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Mortgages & Advice

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Mortgages. Costs associated with a mortgage

Stamp Duty:

Stamp duty is a tax that you pay to the government when you buy a second hand home. First time buyers and owner occupiers do not pay stamp duty with the exception of exceptionally large houses. The rates are as follows:

Property 1st Time Buyers Owner Occupiers Investors/New Property
Up to €127,000 - - -
€127,001 - €190,500 - 3% 3%
€190,501 - €254,000 - 4% 4%
€254,001 - €317,500 - 5% 5%
€317,501 - €381,000 3% 6% 6%
€381,000 - €635,000 6% 7.5% 7.5%
Over €635,000 9% 9% 9%

Exceptions for paying stamp duty:

  • If you are buying a new home
  • The floor space is equal to or less than 1,346 square feet / 125 square metres
  • If your mortgage exceeds €253,947.61 duty is charged at €1.27 for every €1,269.74 borrowed.
  • The home or your only home for at least five years and you will not earn any rent on the property in this time.

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Deposits

Saving for a deposit is a vital part of the mortgage process. A steady savings record helps when applying for a mortgage. Savings can reduce the necessity for short term borrowing. It is important to avoid other forms of borrowing as much as possible when purchasing a property. The amount of loans you have when you apply for a mortgage will affect the mortgage amount.

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Legal Fees:

Solicitor's fees can vary so it is worth shopping around. Many solicitors charge 1% of property value plus 21% vat. You are likely to be charged for other expenses such as telephone charges and for any third party costs that may crop up, i.e. registry of deeds office or land registry.

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Home insurance

Home insurance is vital. All mortgage lenders in Ireland require that properties they are lending against be insured for fire and perils risk.. Most borrowers require that personal possessions, furniture etc., are insured. This is not compulsory from the lenders point of view but is advisable to cover potential risks.

Home insurance depends on:

  • Required insurance amount
  • Location
  • Contents Cover
  • Extra all risk cover

Discounts may be available depending on:

  • Age
  • Alarm
  • Smoke Detectors
  • Occupation
  • Security
  • Neighbourhood watch
  • If you home is occupied during the day.

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Surveyors Fees:

It is recommended that you employ a professional surveyor to check for any structural problems. The structural survey is usually not the condition of the loan offer. Shop around but use a reputable company and agree all fees in writing before the job is started.

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Valuation Fees:

The lender requires an independent valuation from a qualified valuer before they will issue a formal letter in respect of a property.

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Life assurance

Life cover is mandatory for all home loans. If you or a joint applicant dies during the term of the mortgage, an insurance policy covering death, is payable and repays your mortgage.

Premiums depend on:

  • Age
  • Health
  • Occupation
  • Smoker / Non-smoker

These factors vary from 1 insurance company to another.