Overall, the standard deposit on secondhand properties is 10%, although this is generally lower on new properties. However, in the current market, a 10% deposit can equate to 32,000, whereas on a new property, deposits can vary from 10,000 upwards.

How much can a first-time buyer expect to borrow?

In the old days, banks had a relatively simple calculation that determined how much first-time borrowers could borrow. They simply multiplied the main earner's income by three, and the secondary income by a lesser multiple. Generally today, banks apply what is referred to as the DebtService-Ratio rule. Banks look at the applicant's income and then factor in both how much they want to borrow and if they have other loans outstanding. If the total cost of the mortgage payment and the total cost of other debts (car loans, credit card balances, etc) are less than a certain percentage, generally 35% of net disposable income, then the mortgage is approved. The more consumer debt you have, the less mortgage you qualify for. But when all else is factored in, first-time buyers can expect, as a general rule, to borrow four and a half to five times their income.

What kind of paperwork should buyers have ready before homehunting?

First-time buyers will need to have all proof of current earnings, typically three recent payslips, and a P60 plus a salary certificate from their current employer.

Self-employed applicants will need audited accounts/ accountants' reports, and confirmation of tax affairs/ statement of affairs.

Banks will also need to see bank statements (current account), loan statements (if applicable) and proof of savings. Copies of household bills and proof of income will also be necessary.

What happens when you're refused a mortgage?

There are now some mortgage providers who will accept first-time buyers who may have been experiencing problems getting a mortgage, but their rates are higher than standard mortgages. Their loans can be refinanced within a few years when credit is established. However, it's very important for potential buyers to develop a good credit history, and to remember the importance of paying all of their bills on time every month.

Is a longer mortgage a good idea?

Longer-term mortgages reduce the cost of monthly repayments for first-time buyers. For example, using the example of a 300,000 mortgage, and an interest rate of 4.1% (ECB + 1.1%), the monthly repayments on a 20-year mortgage would be 1,833 per month, while on a 40-year mortgage, the repayment would be 1,273 . . . a 31% difference. However, longer-term loans increase the total cost of borrowing. For example, if the first-time buyer were to keep that mortgage over the 40-year term, they would pay 39% more in interest charges over the 40-year term when compared to the 20-year option. If a first-time buyer avails of a 40-year loan to keep their monthly repayments lower in the initial years of the loan, they may want to consider refinancing to a shorter-term loan when they are more settled and earning a little more income.

Should buyers be nervous of increasing interest rates?

Nobody likes to have to pay more for anything and rising interest charges as a result of increasing interest rates is no exception. However, banks do fistress-testfi all loan applicants to factor in an increase of 2%. Ireland has been experiencing generous wage increases which will dampen the effect of rising interest rates. Internationally, particularly in the US, it is well documented that rising interest rates tend to affect disposable income purchases first whereas employment tends to affect housing, and Ireland continues to experience exceptionally strong employment.

Is it worth attending a first-time buyer seminar?

Our seminars cover three main areas which many young buyers find very useful. We discuss issues around choosing the right property, arranging finance and legal aspects of buying a home. The seminars also give firsttime buyers access to finance and property experts and a solicitor, who are on-hand to answer questions.

The Irish Mortgage Corporation is bringing out a new free 'Guide to Buying a First Home', and will be running seminars on 28 September, 19 October and 23 November