Are my first time buyer plans realistic?

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pansy

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Hi All,

I am hoping to buy an 2bed apartment in Dublin City Center in 2012. My planned budget is €230k (plus €10k for fees etc). I'm working towards having €20k saved and my parents have offered me another €20k so I would need a mortgage of €200k.

My gross salary is €45k, I'm currently paying €500 per month in rent and saving €750. I'm 25 and single with no kids. I intend to rent out a room, but think that I could afford the payments without that additional income.

As a single person, are my plans realistic? Or am I deluding myself? What steps should I take now to put myself in the best position (in terms of getting a mortgage) when the time comes?

Any advice would be much appreciated!
Thanks
 
Sounds realistic to me. I reckon you should get a mortgage for that amount with that income if you're on a permanent contract. Also sounds like you could probably afford the repayments on your own.
 
Sounds reasonable to me. Using a mortgage calculator to try a simple stress test, it looks like you can afford €200k for 25 years on your €1250 (rent+savings) if the rate you get charged stays below 6%. With someone to rent a room, this will give you lots more stability.

The overall amount seems OK too, but it's near what banks would have liked to lend in the crazy days. I'd guess once they see the 10k from your parents, they'll start looking for them to guarantee the loan. So, for future planning, it might be an idea to transfer this to your account now, so when you apply in a years time the bank wont see 10k dropping in from nowhere.

If at all possible, it would be nice to stash an additional 3 months net salary as a basic cushion against the unexpected before you take the plunge.

Good luck!
 
I think it is. He can rent the second bedroom out if he feels the need for a room mate. Will come in handy if he has over night guests, or he ever decides to work from home, as it can be a home office. I am in the process of looking for an apt too (albeit to rent) and the diff between the one and two bedroom places is laughable.
 
Just wouldn't recommend anyone to buy the shoe boxes that were built, that's all.

Beffers you're doing a buy to let and that is a completely different market.
 
I'm in my mid 30's. I have several friends & colleagues around the same age who bought apartments in their mid-late 20's when they were single. Now they're married or in longterm relationships, they're struggling to fit 2 kids into their 2 bed apartments, or in one case, postponing having a family because they can't sell the apartment and move.
The wealthier people I know in this position have rented out their apartments and have rented houses (or bigger 3/4 bed apartments), but are still paying several hundred euro a month on top of their rent received to pay their mortgages on the apartment they own.

You're 25 and single, and smart with your cash if you're on the way to having 20k in savings. Stay renting, enjoy the freedom.

My €0.02.
 
I personally would go for a house rather than an apartment. I waited a while to try to guess the market, nearly bought an apartment twice but held out and now I have a fab house in a really nice area close to the city centre. The thing that really puts me off apartment living is the management fees.

Miser made some good points about apartment living, if you are only planning to live there short term then go for it but there are plenty of great houses at the great prices around the city centre that need a bit of fixing up but are worth the hassle and expense in the long run.
 
miser said:
I'm in my mid 30's. I have several friends & colleagues around the same age who bought apartments in their mid-late 20's when they were single. Now they're married or in longterm relationships, they're struggling to fit 2 kids into their 2 bed apartments, or in one case, postponing having a family because they can't sell the apartment and move.
The wealthier people I know in this position have rented out their apartments and have rented houses (or bigger 3/4 bed apartments), but are still paying several hundred euro a month on top of their rent received to pay their mortgages on the apartment they own.

You're 25 and single, and smart with your cash if you're on the way to having 20k in savings. Stay renting, enjoy the freedom.

My €0.02.
Click to expand...


^ What this guy said
 
Why are you in a hurry to buy?

If I were you I would continue saving and then buy in maybe 3 or 4 years.

By then you should have at least 50k saved and most likely 2 bed apartments will be a lot cheaper than 230k. Obviously no one can predict the future but I think it's probably fair to say there is a bit more pain to go!

You could probably save more than 750 PM as well, so you'd have even more savings.

Remember every euro of your mortgage is about three euros paid back over the life of the mortgage, so you want your mortgage to be as small as possible. :)
 
For a very easy to use general purpose calculator, including mortgage stuff I use
WolframAlpha.com. Type in a search term like "mortgage 25 years 200000 capital 4.1% rate" and it will make sense of it and give you a fairly full answer.
 
pansy said:
Hi All,

I am hoping to buy an 2bed apartment in Dublin City Center in 2012. My planned budget is €230k (plus €10k for fees etc). I'm working towards having €20k saved and my parents have offered me another €20k so I would need a mortgage of €200k.

My gross salary is €45k, I'm currently paying €500 per month in rent and saving €750. I'm 25 and single with no kids. I intend to rent out a room, but think that I could afford the payments without that additional income.

As a single person, are my plans realistic? Or am I deluding myself? What steps should I take now to put myself in the best position (in terms of getting a mortgage) when the time comes?

Any advice would be much appreciated!
Thanks
Click to expand...

25 with 20k in the bank and you want to put a 200k noose around your neck. Sheer madness. Keep renting enjoy the freedom.
 
leonmahon said:
Some people just seem to prefer living in apartments.
Click to expand...

Very very few, most bought apartments to get on the "ladder", not because they wanted to grow old in one.


If you don't intend on staying single for ever, i'd forget about an apartment.
Your young with a good income and savings, why would you want to buy now? Buy something when your in a relationship and need security. There's no property ladder, there's no rush.
 
WinWin said:
Very very few, most bought apartments to get on the "ladder", not because they wanted to grow old in one.
Click to expand...

I agree with you.

Slightly OT - when I'm old is exactly when I'd like to have an apartment...smaller, easier to heat, no garden maintenance, secure etc.
 
If you buy in 2011, you may qualify for a lot larger amount of tax relief, if you are a First Time Buyer.

Leaving it till 2012 will cost you thousands.
 
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