3 Ways to Pay Off Your Mortgage Faster

For any homeowners out there, one of the biggest goals in life is to be mortgage-free. Once you have paid off your mortgage that’s it, you legally own the house, you no longer have to pay back the mortgage lenders, and you therefore will save a good few hundred Euros every single month. Not only that, but it’s also a great thing to brag to your mates about down at the pub. For some people, paying off the mortgage however, is a mere pipedream. For others, it is a very real possibility. To help show you how real it really is, here’s a look at 3 ways for you to pay off your mortgage faster.

Pay more each month

Let’s face it, with many properties costing more than one-hundred grand on the lower end of the scale, there are few people out there who could realistically afford to buy the house outright, there and then. Instead, they take out a mortgage loan and pay monthly instalments over the course of several decades, until the mortgage has been paid off, including interest. If however, you pay more than the minimum payments required each month, even by just 5o Euros, you’ll find that you have paid off the mortgage much quicker than you could have imagined. Many mortgage deals will allow you to pay extra each month, but if not, you can simply open a savings account, pay into that each month, and use that at the end of your fixed rate.

Cut back on unnecessary luxuries

Another useful tip for when it comes to paying off your mortgage early is to simply cut back on unnecessary luxuries, and instead set the money aside and use it to pay off the mortgage. If for example, you normally treat yourself to a coffee at a coffee shop on your way to work each morning, why not simply have a coffee at home before leaving? A regular coffee once per day may not cost much, but over the course of five days, the weekly cost adds up. Apply this same principle to a month, and even a year, and you could potentially have saved yourself a grand or more, which could be used to pay off the mortgage faster.

Find a better deal

When it comes to mortgages, many lenders out there are very competitive. This means that there are some great deals to be had. How the lenders make their money is by charging interest. The more interest they charge, the more you pay, and vice versa. If your current mortgage deal is at, say 3% interest, why not shop around and consider switching to a lender that charges 2% interest instead. Interest rates change constantly, and if you can find a long-term deal with a mortgage provider offering you a lower interest rate than what you are currently paying you’d be foolish not to go with them.

Car Finance and More – Tips for Buying a Used Car

When it comes to investments, used cars are probably not up there as being the wisest choice. Unless you purchase a classic or supercar, the second you drive the vehicle out of the showroom it loses value. The thing is, we don’t buy cars with the intention of making a profit when we sell them (unless you’re a car salesman).

 

We buy cars because they’re practical, they’re necessary in many cases, and they provide us with fun. Buying a used car is always a risk, even if you get the best car finance deal possible. To help ensure you get the best price possible, and the best car finance deal possible, here are some tips for buying a used car.

Don’t ask for their best price

A lot of people when attempting to haggle over a used car, will ask the salesman what his best price is for the vehicle. Basically, they’re asking him for the lowest price he would sell it to them. The thing is however, is that by doing that you are putting the salesman in control.

He can come up with any figure he likes, and obviously he’s going to overinflate the price because he wants to make as much commission as possible. Instead, be open and honest and tell him how much you are willing to spend. Be firm, stand your ground, and don’t get into a haggling war. If the salesman is convinced that you are not open to negotiate the price, there’s a good chance you’ll get it for what you want to pay, and on your terms.

Consider car finance

In an ideal world, when we buy a used car we’d always pay cash for it. The reality is that if you are buying from a car dealership, the car will cost thousands of Euros, so monthly car finance payments may be your only option. With finance you do pay slightly more than the vehicle is currently valued at, but it makes your monthly payments more manageable. Always shop around for car finance, as you may get some great deals.

Be friendly and polite

A lot of people like to think that they’re a big-time business tycoon in the board room, and so when they enter into negotiations over a used car they’re often stern-faced, abrupt, and sometimes rude. If you’re rude to a salesperson, or any person that you’re doing business with for that matter, they aren’t going to go out of their way to help get you the best price possible. Be polite, smile, and be friendly. You never know, it may help knock a few hundred Euros from the price that you pay.

