Buying a house in the country
Moving out of a small Dublin apartment to a spacious house outside of the city is a situation we see often. If you are working in Dublin and want to but a semi-detached house in the suburbs (Naas, Celbridge, Bray etc.) then things are usually straightforward.
But I probably get five calls a week from someone that wants to move out of the city and fix up a cottage in the countryside. Yet very few people follow through and do it. The prices are usually incredibly low compared to prices in the city and suburbs, but it is by no means an easy thing to do.
There are 3 main reasons these types of case fall down:
Distance from work
This is one of the lesser known problems but can be a huge problem and can potentially kill a case.
“How far is your new home from your current home and your current job?”
If you try and buy a property that requires you to make a 2-hour commute to work every day, lenders are going to have a lot of questions. If you have never done a commute like this in the past then there is no reason to think that you are capable of pulling off this commute for the next 20 or 30 years.
If you work remotely or travel for work regularly this can be taken into account but a letter will be required form your employer stating the same.
Buying a fixer upper
Lenders will not offer you on a mortgage that is considered uninhabitable. Banks send an independent valuer to the property so they will know if the house is habitable or not.
If the house is missing windows, has no electricity or has structural issues the repairs need to be carried out to get the house up to code. You will need to get quotes from qualified professional and a value will assess whether the quotes are realistic.
So, if you are buying a house for €100,000 and it need €50,000 worth of repairs then you need to show the lender that you can pay €150,000. You will need a minimum deposit of €15,000 instead of €10,000.
These types of cases are often viewed like self-build mortgages, they take a lot of time to complete and not all lenders will even consider mortgages for a “work in progress”. You are really better off talking to a professional in this case.
Distance from a town
If the property is in an obscure/remote location, then lenders may insist that you come up with a 20% deposit even if you are a first-time buyer. The reasoning being that the property will be hard to sell if you choose to move again in the future.
Normally you need to be close to town with a population greater than €12,000 people.
There can be flexibility on this, the best thing to do is to speak to your lender/broker as soon as you have identified the property and they can advise.
One of the benefits of dealing with a broker like Simpler is that we deal with a large number of first-time buyers. Some people are prepared, some people are not prepared but almost everyone is worried.
The current Central bank rules state that you can’t borrow more than 3.5 times your income.
There are two ways to get a mortgage in Ireland you can go direct to a bank or you can go to a mortgage broker like Simpler.