How To Buy A House In Ireland? – A Step-by-Step Guide
By The Headlines, July 23, 2023 | 10:52 AM
Purchasing a home in Ireland can seem like a daunting procedure. In order to make the process as simple as possible, follow the instructions in this step-by-step guide to buying a home.
1. Finalise a budget
It's crucial to keep your expectations realistic while looking to purchase a home. Setting up a budget is necessary, but how do you determine what you can actually afford? Your present funds, any stocks, shares, or investments, and a potential mortgage are the three things to examine.
Before asking a bank how much money they can offer you for a home purchase, you must have all of your ducks in a row with regard to the first two. You should be able to get assistance from an independent mortgage broker who serves the entire market.
Starting your mortgage savings as early as you can, ideally, six months before you intend to buy, is crucial. Before you can submit an offer on the home of your dreams, you must first save a deposit and receive financing approval in principle.
Once you've determined your spending limit, make sure to account for legal expenses and stamp duty because you cannot consummate the acquisition without paying for these essential costs.
2. Get finances in order
It is crucial that you have thoroughly examined your finances because any trustworthy lender will do the same. Since they would be giving you a sizable loan, it is their responsibility to make sure you can make the repayments.
Make sure everything is in order from the beginning to avoid any unneeded delays. Hopefully, you can demonstrate to the banks that you have been consistently setting aside a portion of your income for savings.
Missed credit card or loan payments are warning signs to watch out for during this process. As much as you can, pay off any credit card debt that is still owing, and stay away from betting transactions because they can make you appear to be a hazardous investment. Since interest rates are expected to continue rising throughout the EU, it is important to bear this in mind while locking in the length of your mortgage repayments.
3. Important information for First-Time Buyers
A 90% cap will be applied to the first €300,000 of any property purchased by a first-time buyer, and an 80% cap will be applied to any amount over this. As a first-time buyer, your ability to get a mortgage will frequently be capped at 90% of your income. This implies that a minimum deposit of 10% is needed.
Regarding the Central Bank's first-time mortgage lending limits, there is some pretty useful information on the Citizen's Information website. You are permitted to borrow up to 80% of the price of the property if you are not a first-time buyer. The government's First Home Scheme may also be available to first-time purchasers. This shared equity programme can contribute up to 30% of the cost of buying a home. On the Revenue website, you may find all the information regarding the First-Time Buyer's Relief.
4. Hunt for homes
Although the real estate market may seem a little frightening right now, the fun part is meant to be going out and looking for the home of your dreams. This is your chance to learn more about the neighbourhood where you want to buy a home and determine what your budget will actually allow.
Being informed and organised are essential for having a fruitful housing search. Investigate the local real estate market. Find out what kinds of properties are available, how much they cost, and how those properties match your preferences and budget.
Make a list of the characteristics that are absolutely necessary for you as well as a few wants that you can live without before you begin your search. This will make it easier for you to compare the many qualities you see and find compromises where you need them. Location against size, convenience versus garden, and historical elements versus excellent nearby schools are all criteria to take into account.
5. Hire a solicitor
You must hire a solicitor to handle your own conveyancing after you've identified the house you want to buy and the seller and you have reached an agreement on the price and other terms (via an estate agency). They'll open a file and start the transactional process. It's crucial to choose a professional you can trust because they will be able to walk you through all the paperwork you must complete and explain exactly what needs to be done and when.
6. Hire an inspector for Survey
A seller is not compelled to inform you of any defects in a property. Therefore, before you complete the purchase, you should have the property surveyed to look for any concerns. The structural survey will reveal any issues that you might not have been aware of when you made your offer. For instance, if your surveyor finds that the roof needs to be replaced, you can choose to either change your offer to reflect this or decide not to proceed with the sale at all. The Society of Chartered Surveyors Ireland (SCSI) is the association that represents chartered surveyors professionally.
7. Mortgage approval and agreed-upon going-sale
A booking deposit must be made to the estate agent after the transaction has been approved. Be ready to put down a sizeable sum as a down payment because this might be anything from a few thousand euros to 3% of the overall sale price. This money will be returned in the event that the sale is abandoned because neither party has yet signed the paperwork. The estate agent can then provide sales information.
When requesting a mortgage loan, lenders need borrowers to obtain life insurance, sometimes referred to as mortgage protection. Additionally, this will protect you from any theft or damage that takes place within your house. Assembling this can take some time, so make sure to get started as soon as you can.
The contracts and copies of the title documents will be issued at the next stage. A loan pack from the bank or building society will arrive at around the same time as the official notice of the loan. Keep in mind that the letter of offer outlines all the important information about the contract. It is crucial that you fill out the letter completely and sign it before the loan can be processed.
8. Finalising The Deal
You should carefully review the contract with your attorney, and if everything is in order, sign it and send the contract deposit. This usually translates to 10% of the purchase price, minus the already-paid booking price. New construction may necessitate a payment that was computed in a different way. Your attorney will then make duplicate copies of each document and send them to the attorney for the seller.
The exchanging of contracts will come next. Once this has occurred, both parties are in agreement and are bound by the terms and conditions outlined in the contract.
Your solicitor will issue a requisition on title, which is forwarded to the seller's solicitor, once they have returned the loan acceptance documentation to your bank or building society. All parties can now agree on a closing date and time, and your solicitor can then draught a statement indicating the remaining funds needed to finalise the sale.
9. Completion Notification (Only for New Homes)
You will receive a completion notice when a new home is finished, and your solicitor will also receive a copy. Use this chance to do a proper inspection of the home and make a list of any issues you have with it or things that are incomplete. Make a copy of this document, retain one for yourself, and then give the other to the location. Before moving on, be sure that any problems are resolved and that your solicitor has received permission.
10. Completing the Purchase
Deliveries of the funds needed to complete the acquisition often occur the day before the completion date. Typically, it takes the form of a bank draught payable to your attorney. This marks the official end of your home purchase. The seller's attorney typically gives you the keys in person after handing them to you. You now possess a property!
Once the sale is finalised, the purchase deed must be signed right away due to stamp duty time restrictions. Your lawyer will next certify the purchase deed and mortgage, and it will be registered with the land registry or registry of deeds. Depending on the circumstances, this procedure may take a few months or many years.
No matter how long it takes for the process to be completely finished, you are now the home's legal owner. Your solicitor will provide the title deeds to your bank or building society after registration is complete. Along with this, a marketable title of good standing will be provided. All that's left to do is begin transferring your belongings into your new house.
11. Additional Costs while Buying A Home
You will have to pay registration fees and stamp duty for every residential transaction. For purchases under €1 million, stamp duty will be equal to 1% of the purchase price. A fee of 2% of the property value will be applied to any property worth more than €1 million.
Additionally, a land registration fee will be assessed based on the amount of the consideration stated in the Deed of Transfer.Land Registry fee may vary between €400 to €800 based on the purchase price.
Your solicitor will also charge you for legal services. While some lawyers have set fees, the majority have varying rates. You can anticipate paying 1% to 2% of the home's cost, plus any applicable VAT. It's a good idea to discuss this with your attorney so that you are not surprised at a later stage.
12. Get a house insurance
Once you've finished the home purchase process, you need to make sure that your new house and belongings are insured. You can check for a mortgage insurance provider to have your home secured.