Some important information for new homebuyers.
While the process of buying your new home is wonderfully exciting, it can often be stressful and unnecessarily complicated at the same time. To make life easier for you, we have put together some information to help you navigate the various financial aids to purchase, along with a few pointers to help you become the ideal purchaser.
Financial options to help you buy your new home
This scheme helps first time buyers purchase new homes only. It also applies to once-off self-build homes. The price limit on this scheme is €500,000.
The amount you are intitled to depends on how much Income Tax or DIRT (Deposit Interest Retention Tax) you have paid in the previous 4 years. This money is most often used to offset the larger deposit due when contracts are signed. Carroll Estates have been approved by Revenue to participate in this scheme in our current Bettystown developments.
The maximum you would be intitled to is €30,000. You can apply at any time through Revenue’s myAccount service or through Revenue’s Online Service (ROS). Once approved, it is only at the claim stage that you will need to provide documents about your mortgage and property details, so the first step can begin immediately.
This government-backed loan is open to first time buyers and certain other applicants. You can borrow up to 90% of the price of the house at a reduced interest rate, and repayments are fixed throughout the lifetime of the mortgage so there are no nasty surprises in store for you. You also have the option of buying a new or second hand property.
There are a number of qualifying criteria which you’ll need to satisfy and you can borrow up to a max of between €250,000 and €320,000, depending on the county you are buying in.
To apply for the Local Authority Home Loan, complete the application form (pdf).
The First Home Scheme (FHS) supports you to purchase your own Home when you might not otherwise be able to afford to. Up to 30% of the price of your home is paid for you, in return for a stake in the property. You can buy back that stake at any time, but you don’t have to.
You must be a First Time Buyer or ‘Fresh Start’ applicant and the Home must be a new build. There are price limits on the new build, from €250,000 up to a maximum of €500,000, again depending on what county you want to buy in. While you can get up to 30%, this is reduced to 20% if you are also availing of the Help To Buy scheme. You must have saved your deposit to qualify. There is no change for the first 5 years, but a service charge applies after that.
You can buy back the equity in your Home at any stage, but note that if the value of the house has increased, the amount you need to repay will also increase. For example, if you buy your property for €300,000 and 4 years later you want to buy back the equity when the property is valued at €350,000, your original 10% equity priced at €30,000 will now cost €35,000 to buy back.
If, at any time, the property is no longer your Primary Residence, the equity must be paid back (for example, if you decide to sell or rent out your property). You can apply here for the First Home Scheme.
How to be an optimum purchaser
We know from talking to our homebuyers that it can sometimes feel like you have no control in the world of real estate, and that you are at the mercy of banks and developers. But there are a number of important things you can do to give you greater control over your destiny, and put you in the best position to buy your first home.
Spend 6 months to a year before you want to buy setting up your bank accounts to show the bank that you are someone they want to give a mortgage to. If you’re paying rent, be sure to pay on time each month, to prove that you are responsible with money. If you’re living at home to save for a deposit, be sure to pay the same amount at the same time each month into a savings account – and don’t touch it!
Do everything you can to get some kind of deposit together. Auctioneers require anything from €5,000 to €20,000 upfront to hold a property for you. The Help to Buy Scheme can’t be used toward that, so find out the average deposit required to hold a house in the area you are looking for. And once you have, start saving right away.
Approach your bank and get your Loan in Principle. This shows that you have a bank that is willing to give you a mortgage and will also give you an idea of the price of property you will be able to afford. This demonstrates to an Auctioneer that you are a serious buyer.
Perhaps you are upgrading to a bigger property and have a house to sell?. If so, do your homework now. Engage an Auctioneer to value it for you, do any renovations to make it more appealing, have a big clear out and have a plan for where you will move to once it sells.
It is very difficult to buy and sell a property on the same day. Even if you do, and your new home is a new build, things like floors will not be down in the majority of properties, so you and your removal van will be arriving to less than optimum conditions. Ideally, get your house on the market before you approach the Auctioneer, as this puts you head and shoulders above other upgraders and gives you more control then perhaps you thought.
How exactly does the closing process happen?
In new builds, it can seem to take a long time for the closing process to actually happen. You can see the house is ready, so why are you being told you can’t get the keys? The answer is that there is a lot going on in the background that most purchasers are unaware of. See below for a simple breakdown of the steps that must be taken from the moment you are called to snag your property.
- Today:
- Week 1:
- Week 2 or 3:
- Week 3 or 4:
- Closing Day
- Source and hire a suitable qualified person to inspect your home and prepare your snag list. This person can be an architect, a surveyor or a professional snag specialist.
- Contact your lender (i.e. your bank or building society) to make sure that all paperwork is in order
- If there is a life policy, contact the life assurance company to ensure that it has not expired.
- Contact your own solicitors and advise them that the house completion is imminent. Confirm with them that the loan cheque can be requisitioned once snagging is completed and all certificates are issued. Some banks may be experiencing delays in draw down.
- Send the fee to the bank or building society for the surveyor’s final inspection, where appropriate.
- Ensure the person hired to snag the property goes to do this snag at the appointed time. Also make sure that this person will deliver the full snag list within a reasonable time (24 hours is recommended).
- The person who snagged your property (or anyone with expert knowledge) will need to go back to the property to confirm the snag. This means that they are satisfied the property is up to code and finished to a suitable level. They will be contacted directly by Carroll Estates.
- Confirm with your solicitor that the loan cheque has been drawn down.
- The funds are transferred and the paperwork is processed. You will receive confirmation from your solicitor that the deal has closed and now you can arrange to collect keys from the Site Office
