So they say it’s rude to talk about money, but when it comes to buying a house there’s no avoiding it. It’s literally all you will think about when you first decided to join ‘The First Time Buyer’s Club’. How much can I borrow? How much should I save? How much will I get away with saving? How much will I need? And the list goes on…
Quite honestly, there’s been a load of things that I had no idea about and lots of little extras that will eat away at your savings and before you know it, you’ll be like..
So first off; savings. If I could give my 20 year old self some advice it would be to open an account and chuck €50, €20, even €5 in whenever I could. Honestly it’s the best thing anyone can do – I of course did not do this, so I’ll carry on.
Open an account in the Credit Union or Post Office, somewhere where you can’t get to it when you’re drunk on a Friday night and someone suggests an impromptu holiday booking. I chose the Credit Union and now with everything online it’s easy peasy. ‘Well that all sounds very obvious’ I hear you say – yes it is, so get up off your arse today and open an account. Simples.
Decide if there’s stuff you can do without – all those coffees at €3 a pop, that tenth pair of Top Shop jeans (but they’re not the same, these have frayed ankles!!!). Do you actually go to the gym you pay €50 a month for. Really? And holidays…this was the biggest thing I sacrificed. I was a well seasoned traveller doing big €2-3k holidays a year – Nepal, Thailand, US road trips, all put on hold for the years I was saving hard – well places aren’t going anywhere, it can wait. World; I’ll see you soon.
Decide what you can save every month, and just stick to it. If you don’t, you won’t get there, so it’s entirely up to you how long you want to save for – harsh but true! If you’ve any cash left in your current account at the end of the month, lash that in to your savings too. It all adds up.
So what are you saving for? Well theres..
The Stamp Duty
….and some other stuff you wont have thought about.
So this is the biggest piece of the pie, and how much you’ll need in the end all depends on the price of the house you eventually buy.
Thanks be to the lord baby Jesus, last year the Central Bank changed the rules for first time buyers and now you need just 10% of the property’s value as a deposit – after the crash it was hefty 20% for a portion, and let’s face it, a pretty impossible mountain to climb.
So in a nutshell, if your new gaff is worth €300k, you’ll need to shell out €30,000 for the deposit and you’ll borrow €270,000 from the bank. Got it? Great. I’ll talk about what the bank actually needs to give you a mortgage again, cause that’s another story!
The Stamp Duty
I could explain what stamp duty is, but do you really care? Here’s a link for the nerds but for everyone else it’s basically 1% of the value of the property. On our €300k house, that’s €3,000. If your maths are really dire here’s a calculator! Oh and the 1% only applies to properties under €1m, above that it’s 2% on the balance – if that’s you, I’ll ask you to quietly leave #moneybags
Ok so where are we on our €300,000 gaff:
Deposit – €30,000
Stamp duty – €3,000
Ok let’s move on.
You’ll need a solicitor, there’s no getting around that and they’re not cheap. My advice is go with a recommendation from your broker (I’ll get to this part) or bank.
My solicitor fees are €1,300 + VAT so €1,600 and usually you don’t pay this until the end of the process when everything is signed and sealed.
So we’re probably getting a bit ahead of ourselves as this it only comes into play when you’ve found your dream home and shit gets real. But for the purpose of totting up the cash it’s something you’ll need to have in your savings.
I paid €150 inc. VAT for the bank’s valuation of my house.
Well this bit I’ll cover in depth in a separate post, as this is the part I was totally oblivious to and caused me the most hassle in the process, but again let’s stick it on the list for now.
I paid €400 for the structural survey costs.
So right now we’re at €35,150 and counting (there’s more to come)…so I’ll leave you
to mull over that for while. In the meantime this..