First-time buyers: top tips to help you buy your first home
Buying your first home can be an exciting but sometimes a daunting experience. Follow our top tips to avoid the pitfalls
There are a number of extra costs involved in buying a property that many first-time buyers don’t consider or factor in to the overall price of the house. Photograph: iStock
Being aware of the pitfalls at the start of the first-time buyers process means you are more likely to side-step them. Here are nine classic things to look out for when you decide you want to buy your first home.
1. TALK TO YOUR LENDER FIRST
Sometimes FTBs do things in the reverse order. They look at houses and get their hopes up in terms of what they can afford to buy, without first getting mortgage approval in principle from a lender. Then when it comes to seeking a loan, they discover they do not meet the criteria for a mortgage or find that they can borrow only a fraction of what they thought they could. Talk to a bank or lending provider at the early stages of house hunting, to gauge what it is you can borrow and what you need to do to fulfil all criteria.
[Download the Bank of Ireland First-Time Buyer’s Guide.]
2. BE REALISTIC
Having your heart set on a property you can’t afford can be heartbreaking so it’s important to be realistic about what you can afford and what is available. This can sometimes mean compromising on your dream home. There’s no point in having your heart set on an apartment in a prime part of Dublin’s docklands or in a pricey coastal neighbourhood where you grew up if it is wildly outside your price range. However, you might find something within reasonable walking distance that’s more affordable.
3. CURB YOUR SPENDING
Splurging on holidays or meals out is a no-no if you are trying to impress the banks when it comes to applying for a loan. Banks look for “clean” current and saving accounts and whilst you might tick all other boxes when it comes to the kind of criteria you need to meet in order to secure a mortgage, constant spending and dipping into savings will make a lending provider nervous.
4. CHOOSE LOCATIONS TO SUIT THE “FUTURE YOU”
Only considering what you need now and not thinking about what you might need in three to four years’ time is something to be mindful of. A two-bedroom apartment might be fine for now but if you are planning on starting or expanding your family down the line, you are probably going to require more space. If you are buying a house, is there scope to extend in the future? Not buying close to the right amenities falls under this too. Being close to bars and restaurants might seem like the ideal situation right now, but you are going to require schools, outdoor amenities and shopping facilities if you decide to start a family.
5. COUNT THE COST
There are a number of extra costs involved in buying a property that many first-time buyers don’t consider or factor in to the overall price of the house. These include home insurance, estate agents fees, legal fees, property tax and management fees. Management fees in particular can be a sizeable sum of money each month so make sure to check out what the monthly outgoings will be once the property is yours.
6. ASK THE EXPERTS
Not choosing the right type of mortgage can leave you paying above and beyond for years to come. Make sure you speak to the lending provider about the types of mortgages that are available to you. There are mobile managers who can visit you at a time that is convenient, or you can speak on the phone or make an appointment to chat to a mortgage manager in the bank.
7. TALK TO THE NEIGHBOURS
It’s important to visit an area and the property you like there multiple times. You might visit the location several times during the day, only to discover on your first night in your dream home that the area is a hub for late night anti-social behaviour. Talk to locals, shop assistants, even the postman, in order to get a general idea of what the neighbourhood is like. It’s also a good idea to look up the development plans in your area to see what’s in the planning pipeline. These are freely available at your local county council offices or online. Maybe talk to Gardai or check out crime stats in the area and see if there is a Neighbourhood Watch scheme set up in your district.
8. SET REALISTIC LIMITS
You may love the property you are bidding on but set yourself a limit of what you are going to pay and don’t stray from that. Take the time to think about what the property is really worth to you, and hold firm on that.
9. DON’T CUT CORNERS
Scrimping on a structural surveyor is something some first-time buyers do, but is a huge no-no. This is probably the most important money you will spend when buying a property, and those who skip it often live to regret it. On the face of it, your dream home might look picture perfect but get a properly qualified surveyor in and they could find damp, pyrite or even the presence of vermin. Check out other potential issues in the area; is the house built on a flood plain, are there plans to build something significant close by, leading to years of traffic disruption and noise pollution? Likewise, choose a solicitor that is well versed in conveyancing law.
Download the Bank of Ireland First-Time Buyer’s Guide.