Here are a few things you can do and some advice on saving for a deposit for first-time home buyers.
Saving practices are crucial when applying for a mortgage
Despite the fact that it may seem straightforward, saving is crucial for obtaining a deposit for first-time buyers. Yet, because of the high rent and other expenses, it may be challenging to save for your deposit in a reasonable amount of time. Creating a good savings habit by starting small is not difficult.
Also, it displays to the bank your capacity for consistent monthly saving. Even if you receive the entire deposit as a gift or an inheritance, the deposit banks will still want to know that you are capable of managing your own finances and paying your monthly mortgage.
It is easy to set up a savings account and schedule a monthly direct debit for the same day each month. Keep track of your spending and plan it carefully. You can do this to quickly start saving money for your deposit, which will help you in the long run.
Remember not to withdraw any funds from your savings account. Doing this will show the bank or building society that you are a consistent and reliable saver, which indicates that you will have the same habits of continually making your mortgage repayments.
The banks will not be pleased if you make withdrawals, which could postpone the approval of your home loan application. Your account might be “frozen,” requiring you to notify the bank 30 days in advance of any intended cash withdrawals.
Make the most of the Help-To-Buy Program
Only first-time purchasers in Ireland who purchase or self-build a new residential property between July 19, 2016, and December 31, 2024 are eligible for the Help-To-Buy (HTB) program. You may be eligible to get a refund of the income tax and DIRT you paid during the preceding four tax years.
The Help-to-Buy program was created to help first-time buyers get the 10% deposit needed to buy or build a new house or apartment. It works by giving you a refund of the income tax you have paid in Ireland for the four years before you applied for the help-to-buy program. This program will increase your deposit by up to €30,000, which can hasten the process of locating a new home for you.
As of the end of May 2022, 33,843 petitions for relief under the HTB had been made, and 33,035 of those requests had been approved. At this time, claims totaling €630.9 million were authorized, while there were also €15.1 million in submitted but unapproved claims.
Choose a mortgage with a cashback package
Mortgages with cashback work by disbursing money from borrowed money. After your mortgage has been drawn down, the funds are frequently sent in one big sum right away into your bank account. Following completion of the mortgage agreement, you’ll normally get the money in two months, though certain banks might send it to you immediately.
Some people are fortunate enough to get short-term loans from family or friends while saving for a mortgage. The most practical way to pay them back quickly after the sale is through a cashback offer. Although cash-back mortgage rates may be higher than other rates, after a few years, you may easily switch to a different offer.
Think about filing a tax refund claim
In Ireland, requests for tax refunds typically range from €900 to €1,100. Even though it won’t cover the entire deposit, “every little bit helps,” as they say in one of our big retailers! You can also qualify for a tax break that was put in place during the pandemic on other bills, including heating, broadband, and electricity.
Parting Words
In conclusion, saving up a deposit for your first property in Ireland is now a very challenging endeavor. If owning a home is your long-term objective, start saving now, if you haven’t already, for a down payment on that home. Your savings habit will become a routine part of your daily life the sooner you start. You will eventually arrive there. But if you don’t start saving right away, you it will just take longer to get your deposit together and the much sought-after loan offer from your bank or building society!
If you would like to speak to us about purchasing your new home in Dunshaughlin, Ratoath, Ashbourne or Dunboyne, you can contact us by calling the phone numbers listed here on our website or by filling out the contact us form here
