It's your Mortgage Day!
5 things to talk about before buying your first home
Before setting out on the exciting journey that is buying your first house, there are some things you should probably have a chat about with your other half (or think about if it’s just you!) because it’s worth taking the time to decide when is the right time to buy your first home.
Some of us are settled in a job we like and are confident the only way is up. Others know they may need to jump ship, change city and take a chance in order to capture their dream careers. One of you might even want to ‘retire’ when you start a family.
Whatever your situation, you should decide if you’re staying put or are likely to be living somewhere else shortly! If you’re heading off travelling, you might want to put off buying a house until you’re back. Or you could buy before you go and have someone else pay your mortgage while you work on your tan or your fruit-picking skills.
If you decide to buy, the bank will look for at least 2 months of payslips and generally 12 months of continuous employment with the same employer.
So, you might want to stay in that job a while longer, even if it isn’t your dream job just yet. Whatever you’re thinking, the great news is there are always options available to you.
A mortgage and a relationship have a lot in common. Both require a long-term commitment, both require constant maintenance but both are worth it in the end.
But even if you’re Brad and Angelina, never underestimate the important questions that buying your first home will bring:
Talking about this should help you focus on what you both want long term (and hopefully that’s the same thing!)
Northside or Southside, city or country, street or cul de sac, picking your location is one of the most enjoyable parts of the process, as there are a lot of options out there.
So you’ll have to organise your priorities.
Prioritising what you need over what you want will help point you in the right direction. Forget the national house average prices, you can only assess how much it will cost to buy your first home once you’ve chosen where you want to live.
You may have to review your ‘wish list’ location criteria if this area is out of your budget but at least you have a starting point for your des res.
While it is true that in most of Ireland today it has become cheaper to buy than to rent, waiting to buy can sometimes make more sense for you at a point in time.
Apart from all the reasons outlined above, renting might actually be the most flexible option at this point in your journey. Maybe you need to save more for your ideal location or the extra bedroom or you want to look for that new job now.
Don’t forget, the money you are spending on rent each month will be taken into consideration when a bank is assessing your affordability for a mortgage when you do decide to buy in the future.
There’s never a bad time to become a great saver! Along with your initial deposit, there are other costs like shagpile carpets, triple glazed windows and a TV that’s too big for the room. Now is a good time to consider what your real savings target should be.
To make it easier on yourselves, rather than simply saving what you have left at the end of the month, set up an automatic transfer into a good savings account on the date you get paid. Before long, that stockpile of cash will start to grow without you having to think about it and so will your ability to get an even bigger TV.
Then, only spend what you can after your savings and other expenses are looked after. Finally, remember to book a mortgage appointment early. Most agreements in principle last six months and you only need to have your full deposit available after you’ve made an offer on your first home.
While there is a lot to consider when purchasing your first home, this is the fun part of the process as you start to make wish lists and plan for your future. Whether you decide to buy now or later, you should start to consider what you want from your new home, start preparing your finances for the most important purchase of your life and enjoy the ride.
The articles contained in this First Time Buyers Guide are for reference purposes only and any views expressed in the articles are purely the personal views of the authors. You should not rely on any information relating to specific issues or make decisions without taking separate financial or other advise from appropriately qualified professional advisors