Getting the keys to your own front door for the first time is an amazing feeling and it may not be beyond your reach with the right mortgage advice to help you get your finance in place.

Although it can be a daunting process, and buying a property is not always easy or straightforward, with the right advice and knowing the steps that you will need to take, it can be done.

MortgageOne is a long established insurance and financial services company with a track record of finding solutions for corporate and personal customers. We can help you get your foot on the property ladder for the first time.

First-Time-Buyers

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Who qualifies as a first time buyer?

You will qualify as first time buyer if you fulfil these criteria:

  • You do not own or have an interest in a property in Ireland or another country.
  • You have never had a mortgage or bought or built a property to live in in Ireland or another country.
  • You do not have an interest in a previous property eg. following bankruptcy or divorce.
  • You intend to purchase a property as your main residence.

If you have previously bought a property but have been divorced or bankrupt and now no longer own or have an interest in any property, you are a ‘fresh start’ applicant and can qualify for help to buy schemes and can borrow up to 4 times your salary.

If you intend to buy a property with another person, then both must be first time buyers to borrow as first time buyers.

Start Your Mortgage Journey

Our online mortgage portal makes starting a mortgage quick and easy, and our advisors are always on hand to guide you through the process

How much can a first time buyer borrow?

The loan to income limit allows you to borrow depending on your income. As a first time buyer, you may borrow up to 4 times your gross earnings, and as a second time buyer or for subsequent house purchases, you may borrow 3.5 times your annual income.

However, the amount you can borrow will depend on several factors of which income is one. There are also other factors:

  • Your income, or your and your partner’s combined income if you are borrowing jointly.
  • The value of the property you intend to purchase.
  • Your monthly outgoings or financial commitments.
  • Your credit rating or credit history including current debts eg. overdraft, credit cards, loans.
  • The mortgage term, which may depend on your age.

The Central Bank of Ireland regulates mortgage lending in Ireland.

How much of a deposit do I need as a first time buyer?

As a first time buyer, or a second time or subsequent purchaser, you may only borrow 90% of your home’s value or purchase price. 

This means that you must have 10% of the house’s purchase price as a deposit.

This is known as the Loan to Value Ratio, or the deposit rule, or the minimum deposit requirement.

For example, if you wish to purchase a house valued at €450,000, you must have a deposit of €45,000.

saving money for house

What is a mortgage exemption?

You may be able to get a mortgage exemption which will  mean that you can borrow 4.5% of your annual income as a first time buyer, or you may be able to have a slightly lower deposit.

In any one year, banks can give 15% of mortgages to applicants that breach either the deposit requirement or the income limit. 

If you apply for a mortgage earlier in the year and have a strong application, ie. higher income(s) and good credit rating, you may be able to get a mortgage exemption.

Saving for a deposit

Being realistic, it is difficult to save for a house deposit. There are some tips that are worth trying.

If you have high interest debt such as a credit card or overdraft, then try to reduce or pay off this debt as soon as you can. This may also help in applying for a mortgage.

Review your expenditure and try to save a proportion of your wages or salary each month. Try to reduce discretionary spending where possible. Set saving goals and to stick to them if at all possible. Again, having a track record of saving will help in applying for a mortgage.

Know how much you need to save. Have an idea of house prices in the areas you wish to purchase and bear in mind that there are numerous expenses in buying your first home that you will need to account for such as:

  • Stamp duty
  • Legal fees
  • Valuation
  • House survey
  • Home insurance
  • Mortgage protection insurance.
  • Emergency fund for unexpected expenses such as repairs

Government Schemes for first time buyers

There are Government schemes to help first time buyers. These include:

  • The Help to Buy Scheme
  • The First Home Scheme

The Help to Buy Scheme

The Help to Buy Scheme is for first time buyers buying a new build house or apartment or building their own home.

The home must have a value of less than €500,000 and you must intend to purchase the property with a minimum loan to value ratio of 70%.

You can receive a refund of income tax and Deposit Interest Retention Tax paid in the four years prior to the year of applying for the scheme to help with a deposit.

The First Home Scheme

If you wish to buy or build your first home, this is a shared equity scheme.

The Government or participating banks can pay up to 30% of the cost of your new home in return for a stake in the home. You can later purchase this stake from the Government or bank but you do not have to.

Let’s Get Started

Our online mortgage portal makes starting a mortgage quick and easy, and our advisors are always on hand to guide you through the process

Mortgage application process

This can be a protracted process and can take some time. The basic steps are outlined here.

You must first complete a mortgage application. You may apply direct to a mortgage lender or you may go through a broker such as MortgageOne.

You will need begin to gather the necessary paperwork at this stage. Although you may not need to have everything to get an Approval in Principle, you will certainly have to show evidence of savings, bank statements, and evidence of your earnings.

Some of the necessary paperwork may include:

  • Form of ID such as a passport
  • Evidence of your PPS number
  • Proof of address eg. utility bill
  • Proof of income eg. Revenue statement of earnings, Salary Certificate from your employer, Charges and Payments Statement from Revenue
  • Bank statements showing that you can afford repayments and regular savings, usually 6 months of statements.
  • Credit card and/or loan statements.

This is, in effect, a letter from the lender after they have assessed your application stating what they could lend you based on the information that you have given them.

You may need your Approval in Principle when viewing properties and when you make an offer on a property.

This is the part you have been waiting for! Viewing properties and hopefully going ‘Sale Agreed’

If you are intending to purchase a property you will need to contact a solicitor who will carry out conveyancing. As well as get a valuation on the house for your lender. It may also be worth getting a survey carried out on the property although your lender may not require this.

If your lender is happy with the valuation on the property, they will approve the mortgage and will issue a formal letter of offer outlining details of your mortgage. 

This will include details such as loan amount, term of the mortgage, and repayment schedule amongst other things.

Your solicitor will carry out the necessary legal work and you will sign the contract of sale.

You will need to provide final payslips to your lender. You will also need to shoe evidence that you have mortgage protection insurance, or adequate life insurance, in place as well as home insurance for your new home.

At this stage, you will need to pay the balance of your deposit and your solicitor will arrange the transfer of funds for the property as well as stamp duty, where applicable and registration fees.

Then you can collect the keys!

Mortgage Calculator

Use our Mortgage Calculator to see how much you could borrow, based on your salary or income, and your deposit.

MortgageOne has mortgage advisors who can find lenders with the best mortgage rates. They can assist you to find a lender in the Irish mortgage market and have a strong reputation for customer focus.

MortgageOne has been an independent family business since 1938 and can help you to find mortgage protection insurance and home insurance as well as a great mortgage deal.

Get started by using our mortgage calculator and leave us your details and we can contact you, or you can call us if you’d prefer a chat to explore your options first.

Speak to the mortgage experts today

For the best advice on your mortgage, speak to MorgageOnes team of Qualified Financial Advisors. 

Let us help take the stress out of finding your first home.