Don’t be sucked in by the hard sell

After you negotiate a deal on a used car, the next thing you need to prepare yourself for is the onslaught of upselling the salesperson is about to hurl your way. The salespeople make good commission on things like: paint protection, upholstery protection, gap insurance, and so on, and they will do their best to convince you that you need all of these things. Stand your ground and be firm with the fact that, almost certainly, you don’t need these things.

4 Mistakes for First-Time Buyers to Avoid

When the time comes for you to fly the nest, as exciting as the prospect of buying your very first home can be, there’s also a lot for you to get your head around. First-time buyers in the UK find it much, much harder to buy a property than people born one generation prior. As tough as it is, it’s not all doom and gloom, as you can still purchase your first home relatively easily, if you know what you’re doing. To ensure you don’t fall into the same traps that other first-time buyers tend to fall into, here’s a look at a few common mistakes for first-time buyers to avoid.

Not shopping around for a mortgage

When you commit to making a hefty purchase, it doesn’t matter what it is, ideally you will need to shop around to ensure that you get the best deal possible. Well, the same goes for a mortgage. Not all lenders charge the same fees and have the same rates etc, and if you shop around and compare prices, you will certainly be able to get the best deal possible. It doesn’t matter whether you’re looking for a one bed studio apartment, or a 3-bedroomed detached property, if you compare mortgage deals, you can save yourself heaps of money.

Blowing everything on the deposit

One of the main reasons why first-time buyers tend to struggle to purchase a house nowadays, is because the properties require so much up front for a deposit. Although you can go lower than 10%, the general consensus is that a minimum of 10% is what is required when buying a new property. Once you have saved up the deposit, experts recommend that you wait even longer, and continue to save. If you blow all of your savings on the deposit, what happens if something goes wrong, or if you need a new bathroom, kitchen, or boiler? No matter how much you have saved, make sure you put a few thousand to the side, just to tide you over until you’re in and settled.

Forgetting about extra expenses

The reason why we told you not to spend all of your savings on the deposit for your new home is because of the fact that you will also now have to pay extra expenses. Yes, your mortgage payments will probably be the highest, but you’ve also got gas, water, electric, council tax, home insurance, and food, drink, and anything else you may spend your money on. With a little planning and organization, you can easily figure out how much you will need to spend each month to live, but just remember that costs can quickly add up, even for something as basic as an online streaming service to watch movies on.

Not seeing the big picture

If realistically, you know that you are going to want to live in your new home for at least 10 years, don’t just settle on a two-bed property if you are planning on starting a family. If you can realistically see yourself starting a family and needing more than two bedrooms, it may be best to hold off on buying the property you’re eying up, and looking at the big picture instead.

4 Surprising Facts About Mortgages

As you are probably aware, getting on the property ladder is one of the most rewarding feelings you will ever experience, and while testing, it is certainly more than manageable if you take the time to familiarize yourself with the process. Now, the mortgage industry and the property market has changed dramatically over the last few decades.

It is tougher for the younger generation to get on the property ladder, there’s no denying that, but there are plenty of options now available. Today however, we’re going to focus on mortgages, but not in the way that you may have thought. Here we’ll be taking a look at a few surprising facts about mortgages.

The word ‘Mortgage’ has dark undertones

Did you know, that the word ‘mortgage’ is actually pretty-macabre? The reason for this is that it is literally related to death. The word has French origins and is derived from the French words ‘mort gaige’ which literally means ‘dead pledge’. The reasoning for this is that, if you fail to pay your mortgage, or if you pay it off, your mortgage dies. How’s that for a nice and cheery way to start your day?

Having no credit score hurts your chances of getting a mortgage

In order to be considered for a mortgage, the lenders first need to have a rough idea of how careful you are with your money, and how well you can manage your finances. This is why they check your credit score. If you have a good credit score, this proves that you can pay your debts on time, and that you can manage your money. A low credit score tells the exact opposite. But did you know that having no credit score is just as bad, if not worse, than a low credit rating? It doesn’t matter how good you are with your money, if the lenders don’t know anything about you, how can they be expected to lend you a sizeable amount of money? The answer is that they can’t.

