Buying a home in 2024 – three ways to boost your chances of becoming a homeowner in 2024
Demand from first time buyers is at an all time high with over 30,000 mortgage applications approved in 2023.
Looking at some stats, the median age of a first-time buyer is now 35 years, they have a median household income of €82,000 and the average first time buyer mortgage is now over €295,000.
With figures rising on age, income and mortgage levels it is getting more challenging for would be homeowners to purchase.
Some of the key barriers to purchasing a home are property price inflation and the requirement for larger deposits as a result. Affordability and eligibility for large mortgages that are now required to purchase an average home.
Ensure you are aware of the schemes available to first time buyers
The two key schemes are the help to buy scheme which offers a rebate of tax to eligible applicants. 10pc of the purchase price up to cap of €30,000 is available for new build purchases up to value €500,000.
The first home scheme is designed to bridge the gap between the mortgage you are eligible for, your deposit and the purchase price of a new build home. The amount available is up to 30% of the purchase price of the home but when used in conjunction with the help to buy the amount is capped at 20%. See our blog on the first home scheme – Read here
Understand your mortgage eligibility
The Central Bank of Ireland sets mortgage lending rules which currently stand at 4 times allowable income. Mortgage lenders all have different underwriting criteria in assessing allowable income and as a result will offer varying mortgage levels.
If you are seeking to maximise the mortgage level you can achieve it is so important that you get market based advice from a broker to understand what options are available to you.
Exceptions to Central Bank rules are also available from some lenders allowing you to borrow up to 4.75 times allowable income.
A key factor when looking at mortgage eligibility is ensuring you show clear evidence of repayment ability. The banks look at a narrow window of the six months immediately preceding the application.
Broaden your search – type of homes
Support schemes for first time buyers are all focused on new build homes yet there are generally more second-hand homes sold than there are new homes available to purchase.
Much of the stock of second-hand homes that come to market require modernisation and as such it can be off putting for first time buyers who already struggle to accumulate the required 10pc deposit.
However what many are not aware of is that you can purchase a home and complete works as part of your mortgage. In an example where a client is approved for €360,000 mortgage on the basis of purchase price €400,000 but they secure a property for €350,000 and want to complete €50,000 worth of works. Once a satisfactory costing of works is submitted then the bank will release 90pc of the cost to purchase and 90pc of the cost of works subject to satisfactory invoices being submitted if non structural work or satisfactory certification by a professional if works are of a structural nature. A valuation will also be required to confirm the value of the property as a bank will never lend more than 90pc of the value on completion.
At doddl we offer support for home buyers through their mortgage and home buying journey. If you want to apply for a mortgage then use our free service to access all major lenders offering lowest market rate. We are here to help so get in touch -> Get Started Here
