Help to buy scheme - 31 year old single on 50k

[vicky7833]

Hi,

Any info is appreciated on the help to buy scheme...

I am a 31 single, working professional on gross salary of €50k. I feel 2020 may as well be used on starting to plan for the future.

4 weekly pay - approx €2800.

My downfall - I don't have any savings ( but I have worked hard and used disposable to travel the world with my time off). I have approx €8k in Life assurance with Mercer (I think) for when I retire or if I pass away it will be left. I have stopped paying into this for the past few years.
I did come into financial difficulty on student loans when I became unemployed, they are paid off but left a mark on my file. Only recently paid off.

I currently pay 480 per month on rent - paid out of my bank account
345 per month on car insurance (third party claimed from me for emotional in a car accident) - paid out of my bank account. - Hoping a reduction at the next renewal at the end of this year.

No loans.

I have paid tax consistently since 2008 with the exception of 2013 when I was unemployed for about 10 months. Salary has grown over the years as I worked hard and pushed for advancement, started off in 2008 on 19000.

Can an expert give me advice on whether I would be a candidate for Help to buy? How does it work - and what are my next steps a part from starting to save.

Thanks a mill.

 

[_OkGo_]

Hi @vicky7833 ,

As long as you are a first time buyer, then you are a candidate for HTB. HTB is also a tax rebate based on the previous 4 years so if you have been working consistently in the period then it is very likely that you will be able to avail of the HTB

As a first time buyer, you can borrow 3.5x salary at a maximum 90% loan to value meaning you could borrow up to €175k with a 10% deposit (approx €20k). Effectively your upper price range is at €195k. There are other costs involved in buying such as stamp duty, solicitors etc so you will need to budget for more than this. Your first target should be to reach €30k in savings.

Secondly, go to a mortgage broker and discuss your situation. A good broker will help you plan for your application by:

• Reviewing your finances and giving you an honest opinion
• Advising on how to show a good savings history

Realistically you are 2 years away from saving enough to get started so that same broker should tell you this and politely send you on your way to start saving telling you to come back when you are at €15k

Thirdly, you need to get a good handle on your personal finances. On a salary of 50k, you should have serious scope to save €1-1.5k per month. Obviously your salary has grown over the years so you probably didn't have the capacity to save as much but now you have the straight forward decision to begin making some sacrifices to save as much as possible

Finally, your car insurance is crazily expensive even with a claim against it. You need to shop around for better quotations on your next renewal. Or alternatively, depending on where you live. Would you be willing to sacrifice the car and insurance and use public transport and/or bikes for getting around?

 

[vicky7833]

Hi @vicky7833 ,

As long as you are a first time buyer, then you are a candidate for HTB. HTB is also a tax rebate based on the previous 4 years so if you have been working consistently in the period then it is very likely that you will be able to avail of the HTB

As a first time buyer, you can borrow 3.5x salary at a maximum 90% loan to value meaning you could borrow up to €175k with a 10% deposit (approx €20k). Effectively your upper price range is at €195k. There are other costs involved in buying such as stamp duty, solicitors etc so you will need to budget for more than this. Your first target should be to reach €30k in savings.

Secondly, go to a mortgage broker and discuss your situation. A good broker will help you plan for your application by:

• Reviewing your finances and giving you an honest opinion
• Advising on how to show a good savings history

Realistically you are 2 years away from saving enough to get started so that same broker should tell you this and politely send you on your way to start saving telling you to come back when you are at €15k

Thirdly, you need to get a good handle on your personal finances. On a salary of 50k, you should have serious scope to save €1-1.5k per month. Obviously your salary has grown over the years so you probably didn't have the capacity to save as much but now you have the straight forward decision to begin making some sacrifices to save as much as possible

Finally, your car insurance is crazily expensive even with a claim against it. You need to shop around for better quotations on your next renewal. Or alternatively, depending on where you live. Would you be willing to sacrifice the car and insurance and use public transport and/or bikes for getting around?

Hi,

Thanks so much for taking the time to write that response. It has only been in the last few years that I’ve worked my way up to a decent salary. Before I was scraping by.
I have been terrible at saving and always used my time off to travel so never had any disposable income that I wanted to save! I’ve lots of good memories though so I’m happy.

Yes my car insurance is extremely expensive. It was 4K at the end of 2019. It’s due to for renewal at the end of this year. I really hope it goes down. I will shop around. I know it’s crazy money but I would be lost without a car in Donegal although I guess working from home would help!

I will start to save number 1 and as you said when I’ve savings of at least 15k I will make an appointment with them. It will take me awhile but I will get there

 

[dereko1969]

You state you've only recently paid off the outstanding loans that you were behind on. You should check your record on the ICB as it will be very difficult to get a loan with those issues still recorded there. Check below for details:
[broken link removed]

 

[so-crates]

Hi,

Thanks so much for taking the time to write that response. It has only been in the last few years that I’ve worked my way up to a decent salary. Before I was scraping by.
I have been terrible at saving and always used my time off to travel so never had any disposable income that I wanted to save! I’ve lots of good memories though so I’m happy.

Yes my car insurance is extremely expensive. It was 4K at the end of 2019. It’s due to for renewal at the end of this year. I really hope it goes down. I will shop around. I know it’s crazy money but I would be lost without a car in Donegal although I guess working from home would help!

I will start to save number 1 and as you said when I’ve savings of at least 15k I will make an appointment with them. It will take me awhile but I will get there

First off, well done for getting yourself to this point and best of luck with your next steps.

The best rule I have found with saving is "pay yourself first". In other words, have your savings come out right after you are paid. Don't try to leap into saving €1k a month if you haven't been doing it up to now. Sit down and list all your usual monthly expenses, the ones that you would not be looking to give up in order to save, and work out what remains after those, then take that amount out right after your next pay day and see how you cope without it. Don't be disheartened if you find it hard at first, like most things, it gets easier with "practice".