There are many procedures to follow to buy a home in Ireland. As an immigrant in Ireland it is always a struggle to buy a property and it is hard to secure the 10% deposit, convincing the bank, legal hassles etc. The list is endless. Thus article will throw light into the process of buying a house in Ireland from the primary stage to getting the keys in your hands.
Save money to invest.
The first and foremost step in buying a home is saving the money to meet all needs. Our deposits in to a savings account will help us to pay the 10% first time deposit. Bank normally checks the bank statement of 6 months. (1 year is more preferable). An amount in our hands will be very useful to convince a mortgage lender. It will be useful at the time of applying mortgage.
The maximum mortgage price which could be obtained is 3.5 times of your annual salary. If your savings history is good, you can get more mortgage from Central Bank. Even if you don’t have a savings amount with you, your good credit history allows you to collect the deposit money as gift from your parents and family. The bank will give you a gift letter format.
If you are a stamp 4 and your spouse is a stamp 1G, the bank will allow you mortgage to buy a home.
People with Irish Citizenship and stamp 4 can easily buy a home in Ireland.
Rates are different for first time buyers and others under different schemes of Central Bank of Ireland.
First time buyers can get 90% of the overall cost as mortgage and remaining 10% have to be put by you. Help to buy (HTB) is a scheme which helps the first time buyers to get their home. Through this scheme, you can get back your tax amount paid for 4 years. A maximum of €30000 will be available as per new rules. For buying a home, you can get 10% of the total amount and in case if you are building a new home, you can get 10% of the total building cost.
If your are a second time buyer, you can get 80% of the total cost as mortgage.
Prepare your Budget.
It’s very important to plan your budget which should cover your household expenses as well as the money you have to repay to the bank.
Money for Stamp duty, Legal fees, Survey charges, Engineer reports, Shifting charges, Furnishing, decorations and electricity charges, insurance, registration fees, Property Tax etc should be considered while fixing the budget.
Approval in Principal
You can apply for mortgage directly to the bank or you can seek the help of a broker. The mortgage rates may vary for different banks. First time buyers should show more concern on the period of time given to repay the mortgage.
Approval in Principal gives you an idea on the average amount you may get even before submitting your documents.
Approval in Principal is only a guarantee which gives you a confidence in searching your homes. This is not a loan offer. You will get your loan offer only when you submit documents showing your salary and residential status. Thus with this guarantee you can search for homes , give advance and search for solicitors too.
Find your desired house
You can access your desired home by many means. Your relatives and friends can let you know about homes near them. Advertisements and online media gives you many options on homes all round the country. A Building Energy Rating certificate is mandatory for all houses for sale. You can know the energy efficiency of your desired home. Based on the efficiency of each houses, they are classified from A to G.
Find your solicitor
It’s very important to seek the help.of a solicitor to carry out all the legal procedures. Solicitors on both sides ie. your solicitor and the lendors solicitor will deal with all the proceedings. The fee of solicitors vary from person to person. In some cases a small percentage of your total building amount could be asked as the fees.
Pay the advance amount
If you are satisfied with a house, you can prevent it from buying by others by paying the advance amount. After paying the advance the estate agent will send the Sales Advice to your solicitor. The builder or vendor solicitor will forward the documents of the property to your solicitor.
Submit the documents to the bank for the loan offer
If the documents submitted by you is proven genuine, the bank will send a copy of the loan offer to you and your solicitor seperately. The mortgage insurance should be taken simultaneously.
After signing the loan offer at your solicitors office, he will proceed with the following procedures and submit the loan application.
Contract offer of the house to buy it
The builder will put an offer which includes certain conditions. Your solicitor will go through these and will make certain corrections which favour you. They will only accept the conditions if it is satisfactory. Later you should sign the building contract at your solicitor’s office.
When to give the deposit money?
You are bound to buy the house once your sign the contract. The 10% deposit amount or €30000 you got from HTB should be given to your solicitor less deposit paid. Your solicitor will give the money to the builder or vendor solicitor along with the contract.
Snagging, the process in which defects in the house are examined with the help of a professional surveyor, will be done before buying the house or after signing the contract. The cracks, unfinished plaster works, broken switches etc will be indentified.
When will the loan be granted?
The loan offer which you signed will be given back to the bank. The signed building contract will be send to the builder and your solicitor will ask for a closing document to the builder’s solicitor. At the same time, a cheque requisition form will be submitted to the bank. (This form will not be submitted along with the signed documents. You will have to pay interest from the day the fund is released to the solicitor account). The amount released by the bank will be credited into your solicitor’s account. If everything including the closing document are in order, the money will be transferred to the builder’s solicitor’s account. You should pay the stamp duty, registration fees, legal fees etc to your solicitor. After you transfer all money, you can get your keys.
Property Registration
A family declaration should be signed while the house is registered in your name. This declaration is a proof which shows the right of your spouse on your house. Once the registration is completed, submit all the documents to your bank. After repaying all the money, the documents will be given back to you.
Credits: Aravind who helped me to write this article and my best friend who kept on asking me queries on buying a house. I am indebted to Louis Kennedy Solicitors for giving me a job and Jaya Jayadev (First Indian Solicitor in Ireland) for teaching me all aspects of property transactions