Buying a house in Letterkenny – 3 steps to affording your first homeSeptember 29, 2016
Buying your first home is one of the biggest steps you may ever take so it makes sense to do plenty homework in getting the finances right and knowing your budget.
Letterkenny’s available housing stock is very low and supply is currently outstripping demand by some distance. This ‘running on empty’ scenario means anyone seeking to get on the housing ladder would be best advised make sure they are one step ahead of the ever-growing competition by knowing how much it’s all going to cost.
Once you’ve established how much you can spend, it’s time to get on with all the fun of house hunting in order to find your perfect first home.
Buying a home in Letterkenny – know your mortgage limit
Knowing how much of a mortgage you can afford is the most important first step in buying a home. Firmly establishing how much you can borrow from your lender can give you a solid focus and sense of confidence when house-hunting. The Central Bank of Ireland requires that lending limits of 3.5 times income are applied by the banks before approving mortgages.
For most house hunters the all-important first port of call should be to a lender or mortgage advisor. Don’t forget to shop around to get the best the deal for you.
Buying a home in Letterkenny – deposit saving
A minimum deposit of 10% is what most lenders will ask for in relation to properties with a purchase price of €220,000 or less. For properties with a purchase price over and above that figure, lenders will seek a 20% deposit. The 100% mortgages which existed a decade ago are long gone so it is vital to have a sizeable deposit to hand.
Buying a home in Letterkenny – house buying costs
Some first time buyers have a blinkered focus meeting a vendor’s asking price only to find that they have ignored the costs of other essentials. When purchasing a home, it is important to factor in the range of ancillary costs involved at various stages of the process.
Valuation fee – A professional value assessor is required to provide your lender with an estimate of the house’s market value.
Legal fee – A solicitor is required to handle the legal aspects of your mortgage.
Stamp duty – Government Stamp Duty is calculated at 1% of the selling price of any property up to €1m.
Surveyor fee – It is important to have a qualified surveyor check the house for any issues prior to purchase.
Property tax – The amount of local property tax due is calculated on the value declared for the property in conjunction with the local property rate in force in for that particular year.
Mortgage protection – It is advised that purchasers secure mortgage protection as it will ensure repayments are made in the event of loss of employment and consequential inability to the make repayments.
Home Insurance – To cover your home in the case of any type of damage.
If you have decided to buy your first home in Letterkenny don’t hesitate to give us a call today.