Guide for First-Time Buyers
Buying your first home is a major milestone. But, for those who are starting out on their property journey, it can also seem like a daunting process with many different factors to consider. This guide aims to simplify the journey, providing you with the essential steps, tips, and legal insights to help you make informed decisions and secure your dream home.
Consider Your Finances
The first place to start when considering buying a home or property is with your finances.
Borrowing limits for mortgages are set by the Irish Central Bank and capped at a maximum of 4 times the gross income for first-time-buyers. Additionally, first-time buyers are required to have a minimum deposit of 10% before getting a mortgage. So, take the time to properly review your savings, income, expenses and any outstanding debt you might have. This should help you to determine how much you can realistically afford to spend on a home, and on monthly mortgage repayments.
It is also wise to speak to a lender and seek mortgage approval in principle before you start house hunting. This will give you a clear idea of your borrowing capacity or what you need to do to meet the criteria.
Consider The Additional Costs
When buying a house, there are a number of extra costs involved that first-time buyers may not consider, or even know about.
These include things like stamp duty, the fees charged by your conveyancing solicitor, surveyor costs, and other auxiliary fees like home and life insurance. It’s important to factor in these costs from the outset and to avoid any surprises further along the process.
Speak to a Mortgage Specialist
A mortgage specialist can provide personalised and expert advice to first-time buyers on the different mortgage options and products, including fixed-rate, variable-rate, and tracker mortgages. They can guide you through the application process and help you to choose a mortgage that aligns with your long-term plans.
Finding the Right Property
Choosing the right property involves more than just finding a house that you like.
The right property should suit your lifestyle and also fit your future plans. For example, an apartment in the city centre might be a good fit now, but may not make sense in 2-3 years time. It’s always smart to consider properties and areas based on good public transport, local shops and amenities, access to schools and healthcare, and the proximity to your work. Typically, these are the factors that most buyers look for and which can be beneficial if you ever decide to sell further down the line.
You should also think about whether you would prefer a new build, an existing home, or a renovation property. Each has its advantages and disadvantages so think carefully about what suits your needs best.
Choosing a Conveyancing Solicitor
The legal process for buying a home or property is complex and requires expert guidance.
It’s necessary to engage the services of a skilled conveyancing solicitor who can manage the process, including reviewing title, contracts, planning history, advise on legal aspects of your mortgage, manage transfer of funds, discharge stamp duty and register you as the legal owner. The right conveyancing solicitor can help you navigate the process, save time and stress and ensure your interests are protected.
Help To Buy and First Home Scheme
For first-time buyers in Ireland, government schemes like the Help to Buy (HTB) Scheme and the First Home Scheme can provide significant financial assistance.
Help to Buy Scheme
The Help to Buy Scheme helps first-time buyers to purchase a newly built home or self-build a property. And provides a tax rebate of up to 10% of the purchase price (capped at €30,000).
To qualify for Help to Buy, you must:
- Be a first-time buyer purchasing or building a new residential property.
- Live in the property as your main residence for five years.
- Have paid sufficient income tax and DIRT over the previous four years to cover the rebate amount.
Applying for the Help to Buy Scheme involves registering with Revenue’s online services and submitting an application to determine your eligibility and rebate amount.
First Home Scheme
The First Home Scheme is another initiative aimed at helping first-time buyers bridge the gap between their mortgage and the cost of a new home.
It provides a shared equity arrangement where the government contributes up to 30% of the property’s market value, reducing the amount you need to borrow.
To be eligible for the First Home Scheme:
- You must be a first-time buyer.
- The property must be a newly built home in a private development.
- You must be able to secure a mortgage from a participating lender.
The application process involves securing mortgage approval, selecting a property, and applying for the scheme through the official website. If approved, the government takes an equity stake in the property, which can be repaid or bought out over time.
