Personal finance column – On The Money
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On The Money gets personal with finance, providing authoritative, expert advice on a host of financial topics that affect your readers.
Our popular personal finance column has returned for another run…
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Sample column >> Filed every Thursday afternoon
Ten steps on the property ladder
1. Decide on your budget – Work on what kind of mortgage you can repay based on your current income and expenditure and any loans you already have. Be realistic about your living costs and plan to have enough money left for unexpected eventualities like illness or car repairs.
2. Find a lender – It makes sense to see how much you can borrow before you begin shopping around for homes. Remember, the Central Bank authorises banks, building societies and credit unions. You shouldonly borrow from an authorised financial service provider. This protects you and your money from unscrupulous lenders. If you are unsure if the company that you are dealing with is authorised contact the Central Bank to find out.
3. Look for loan approval –Arrange a meeting with your credit institution to assess how much you can borrow based on your current income. You may need to provide evidence of income such as payslips, bank statements or a P60. Your bank should then offer a loan approval in principle, based on your income, your credit record, your employment record, other borrowings, etc. This approval in principle may save you a lot of time later on. Note, you will normally need a deposit of around 10% of the value of the home you want to buy.
4. Get in touch with a solicitor – You will need a solicitor to guide you through the home-buying process so look around early for a suitable candidate. Get recommendations from friends or family and shop around for a good price. Your solicitor should be experienced in home conveyance and be used to dealing with banks and estate agents on clients’ behalf. Factor in legal costs into your budgeting. Remember, you may also have to pay stamp duty and valuation fees.
5. Look for a house – Check estate agents, newspapers, auction listings and property search engines like daft.ie or myhome.ie. When you have found a property you like, make an offer.
6. Finalise your mortgage application – Now you can arrange an appointment with your lender to process your loan application. You will have to supply an independent valuation of the property. Your lender may organise this but you may have to cover the valuer’s fee. If the property is a new-build, you will have to supply an engineer’s report to validate that the home has been built to specification and safety standards.
7. If you can’t get mortgage approval – If you are not eligible for a mortgage from a financial institution, remember to try your local authority. You may be eligible for a loan under certain conditions.
8. Finalise the contracts – When you have loan approval, your solicitor will provide your offer to the seller’s solicitor and arrange for contracts to be drawn up.
9. Organise insurances – Your loan offer will be subject to certain insurances being put in place. You will need buildings insurance to cover the replacement cost of rebuilding your prospective home if it is destroyed by fire or other damage. And you must have life assurance, which will repay the mortgage in the event of your death. These insurances must be in place before your mortgage funds are transferred.
10. Sign your contract – Once your mortgage and insurances are in place, your solicitor will arrange a contract for you to sign. Once you’ve signed on the dotted line and the funds are transferred to the seller you can collect your keys and the house is all yours.
