Remember the hidden costs

Now that we're used to 100 per cent mortgages, the idea of borrowing the entire purchase price for a home no longer seems quite as outlandish as it might have.

Opinions differ on the morality or common sense of the loans, but the fact is that, now they're here, they're unlikely to go away.

This means that they need to be addressed in a practical manner, particularly by borrowers. To this effect, mortgage broker Tice O'Sullivan of PrimaFinance.ie has drawn up a near-definitive list of the non-mortgage costs that homebuyers face.

These are the outlays that come above and after the mortgage: the details that some buyers might choose to forget when caught up in the excitement of actually owning their own home.

Starting at the beginning, we have the booking deposit - usually €5,000 for smaller purchases. "Of course you will get this back when the sale is completed if you get a 100 per cent mortgage, but you'll still need this deposit up front," says O'Sullivan.

At the same time, the buyer should, according to the advice, get a report on the property by an engineer or surveyor. This analysis is to find all the problems that houses or apartments can hide under their carpets or wall coverings - damp, leaky pipes and poor foundations should all rear their heads if the job is done properly. The cost? About €500, says O'Sullivan.

With our total at €5,500, we come to the valuation report, which O'Sullivan reckons will cost another €150. "The valuation report is required by the banks as part of the approval process as they want to ensure that you have paid a fair price for the property," he says.

Next, is the contract deposit, which will amount to 10 per cent of the purchase price when added to the earlier booking deposit. For the average first-time property (based on Permanent TSB/ESRI figures) this brings our overall total to €28,950.

As O'Sullivan acknowledges, some 100 per cent mortgage providers (notably Bank of Ireland) will offer personal loans to cover this 10 per cent deposit. The personal loan would then be repaid when the mortgage is drawn down. He notes, however, that a buyer using this will need to give their solicitor the funds to cover interest due when the personal loan is cleared.

On solicitors, legal fees represent another big charge. Like a number of other brokers, PrimaFinance has a network of solicitors for its clients. The fees will amount to €499 plus Vat, or about €600. For the average house, this brings our total outlay close to €30,000.

After these charges, we may have stamp duty. O'Sullivan also points to land registry fees;expect to pay anything between €500 and €1,300 for the pleasure. This brings us to €31,300.

O'Sullivan says that on top of this, depending on circumstances, some buyers may face costs associated with maintenance charges in their apartment or with joining their homeowners' association.

And of course all of this will come before you even think of visiting your local furniture shop to think about how your new house could become a home. Now, 100 per cent mortgage, anyone?

umccaffrey@irish-times.ie