Home Buyers Guide

Chapter 2: Buying a Home During the Credit Crunch

Negatives of buying a home...cont:

• Bigger Deposits

In 2007, six mortgage lenders offered 100% mortgages. The bad news for first time buyers is that these mortgages have been withdrawn, so you will need to provide a deposit.

Depending on the lender, you’ll require a deposit of between 8% and 20%.

So a typical starter home costing €300,000 will require a deposit of at least €24,000 (or up to €60,000 with some
lenders).

Saving a deposit while paying rent has always been tough but the demands for even bigger deposits will make it more difficult for many first time buyers.

• Getting mortgage approval has become more difficult.

Even if you can sort out a deposit, you still need to qualify for a mortgage.

The problem is that getting a mortgage has become more difficult in the last 12 months.

At the peak of the property market, the banks made a lot of money from mortgage lending. It was so profitable, that in most cases the banks wanted to find a reason to give you a loan.

Things have changed and it appears that at least for the moment, most lenders want to find a reason not to give you a loan. They will only lend to people who are ‘sure things’.

What you need to do is to handle your money carefully and make sure you don’t give the banks a reason to refuse your mortgage application. 

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