Why these first-time buyers jumped off the fence

CLAIRE HYLAND and Derick Mitchell have just taken the plunge and bought their first home: a three-bedroom terrace house in Clontarf. Both professionals, they had been renting a two-bedroom apartment in Beggars Bush, Dublin 4, within walking distance of their workplaces since June 2009.

They started househunting in September 2010, but a baby due in March helped focus their search.

So did the fact that mortgage-interest relief for first-time buyers had been due to end last December influence their decision?

“With a baby on the way, the only decision we had to make was whether or not to buy a house that we can see ourselves in for the next 20 years now – or to make a first step towards that house,” Claire explains.

“When we broke it down, we preferred to invest in a smaller house without the same mortgage pressures.”

These days househunters are far more realistic about repayments. “We were never 100 per cent confident of the mortgage application process and mindful of this, we built a savings profile.”

For the past two and a half years, they have been making monthly savings lodgements. “You adjust to the lack of income,” Claire says. “You learn to live within your means.”

In the summer of 2009, a year before they got married, they set up a joint account to pay for the wedding. After the big day they continued saving. The monies accrued included wedding gifts. “You could say our wedding guests helped pay for our house,” Claire says.

They followed every recommendation their mortgage adviser gave them to the letter. This included getting their respective CVs in order. This helps demonstrate a career path and history, Claire says.

Claire and Derick have been banking with Bank of Ireland since they were both at school. They didn’t shop around. They also got a gift from their parents.

Both are originally from Galway and wanted to live near the sea. Initially, they focused their search in Sandymount.

“People say there are loads of houses on the market, but they’re not necessarily the type of house you want to buy,” says Claire.

Most of the houses coming onto the market were executor sales and in need of work. With a mortgage of €380,000 to work with, they were not sure they would get additional money from the bank to fund any necessary refurbishment.

They broadened their search and bought in Clontarf through local agent Gallagher Quigley because of its “great sense of neighbourhood, good non-fee paying schools and great restaurants and shops”, says Claire.

“Pre-Budget, we had put our search into overdrive to try and close a deal before the end of the mortgage-interest relief, which originally had been December 2011,” Claire explains.

The extension of relief allows FTBs to avail of mortgage-interest relief until December 31st, 2017. Mortgages taken out after December 31st, 2012, will not qualify for mortgage interest relief.

“For us, there was some good news in the Budget. Over a seven-year period, the extension of the mortgage interest relief means a difference of €20,000 to us.”

Their mortgage costs 27 per cent of their combined income. “With the interest relief, our mortgage payments are 25 per centmore than our monthly rental outgoings.”