The property is then transferred into your name and the keys are handed over. At this time your solicitor will also send a copy of the title documentation to your lending institution for safekeeping.
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Step 8: Move In!
Finally, the day you’ve been waiting (and saving) for is here. It's time to move into your very own home.