Buying an Apartment on Single Income

G

Growing Rates

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7
Hi,

I'm looking to get some advice in regards to buying an apartment on an average single income.

I'm 31 and work as a pharmacy technician in the HSE and currently earn €44,572 before taxes, however that figure will see a modest increase every few months due to the current pay increase for public health workers.

I have no debt and at the moment I'm saving €1500 every month. I currently live at home with my mother and have no dependents. I have €50000 saved at the moment.

I currently live and work in East Galway though I'm looking to or closer to Galway City as I like being closer to the sea, Connemara and offers more social opportunities.

I realize apartments can in cases be a bit dodgy and the management fees could be a concern, however it seems the most realistic if I want to have my own home.

I'm not sure to speak to a mortgage advisor or financial advisor about, but hoping by posting here I will be nudged in the right direction.
 
Also I'm aware of Galway Citys traffic problems and think Bohermore would be the furthest I would move towards Galway City, however ideally I would like somewhere like Roscam and have the best of both worlds. Having a 40 minute commute to work doesn't bother as I can listen to the radio or podcasts to keep me busy.
 
Are the figures supposed to be in £ or are they actually €?

You should probably be aware of the Central Bank mortgage lending measures which dictate (in most cases) what deposit might be needed and the maximum loan that can be advanced:

What are the Central Bank Mortgage Measures?

Our mortgage measures are designed to ensure that banks are other lenders lend money sensibly. Find out more.
www.centralbank.ie
In some cases there may be some flexibility but probably best to assume that these rules dictate how much you need up front and how much you can borrow.

Don't forget to budget for stuff like conveyancing fees, stamp duty if applicable etc.
 
You could probably get a mortgage of €170k
As you have €50k, that would give you €220k buying power.

Doesn't sound as if you would get much for that.

A way to get on the housing ladder would be to join forces with a friend and buy. If you do this, have a 5 year view with an exit strategy.

A lot of people here will tell you about the dangers of this and they are right. But the dangers of waiting are probably higher.

However, by staying where you are, you are saving €15,000 a year which will help too.

Brendan
 

Sorry the figures are meant to be in euro.

I'm also taking into property surverys, solicitor fees, stamp duty and any other potential costs. I think I would have to save between €5000 - €10,000 for this.

Thank you for sending that link even if most of it goes over my head.
 
Growing Rates said:
Thank you for sending that link even if most of it goes over my head.
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All you need to know is that, in general,
Banks will lend you up to 4 times your salary
And 90% of the value of the apartment.

However, they are allowed to exceed these limits in exceptional circumstances. As an HSE technician with a guaranteed job and increments, they might go a bit more.
 
Growing Rates said:
Sorry the figures are meant to be in euro.
Click to expand...

ClubMan said:
Are the figures supposed to be in £ or are they actually €?
Click to expand...

On my computer keyboard if you hold down the Alt Gr button and press the € you should get the euro sign and not the £. It is also available on page 2 of the symbols section on your phone.

For ease of reading for everyone and to save confusion I've corrected this on your posts.

I saw a recommendation from Charlie Weston in the Indo last Saturday for a book on mortgages by Joey Sheahan called The Mortgage Coach. I borrowed it from the library and found it very easy to follow so it might help you out. His website is good and called www.mymortgages.ie

Don't forget that the credit unions are also doing mortgages now so if you are a member of the HSE one https://www.hsscu.ie/ it might be worth your while to seek advice from them too after you familiarise yourself a bit more about mortgages in general.

This key post List of Credit Union mortgage rates might be useful https://www.askaboutmoney.com/threads/list-of-credit-union-mortgage-rates.231716/
 
I wonder might you be eligible for any of the State schemes to help FTB:

For first time buyers​

  • a supply of an unprecedented 4,000 affordable purchase homes, on average, every year for families, couples and single people
  • a new local authority-led ‘Affordable Purchase Scheme’
  • a new ‘First Home’ shared equity scheme for buyers of new build homes in private homes
  • a reformed ‘Local Authority Home Loan’ scheme
  • an ‘Owner Occupier Guarantee’, to secure homes for first-time buyers and other owner-occupiers
 
I'm not sure how reliable it is, but on the AIB mortgage calculator it says on my current wage I could borrow €178,222.

Just to be clear I'm not ready to buy now I think realistically the earliest would be late 2025 which by then my annual salary should increase to around €46,000 and my savings should at around €70,0000 by then.

My main bank is AIB, is there anyone I could speak to in person to explain in detail what my options are?
 
As you might expect, there are mortgage advisors in bank branches.

You can search for branch services here:

Find your local AIB with services or ATM locations in Ireland

Find local AIB and ATM information in Ireland, including addresses, opening hours, and available services.
branches.aib.ie

There are AIB bank branches in Loughrea, Ballinasloe and Athenry.



You are of course free to chat to any lender about a mortgage, e.g. BoI, PTSB, Avant, etc.
 
DannyBoyD said:
Only advice would be to buy a 2bed, avoid 1 bed apt.
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I always see this being said but I really don't agree. if your budget is limited and you want your own place I see no problem buying a one bed.

The argument against is usually that 1-bedroom place will suffer the most in a downturn, and it's good to have a second bedroom for renting out. But how likely is a downturn right now and do you really want to share an apartment with a roommate? It may make more sense financially, but to me it defeats the whole purpose of having your own place.
 
Plus the demographics are changing, more single purchasers, just oneself and the cat.
 
DannyBoyD said:
None of us know the answer to that, which is why you always have a back up plan.

Beats being unable to pay the bills or having your home repossessed.
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One can always turn the living room Into a bedroom if the need ever arises, quite a common occ urance now in London I believe.
 
Daughter around the same age recently bought a one-bedroom apartment in a decent area (with no help from parents - apart from a few months rent free in her old bedroom.)

She could have bought a two-bedroom in a less desirable area, further out from town, with an unknown number of apartments allocated to social housing etc. In the end she opted for a second-hand one bed in a mature area with good transport links not too far from Dublin 4. Her neighbours appear to be a mix of retired downsizers, foreign students/tech workers and possibly some corporate lets.

It'd be nice to have a second bedroom of course but her budget was very limited - although she'd saved a decent deposit. (She had also noticed that a lot of new build two-bed apartments had quite small living rooms - presumably to make wayfor the box room. Her living/kitchen area is bigger than the average new build I would say.
 
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