For many the prospect of buying a home for the first time can be as daunting as it is exciting. This is no surprise as it will be the biggest financial decision of their life, and this brings up plenty of questions. Below is a step-by-step guide to buying your first home.

1.Work out what you can afford yourself

The first step is to work out how much money you have to spend. This will be determined by a combination of your deposit (savings, gift, HTB grant, FHS loan) and the mortgage you can get based on your income, age, other debts and monthly outgoings. When it comes to your deposit – the money that you put down – lenders will usually ask for at least 10 per cent of the property’s value.

Having a bigger deposit as a proportion of the purchase price may mean you own more of your home outright and have less to pay back overall. It may also open you up to cheaper mortgage loan to value rates (LTV) as you are a less risky borrower, as well as reducing your chances of falling into negative equity if house prices were to fall. Loan-to-value is a measure of how much you are borrowing on a mortgage compared to a property’s value. It is dependent on the size of deposit you can put down or the equity in your home. If you a buying a new property you may qualify for HTB and or the FHS.

First Home Scheme (FHS): Visit www.firsthomescheme.ie

Help to Buy Scheme (HTB): Visit https://www.revenue.ie/en/property/help-to-buy-incentive/

2.Buyers don’t only need to save a deposit, but also fees, taxes and moving

Buying a home involves additional costs alongside your mortgage and deposit. Stamp duty: 1% of the purchase price (2% if over 1m) Legal fees for Conveyancing: 1 – 1.5% approx.

Valuation Fee: The mortgage valuation is a check carried out by the bank to assess whether the home being purchased fits within its lending criteria and represents market value. It will typically cost 150 to €180. Structural Survey: You may decide to pay for an independent survey before you exchange contracts, which can highlight if anything is wrong with the property, such as subsidence, damp or rot. These tend to cost about €500, but it is something that shouldn’t be skimped on.

3.Maintenance and furnishings

Then there are costs you will have to factor in after you purchase the property, such as home insurance, unexpected repairs such as fixing a boiler and any decorating or improvement work. You will also likely need to buy furniture and appliances which could also add up to thousands of euros.

4.Find out how much you can borrow

Once you have your deposit settled, you need to know how big a mortgage you can borrow. An easy way to establish this is by speaking with a mortgage broker. There are also certain lenders that provide higher loan amounts for certain professions. This is why it’s well worth speaking to a qualified mortgage broker who understands the market.

5.Get mortgage approval in principle

If you want to look organised and more appealing to a seller, getting what is known as an approval in principle, before you begin house hunting could stand you in good stead. Although it won’t guarantee you’ll get a mortgage it may mean a seller will take you more seriously, which could be important if you face competition for the property. You’ll need to send your broker documents including proof of ID and address dated within the last three months. They will also need your latest six months’ bank statements and payslips, as well as proof of deposit. If you are self-employed, you will typically need to send your latest two to three years of accounts etc. The full mortgage application will involve a hard credit check, an assessment of outgoings and incomings.

1.Get house hunting

Once you have worked out your budget, (Mortgage, Deposit, HTB and FHS) you can start going to viewings. This should be the fun part. Getting out and seeing properties will allow you to meet estate agents and assess the market. Putting in the hard graft on viewings will put you in a good position to assess what is good value for money and what isn’t. Don’t necessarily take the asking price to be a true reflection of value either. When you are out on viewings try to find out as much as you possibly can about the property and the seller. How long have they lived there, or is it an investment? Why are they moving? Have they found something they want to buy? All these things and more will help you decide and make an offer.

2. Make an offer

When you have found a property that fits the bill, it is time to make an offer. Don’t be afraid to offer under the asking price but understand that a seller is unlikely to accept much below it during the initial weeks of their property being on the market.

If you see a home that has been on the market for months, or that has had its asking price reduced or re-listed with another agent, then that could be ripe for negotiation. Best advice is to offer what you believe the property is worth and what you can afford, and not get carried away. Once your offer is accepted, make sure you get assurances from the estate agent that the property is now off the market and they will not be conducting any further viewings.

3.Exchanging contracts, completion and moving in

Neither you nor the seller are legally tied into the sale until contracts are exchanged, so if you want to get any surveys carried out it is a good idea to do that before this point. If an issue comes up, you can ask the seller to fix it or amend the price for example. The time it takes to go from ‘offer accepted’ to ‘collecting the keys’ to your new home will largely be in the hands of your solicitor, as the legal (conveyancing) process is usually the most time-consuming aspect of buying a home.

There are other issues that can also delay the legal process. Your seller could be buying from someone else who in turn is buying from another seller, all relying on each other to ensure they can complete on their own purchase. If any transaction in this chain of buyers and sellers is delayed or collapses, everyone in the chain is impacted.

Once the contracts are exchanged, your solicitor will set a completion date with the seller’s representatives. At the exchange of contracts, you become legally bound to buy the property. You will typically be asked to pay your deposit at this point, and you and the seller will agree a day to complete the sale. On completion day the property is yours, and you can collect the keys and move in. Congratulations

with Philip Cullen of Southeast Mortgages & Financial Services

This article aims to give information, not advice. Always do your own research and/or seek out advice from a Financial Broker before acting on anything contained in this article.