29.03.2016 Home Insurance
Buying a house can seem like a complicated process, but when broken down into manageable steps you’ll find it isn’t actually too difficult. That is exactly what we’ve done for you in this handy infographic. And for more detailed information on each section, read on.
When buying a house, it’s important not to set your sights too high. This means establishing a budget, but how can you work out what you can actually afford? The three things to take into consideration are your current savings; any stocks, shares or investments; and a potential mortgage.
You will need to have all your ducks in a row in reference to the first two, before speaking to a bank about how much money they will be able to lend you for purchasing a home. An independent mortgage broker who covers the entire market should be able to guide you through the process.
Once you have worked out your budget, be sure to factor in legal fees and stamp duty, as you will not be able to complete the purchase without paying for these crucial elements.
It is important that you have been through your finances with a fine tooth comb, as any reputable lender will do the same. After all, they will be offering you a large sum of money and it is their duty to ensure you can afford the repayments. Avoid any unnecessary delays by ensuring everything is in order right from the start.
Red flags to look out for during this process include missed credit card or loan repayments. Pay off as much as you can on outstanding credit card debt and avoid betting transactions, as they tend to make you look like a risky investment.
First time buyers purchasing property exceeding €220,000 will have a 90 per cent limit applied to the first €220,000, with 80 per cent limit on anything over this.
Lenders require buyers to have life insurance, also known as mortgage protection, when applying for a property loan. This will also insure you against any damage or theft that occurs within your home. As this can take time to arrange, be sure to start the process as early as possible.
Going out and looking for the house of your dreams is the fun bit. Here is the opportunity to explore the area in which you are hoping to buy and see what your budget can realistically get you. Prior to starting the search, make a list of your absolute essential features, as well as a few wants, which you are flexible on. This will help you to make comparisons between the properties you view and compromises where they are needed.
Priorities to consider include location versus space, convenience versus garden and period features versus good local schools.
Once you’ve found the right home for you, it’s time to enlist the services of a solicitor, who will open a file and put transaction proceedings into motion. This professional will be able to guide you through all the paperwork you need to complete and what exactly needs to be done when.
After approval has been given for the purchase, a booking deposit must be paid to the estate agent. This could be anything from a few thousand euros to three per cent of the total sale amount, so be prepared to hand over a substantial amount as a down payment.
As neither parties have yet signed the documents, this deposit will be refunded if the sale falls through. Sales details can then be issued by the estate agent.
The term sales details refers to the information prepared by the estate agent and distributed to the buyer, seller and solicitor. It should include the names and current addresses of all parties, the price and the estimated closing date of the sale.
An unencumbered property is one that is free of any encumbrances, such as creditor claims or debts, making it easier to buy or sell. One that has claims against it from parties that are not the owner can be harder to transfer or can have its use restricted until the encumbrance is lifted. It is important to find out about any encumbrances and the effects they could have on the sale.
The next step is for the contracts to be issued, along with copies of the title deeds. Around about the same time official notice of the loan will arrive in the form of a loan pack from the bank or building society. Take note of the letter of offer, which lays out all the main details of the agreement.
Completing all the fields on the letter and signing it is important for the loan to be processed.
You and your solicitor should check the contract closely, sign it and pay the contract deposit. Usually, this equates to ten per cent of the purchase price, excluding the booking price already paid. New builds may require a payment that has been calculated in a different manner.
All of the documents will then be duplicated by your solicitor and sent on to the solicitor representing the seller.
Once the contracts have been exchanged, a binding agreement is made between all parties, which is subject to the terms and conditions set our within the contract.
When your solicitor has returned the loan acceptance documents to your bank or building society, they will then raise a requisition on title, which is sent to the seller’s solicitor.
When a new house is finished, you will be sent a completion notice and your solicitor will also get a copy. Take this opportunity to formally inspect the house and create a snag list of anything that is not finished or you are unhappy about. Duplicate this document and keep one copy yourself, before handing the other over to the site supervisor. Ensure that any issues are rectified and your solicitor is given the go-ahead before proceeding.
A closing date and time can now be agreed by all parties, with your solicitor drafting a statement outlining the balance required to complete the sale.
The money required to complete the purchase is delivered in advance, most often the day before the completion date. It usually comes in the form of a bank draft made payable to your solicitor.
This is the formal completion of your house purchase. The keys are handed over by the seller’s solicitor and in most cases, to you personally. You are now a home owner!
Stamp duty time limitations mean that the purchase deed must be signed quickly once the sale has been completed.
The purchase deed and mortgage will then be stamped by your solicitor and the land registry or registry of deeds will be registered. This process can take months of years, depending on the circumstances.
At this point you are the legal owner of the house, no matter how long it takes for the process to be finally completed. Once registration has been achieved, your solicitor will return the title deeds to your bank or building society. This will be accompanied by a marketable title of good standing.
Your solicitor will usually close your file at this point.
|Property Value (€)||Stamp Duty (€)|
|Up to €1,000,000||1%|
|Over €1,000,000||2% on all value over €1,000,00|
|Property Value (€)
||Stamp Duty (€)|
|Up to €50,000|
|€50,000 - €200,000||€600|
|€200,000 - €400,000||€700|
No fixed rate, can vary from 1%-1.5%, plus 23% VAT payable.
Note: When buying a house it is important to seek proper legal and professional advice.