Saturday, 7 July 2012

First time Home Buyers

First time home buyers can often have a hard time attempting to figure out how to enter the property market due to the current credit situation and the fact that it is more expensive now than ever before to purchase a home. The average price of a home across the UK is now around £150,000, which also means that the average deposit for the home weighs in at £30,000. This can be quite intimidating to someone that wants to secure a first time buyers mortgage. There are ways to proceed however that can make a first time buyer’s mortgage possible for you and certain measures in place to help out first time buyers. One tip that you need to be aware of is new and is called the first time buyers initiative. The new initiative is aimed at helping first time buyers who are considered key workers with low income levels that make purchasing a mortgage difficult. If applicable the Government will pay 50% of the mortgage value and deposit, making it much simpler to purchase a home. Although buyers will be responsible for repayment after a year and will need to share the equity in the home after a sale, it is a great way to get a foot into the mortgage market. Another aid that was put in place in March of 2010 is the suspension of the stamp duty on all mortgages that are valued at under £1m. Given that the average mortgage is £150,000 in the UK, this will help nine out of ten first time buyers purchase a home. The only restriction in place to be eligible for the suspension of the duty tax is that you are a first time home buyer in the UK. Additionally, you also cannot have purchased a home in any other country. When you approach a first time buyer’s mortgage you should be aware of the different types of mortgage options that are available to you for your property. Among the most popular are shared mortgages, group mortgages, parent mortgages, pension income mortgages, family offset mortgages, and co-buyer mortgages. Each of these mortgages offers different terms and different requirements, which is why seeking the advice of a mortgage counsellor or advisor is always recommended for those who are new to the housing market. The last obstacle that most people will face when it comes to securing a mortgage is raising a deposit that is significant enough for a great interest rate on the mortgage. This can be a tough task which is why many people need to secure a co-buyer such as their parents or choose to enter shared group mortgages so that the deposit can be split or halved. Before entering such an arrangement you need to assess your options and decide if co-habitation will be possible with the people you have in mind. Another option is to simply save and cut back in order to raise the deposit or consider getting a loan in order to secure the mortgage deposit.

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