Red doors aren’t just pretty to look at

In a world where white UPVC doors reign supreme, it’s nice to see a little colour on people’s front doors now and then. If you ever see a red door however, the owner may not simply enjoy the colour. You see, in Scotland, and in many other parts of the UK too, homeowners paint their doors red when they have paid off the mortgage to their home. When buying your first home, rather than champagne, why not celebrate paying off the mortgage by painting your front door red instead?

A lot of people don’t understand mortgages

You’d think that once you bag your first job and legally become classed as an ‘adult’ you would immediately understand how mortgages work, as if by magic, it seems. The reality is that a large percentage of the population do not understand how mortgages work.

The Extra Costs to Consider Before Buying a First Home

It’s not easy to save up and buy your very first home. There are a number of other costs on top of the deposit that should be considered. We’ll go into detail on these extra costs to help you save up the real amount you need.

As a first-time buyer, you likely know you have to put together a deposit worth at least 10% of the purchase price for your desired house. If you were to buy a house at €300,000 for example, you would need at least €30,000 in savings.

There are also some other costs that need to be considered before banks will be willing to approve a mortgage application.

  1. Stamp Duty

Stamp duty is likely the highest additional cost you will face. We’ll look at the different stamp duty rates and how those rates apply to first-and-second time buyers.

 

Property Type Value Stamp Duty Rate
Residential First €1 million 1%
Residential Every extra €1 million 2%

 

This means a house with a value of €300,000 comes with stamp duty worth €3,000.

Things are somewhat different when purchasing brand new homes though. The stamp duty will still be the same, but the rate will be applied to the value of the property minus VAT. The VAT for new houses in Ireland stands at 13.5%. That means that you would only be paying €2,595 in stamp duty for a brand new property worth €300,000 – which is 1% of €300,000 minus 13.5%.

A bank will require, at the very least, that you have enough money put together for both your deposit and the stamp duty on a property before approving you for a mortgage.

 

  1. Solicitor’s Fees

It is up to solicitors to handle conveyance, meaning that they undertake all legal tasks necessary to make you the legal owner of a property.

A solicitor may charge a flat fee for this, or they may charge a fixed percentage of the property value, commonly 1 or 2%.

Shopping around can help, but you should expect to be paying anywhere between €1,500 and €3,000 (as well as VAT). When you get a solicitor’s fee quote, be sure to ask if the price being quoted includes VAT or not.

 

  1. Valuer’s Report

Your lender wants to be sure that you’ll pay a fair price for the property, so they are also going to request a valuer’s report. The valuer is there to estimate the market value of the property to ensure that you aren’t overpaying for the property.

 

Lenders will often have their own valuers they will use for this, but you will still be required to pay for their report out of your own pocket. This can cost around €150 plus VAT.

 

  1. Surveyor’s Report

Before purchasing a property, it’s worth having a professional surveyor put together a report. That report identifies potential structural problems or defects with the property including damp, dry rot, condensation, and pyrite.

Your lender may or may not require you to have a surveyor’s report, and a bad report doesn’t mean that you won’t get approved for the mortgage. It means you know just what you are buying before going ahead with the greatest financial decision you will ever make.

Put aside an extra €300 plus VAT for that report.

 

  1. Insurance and Property Tax

There are some other costs associated with owning your own home that you might not be used to having to pay if you’re renting your home or living with your parents. This includes home insurance, mortgage protection, and property taxes. These need to be considered.

Many lenders ask you to claim mortgage protection. It is basically a life insurance policy that pays off the reminder of the mortgage balance should you die. The cost of this mortgage protection depends on factors like your health levels, age, and the mortgage value. You can expect to be paying around €20-€30 each month for the duration of the mortgage.

On a similar note, lenders require you to have home insurance to keep the property and the contents of it safe from fires, storm damage, and other problems. A home insurance policy costs around €300 per year.

Many banks will offer their own home insurance and mortgage protection deals, but keep in mind that there’s no obligation to take these offers. You can – and should – shop around for a good deal.

The last thing to consider is property tax. Property tax is a self-assessed tax paid to Revenue, based on the market value of the property. Houses with a value of €300,000 will cost around €500 per year in property taxes.

 

Shop Around Before Making Decisions

If you’re still starting out with buying a home, or are considering switching mortgage lenders, don’t forget that you can use a mortgage calculator to estimate mortgage repayments.