1: It's out of your budget
Your dream home and your first home aren't always going to be the same thing. Getting on the property ladder is a major achievement in itself, and it sometimes means settling for a home that isn't your first choice. Don't waste time viewing properties that are clearly out of your budget. You don't want to fall for a home you simply can't afford.
The sooner you accept your price range the happier you will be in your property search.
2: It just has to be here
When we dream of buying our first home we tend to visualise a neighbourhood we know and love. Maybe it's somewhere we grew up. Maybe it's a locality we've always admired. If you discover that your ideal location is out of your price range, broaden your horizons.
Rather than settle for a smaller home simply to stay within an area, consider neighbouring areas that offer greater value for your money. You may find a much better property just a mile or two down the road.
3: No savings history
Mortgage repayments need to be paid on time, in full every month, which is why lenders go to such lengths to understand your financial history and income. If you've fallen into rent arrears or struggled to show you can save regularly then you'll need to take control of your finances before applying for a mortgage.
4: Forgetting about stamp duty
To qualify for your first mortgage, you will need a deposit of at least 10%. On top of this you will also need to have funds to cover the property's stamp duty. This is calculated at 1% of the selling price of a property up to €1m, and 2% on the balance above.
If you are buying a home worth €300,000, you will need to have stamp duty of €3,000 up front.
5: Taking out another loan
A good credit rating is essential when applying for a mortgage. Lenders need to know that you are financially responsible. Taking out a new loan or running up a huge credit card bill that you may not be able to clear, won't be viewed favourably when you apply for a mortgage.
6: Misunderstanding the definition of First Time Buyer
Under Central Bank rules, First Time Buyers can borrow up to 90% of the property value, and non-First Time Buyers up to 80% (although there are exceptions to this, so it's worth talking to us early about your plans).
For mortgage purposes, First Time Buyers can't have had a housing loan before – here or abroad. If you are making a joint mortgage application, both of you have to be First Time Buyers to be considered for a First Time Buyer mortgage. If you don't meet the First Time Buyers’ criteria you will need to save a larger deposit of 20% of the property's value.
For more information on getting mortgage ready and top tips, signup to get your First Time Buyer e-book today.
