TOP TIPS

First Time Buyer Commandment

Clean up your bank statements. Make sure that there are no unpaid debts or missed payments on loans and close your online betting accounts. Even if such debts are discretionary or if you place only an occasional bet, a lender may take a jaundiced view on your application if such items are seen on your statements. Make sure wages, rent etc are channeled through your bank accounts, as this is always a positive. It is very important that you are seen to save regularly through your accounts. If possible get rid of credit card debt – if for no other reason it is the most expensive form of credit you can avail of.

Forget what the lender will tell you that you can borrow – that is an upper limit but what you can really afford may well be less. You are the best judge of how to manage your finances and how far your income will extend. Identify the level of your monthly income that you can afford to spend on a mortgage and the related insurances. Only proceed if you are reasonably assured of your employment going forward. Calculate affordability on the basis of minimum levels of income and do not depend on any commissions, bonuses or overtime that may be subject to significant fluctuation.

Forget what the lender will tell you that you can borrow – that is an upper limit but what you can really afford may well be less. You are the best judge of how to manage your finances and how far your income will extend. Identify the level of your monthly income that you can afford to spend on a mortgage and the related insurances. Only proceed if you are reasonably assured of your employment going forward. Calculate affordability on the basis of minimum levels of income and do not depend on any commissions, bonuses or overtime that may be subject to significant fluctuation.

Before you commence your property search set your spending limits. This will help you to avoid the frustration of viewing and falling in love with your dream home, only to discover that, even on double your income, it is not affordable. Consult with your Independent Mortgage Advisor and establish likely level of funding so that you can house-hunt at the appropriate level.

Remember the 3 most important elements of property purchase – Location, Location & Location! Very often the property that best suits you in terms of proximity to work, schools and services will also be the most expensive. While there may be merit in choosing a cheaper property in a secondary location, do not forget ongoing costs for commuting, possibly a second car, time in transit etc. Furthermore, if there is any likelihood that you may be transferred through work or that you may wish to move at any time in the future, consider the future saleability of the property you are considering – is there a good demand for that type of property?

Never proceed without discussing the proposed purchase with your legal advisor. Get the property surveyed by an engineer and it can be invaluable to have drains and septic tanks etc surveyed for problems. Such precautions will potentially save you a lot of grief and money.

Factor in the cost of mandatory insurances such as Mortgage Protection & Fire Cover. Also consider other options such as repayment protection, which may be desireable depending on your circumstances.

When buying a mortgage be wary of special offers. Introductory offers are just that – loss leaders to get you into the lenders web. Look at the overall package and judge it accordingly. Equally, while it may be convenient to buy a ready to go house with everything from TV to cutlery included, look at the real value of the property and base your decision on that. Remember the adage – there is no such a thing as a free lunch! Somewhere along the way the cost of any extras you may be offered will be factored into the price you pay.

Never be forced into either purchasing a property or taking a mortgage. Almost unknown to you expert sales people can coerce you into rushing decisions and buyers often feel almost obliged to proceed, without being 100% happy to do so. Relax, and do not proceed until you are totally happy to do so.

There is no such thing as a stupid question. If you have any question at all call Liam McGuire Financial Services on 064 663 2255 and we will be delighted to set you straight.