4 Tips For Buying A New Home
When thinking of applying for a mortgage keep the following four elements in mind:
1. Income
2. Repayment Capacity
3. Net Disposable Income
4. Balance of Funds
Income
Your mortgage application will be assessed on your income- though not on that alone- your previous loans, your spending history etc.
Bonus Tip: While some banks will consider this over time – it needs to be on a regular basis.
Repayment Capacity
The banks will assess if you will be able to repay your mortgage comfortably based on, but not limited to, the following factors:
- Regular Savings
- Rent you are currently paying
- Loan repayments
Action: Save regularly – keep these funds in a separate account where you are not tempted to dip into the account regularly.
Net Disposable Income
The money you have left over for saving and spending after you’ve paid taxes can also impact your ability to get a mortgage if you have personal loans that are paid out of this income.
Bonus tip: Consider clearing or restructuring loans in order to get the maximum mortgage available to you.
Action: Keep all bank accounts operating within their guidelines. Unpaid and irregular charges reflect badly on the account operation.
Balance of Funds
House Cost Vs House Deposit
Deposit rules require a 10% deposit for first-time buyers.
So for example, if you want to buy a new home in Kildare at €300,000, you’ll need a deposit of €30,000.
This percentage goes up to 20% for second-time and subsequent buyers.
Bonus Tip: Saving €5 a day will accumulate to €3,650 over two years. Investigate where else you can make even small savings in order to save more on a regular basis. The more you save the better the mortgage you can get.
Action: When looking at houses, take this into consideration, if you want a 300,000 house then assess your saving.
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