First Time Buyers
Many first time buyers tell us how difficult they find the process of dealing with mortgage brokers, estate agents, insurance brokers, solicitors. There is a lot of paperwork to be filled out and phone calls and meetings to attend. Having spent thirty years dealing with property purchase, we have simplified the legal process so that much of the stress and hassle is removed. The result is that you save time and money and you can focus on the important things such as fitting out and moving in to your new home.
How do we save you time, money and hassle?
- Process explained in plain English;
Which means you will not be baffled by the jargon
- 6 Critical Mistakes to Avoid Guide;
Which helps you to avoid the common pitfalls;
- Simplified Steps to buying a property guide;
Which sets out each step of the process for you to tick off as we progress.
- Regular contact to keep you up to date;
Which means we work as a team;
- Fixed fee quote in advance;
Which means you know where you stand with your budget;
- Up to date technology;
Which means you get the benefit of added efficiency;
- Experienced friendly conveyancing Solicitor;
Which means you are not passed on to juniors or legal executives;
- Professional Indemnity insurance;
Which means you have the guarantee of getting good title to your new house;
- Law Society regulated;
Which means we are regularily audited and comply with the Solicitors Regulations.
- Q6000 Standard;
Which means we care about providing you with the best service.
- City centre location beside Luas;
Which means easy access if you need to drop in for a chat.
Living or Working in the United Kingdom
Beware the Exit Fees
Most of us who take out a fixed-rate mortgage will naturally focus on the interest rate and fee as we look to keep the upfront costs and ongoing monthly repayments to a minimum.
However, it is just as important to check the costs of ending a fixed-rate deal ahead of schedule, particularly when you realise the potential costs involved. An Early Repayment Charge (ERC) will be detailed in your mortgage agreement and will tell you how much of a financial penalty you would have to pay to exit your deal before you reach the agreed maturity date.
Take current five-year, fixed-rate products as an example. Many lenders will charge you a % of your mortgage balance to quit the deal in the first year, but in reality this is something you are quite unlikely to want to do.
The situation changes when you get to the last 12-18 months or so of your term as you will be taking more notice of the interest rates available and starting to consider your options for when your deal finishes.
This is where the difference in ERC charges is important. In the final year of a five-year fixed deal, some lenders will only charge 1% of your balance as a get-out fee whereas some will demand a hefty 5%.
To give you an idea of the cost difference, someone with a €175,000 mortgage having to stump up a 5% exit penalty would be faced with a bill of €8,750 compared with a far more manageable €1,750 payable to a lender charging just 1%.
For those with a smaller loan, the costs will not be as great.
However, the potential savings of moving to a lower rate will be smaller too, so the size of the exit fee is still an important factor.
First Timers and deposits.
The biggest problem for first-time buyers is managing to save a 5% or 10% deposit to put down on their first home. Following the 2008 banking crisis, it became almost impossible to find a lender willing to lend unless you had at least a 20% stake to put down.
To give you an example of the monthly repayments on a mortgage with a 5% deposit, look at the following example with Building Society mortgage at 5.99% for twenty five years plus a fee of €899.
On a property costing €120,000, you would need to find a deposit of €6,000 plus pay the mortgage product fee of €899. On the remaining €114,000 mortgage balance, if you select a 25-year term, your monthly repayments will be €734 per month.
Be aware of the risks of a large mortgage.
However, taking out a large mortgage does come with some risks. The main one is the danger of falling into negative equity if house prices fall and your outstanding mortgage is more than the value of your house.
If you have a small deposit you only have a small buffer against the effect of falling house prices. This problem is sometimes greater with new-build properties because you often pay an extra premium on the price simply because you are buying a new home.
Negative equity becomes a problem if you have to move or you want to remortgage to a new deal.
Unless you feel very confident choosing a mortgage, it is always wise to seek independent mortgage advice, particularly so if you are planning to buy with a small deposit.
6 things to consider when buying
1 - Interest rate choice – fixed rate or variable rate?
Rather than base your decision solely on cost, this should come down to your own financial situation. If you are worried about your budget then an affordable fixed rate is likely to be your best option as you won’t have to worry about finding extra money if interest rates go up. If your budget is flexible, it is worth taking a look at the lower priced tracker and discount mortgages.
2 - Why the size of your deposit is important
Lenders price products according to how much deposit you have available. Lenders express this as Loan to Value (LTV). For example, if you have 25% of the purchase price to put down, the lender is giving you a loan up to 75% of the value of the property. The higher the LTV, the higher the interest rate becomes as the lender is taking on a greater risk.
3 - What is Standard Variable Rate?
The SVR is a lender’s “default” rate you are automatically transferred to when a fixed-rate or tracker mortgage deal expires. Lenders can raise or lower their SVRs at any time – but this tends to be influenced by changes to the base rate at which banks themselves borrow.
4 - Overpaying your mortgage
If you can afford to make additional payments on top of agreed monthly repayments, you will end up repaying your mortgage earlier than planned and can save substantial interest charges. Check with your lender to see if overpayments are permitted.
5 - Offset mortgages
Some lenders offer deals where your savings balance can be offset against your loan. If you had €60,000 on your mortgage and €15,000 in savings, you would be charged mortgage interest on the difference of €45,000, and you have access to your savings. This is a great way to repay your mortgage much earlier and save thousands in interest too.
6 - Read the small print
It is easy to get carried away by a very low interest rate or a fee-free mortgage, but don’t jump in without understanding the finer details. What are the exit penalties, can you make unlimited overpayments and the lenders SVR are things to consider.
So why not get a no obligation fixed fee quote now. You could save a lot of money. If you have questions, why not call or email us now without obligation and we will be happy to answer your queries without charge.
No solicitor/client relationship or duty of care or liability of any nature shall exist or be deemed to exist between O’Shea Legal and you until you have received confirmation in writing from us in which we confirm our appointment as your Solicitors.
*In contentious business a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
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I have engaged Eoin O’Shea as my solicitor on several occasions over the years and I am more than happy with his services. I wish Eoin continued success in his legal practice.
Our Legal Publications
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The Executors Guide - 'At last a step by step guide, composed in plain english, for the executor or administrator who chooses not to employ a solicitor. This book contains invaluable advice and tips on how to get the difficult task of winding up an estate of a deceased person done as quickly as possible avoiding the traps for the unwary. It covers all the steps from the grave to the final distribution of the estate. It can save the estate thousands of euro in legal fees'