If you have a deposit,
but can't afford large monthly payments, another possible
solution might be to get an interest-only
mortgage. This is a mortgage type where the monthly
payments only pay off the interest, and you don't make any
payment towards the capital
sum .
Get a longer mortgage: Choose a mortgage
term longer than 25 years – it may seem daunting but
many lenders will offer mortgages with terms up to 40 years.
This may help you afford the lower monthly mortgage payments
that will result. The hope is that the property prices will
keep rising so when you come to sell you will be able to pay
off this longer tern loan. While, historically, property does
rise over time, it is not guaranteed.
Some
lenders will offer increased income multiples
– in other words up to 4 or 5 times your income.
Some
lenders even have schemes where you can borrow more than
the value of the property. Find
a mortgage broker who will help you locate these.
Look
out for other special deals aimed at the first-time buyer.
These might include lower deposits, better
terms or family
guarantor mortgage options.
Some
lenders offer special fixed-rate mortgages for first-timers
with low deposits (but remember that if the interest rate
goes down you could be left paying more).
This
is a growing trend. A recent survey has shown that around
57% of first-time buyers would consider buying a property
with friends.
Over
the last few years more and more high street lenders have
started to offer these which enable up to four people to pool
their income and jointly purchase a property.
Increase
your knowledge Gather together as much information
about mortgages and home buying as possible. OK you're already
doing that by reading this. But keep on doing it. It really
will help.
If you're not finding it easy to get a mortgage then your persistence
and information gathering is what will make the difference.
Research
property prices. Don’t rely on rumour and hearsay.
Find the lowest and highest average prices for the kind of property
that you’re after.
Research
mortgages. Don’t take the first deal you come
across. There are many kinds of mortgage, some aimed specifically
at first time buyers. Check them out and list the pros and cons
before making a decision.
Negotiate:
while it's important that you don't underestimate
the price of properties of the type and in the area
you want - nor overestimate what you can
afford - bear in mind that there may be a lot more flexibility
in the prices quoted than you think.
At the time of writing asking prices are being undercut by
20% or less. That's £30,000 on a £150,000 flat.
See Making
an Offer .
Try the DIY type sellers who are selling their own properties.
They may be more realistic than Estate Agents
Be realistic from the beginning and you’re
more likely to find a deal that suits you.
Next
solution for first time buyers...
Mortgage Help from The Government
The
government has expressed its commitment to make first time buying
easier. Currently there are three schemes. Keep an eye on these
and find out if anything is happening in your area.
Shared
ownership. The government initiative would share the
mortgage between buyer, government and lender. The details are
still to be worked out but this could provide an affordable
route to your first home.
Affordable
housing. The government is buying up land and exploring
ways of reducing the cost of building new housing so that it
can provide affordable homes.
Tax
incentives. The government has plans to increase the
stamp
duty threshold so that lower price properties aren’t
affected.
Key
workers. There are a number of schemes that make
first-time buying easier for key workers (health workers,
teachers).
Generally
speaking, the bigger the deposit
you can put down, the better the mortgage deal you can get
– and that means lower repayments. It is possible to
borrow 100 per cent – or more – of your property’s
valuation, but this won’t be cheap.
The higher
your loan
to value (LTV), the greater the interest rate you’re
likely to face.
If you
need an LTV of more than 90 per cent, your lender may add
a higher lending charge (HLC).
This can
also be called a mortgage indemnity guarantee (MIG), additional
security fee or mortgage advance premium.
For someone
borrowing £100,000, this will typically be in the region
of £1,500.
Or
you might borrow the deposit from your parents.
Recently
some innovative schemes have come onto the market allowing
you to offset parental income or savings against the loan.
Read more about family
guarantor mortgages.
Next
solution for first time buyers...
Look Further Afield / Move
If
you can move around there are still bargains to be had away
from the traditional property hotspots in the south and the
inner cities.
Look
at less salubrious areas or less popular regions.
Remember
that once you get a foot on the ladder moving on becomes much
easier.
The
more information you gather about the house
buying process and mortgages in particular, the further you’ll
be able to make your money go.
You’ve
made a great start by reading this, but keep it up.
Working
your way though the links on this site, will give you:
•
The knowledge to build a realistic picture of what you can
afford,
•
The information to track down the best possible mortgage deal
for your needs, and…
•
A clear understanding of the ins and outs of the purchase
process, so you can keep the costs – and the stress
– to a minimum.
You
should also keep an eye on the newspaper property pages and
read up on your chosen area.
The
better informed you are, the more confident you’ll feel
about negotiating with lenders and sellers to get what you
want.
That’s
why it’s vital to go through every single piece of paper
from your mortgage adviser, lender, surveyor and solicitor
with a fine-tooth comb.
And
don’t skip the small print – that’s where
the surprises lurk.
It
might seem tedious, but when everything’s done and dusted
and you’re installed in your new home, with your finances
and sanity intact, you’ll be glad you did it.
Graduate And Professional Mortgages
These
are mortgages aimed specifically at Graduates and professionals
(including teachers, lawyers, doctors) offering better conditions
than standard loans.
So,
while it is tough out there at the bottom of the property
market, it’s not impossible.
Explore
all the options and you may find it easier to get that first
mortgage that you thought. And remember, the market
is always changing.
Interest
rates, government schemes, regional values can all vary providing
opportunities for the informed buyer.
Want
to talk
with a mortgage adviser who specialises in helping First Time
Buyers?
We can put you in contact with a professional mortgage adviser
who will find
you your best mortgage. It's free and completely
confidential. Simply fill out the form below
'Fill
out the form Below and we will INSTANTLY send
you a FREE REPORT to potentially save £1000
off the cost of YOUR annual mortgage payment!'
TIME
LIMITED OFFER
Are you looking
for a new mortgage? Well you can spend time reading
this website and work it all out for yourself.
But to behonest
the quickest and best thing you can do is to get
a quote from an independent, regulated mortgage
adviser (NOT someone who is connected to a bank
or building society).
We can put you
in contact with a recommended
professional right now. Simply complete the quick
enquiry form.
Free
Report
In fact we are
so convinced that this is the best thing
for you that we will give you a special
report "The 7 Most Important Things you need to know TODAY before you choose your mortgage".
Your report is short, direct and cuts right to the chase.
So you won't have to waste time and effort reading any
waffle.
IMPORTANT NOTE:
The report will only be made available free of charge
for a strictly limited time. After that, we are
considering selling it as a package for £97.00.
So, if you do not request it now, there is no
guarantee it will be available tomorrow… or even
the end of today… for free.
Finally, please
don't worry. We're human too and hate spam.
So your personal info will only be used to get you your
best mortgage quote.
Your quote will be free. And there is no
obligation to proceed with anything at
all.
"Thank
you... the form was very quick. After many long
phone calls to various lenders - where I'd go
over the same details again and again - I was
amazed at how easy you made it. You've saved
me £1000's...."Peter
B, Leeds
