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Getting On The Property Ladder For First Time Buyers

 
 
 
 
  30 Jul 2016

First time buyers may feel as though getting on to the property ladder is an impossible task, but this is not the case. There are a number of options available for first time buyers to consider and there are many professionals who can offer support and guidance to people looking to buy their first time.

The most pertinent piece of advice on offer for a first time buyer is to save as much money as they can as soon as possible. Whether this is for a deposit or for the associated fees when buying a home.

A Shared Ownership Scheme

This is also known as a shared equity scheme and it provides first time buyers with the chance to buy a share of the property, usually between 25% and 75% and then rent the remaining share of the property back from the housing association or developer.

This means that you will not fully own the property at first, which can limit what you are able to do to the property, but this style of scheme often comes with the opportunity to buy out the remaining equity in the future. The obvious benefit of this style of scheme is that a lower mortgage or deposit is required from the start.

Buy with friends or with a partner

If you are unable to afford to buy a property by yourself, you may consider buying with a partner, friend or family member. This is most commonly undertaken between a couple but there are many instances where family members or friends collaborate to buy together. Having more than one person buying the property reduces an individual’s financial burden and requires each individual to provide a smaller deposit.

This can make it easier to generate the finance for a deposit and meet mortgage payments but of course, there is a need to ensure that all parties agree on the purchase and it could lead to issues at a later date if the different parties have different plans for the property.

The FirstBuy Scheme

The Government has received criticism for not doing enough to support first time buyers in the past and the FirstBuy Scheme is one response to this criticism. This is a scheme where the Government and house-builders offer a 20% loan. This loan is available to first time buyers and it provides applicants with the chance to make their way on to the property ladder without having to gather a sizable deposit.

The amount of loan on offer is 20% of the property purchase price, with a maximum allowance of £280,000.

A Guarantor Mortgage

One style of mortgage that is of interest to some first time buyers is a guarantor mortgage. This is where someone acts a guarantor on behalf of the property buyer, with the guarantor usually being a parent or family member. The guarantor provides confidence to the lender that the mortgage payments will be met, which means the mortgage lender is willing to reduce the interest rates on the mortgage or lend the loan amount in the first place. If the borrower fails to meet the mortgage payments, the lender will turn to the guarantor for the remaining payments.

Low Deposit Mortgages

In the first half of 2016, the Natwest caused a stir when they announced that they were bringing back 100% mortgages. Clearly this offer was not available for every buyer or even all first time buyers, but the news that 100% mortgages were available once again was met with joy by people looking to get on the property ladder.

There have been other mortgage providers who have been more willing to offer 95% mortgages, with the key benefit of these mortgages being the fact that the borrower is required to provide less of a deposit when buying a home.

Find out more about our mortgage services

If you are looking for free, impartial mortgage advice then we recommend that you speak with one of our in house mortgage advisers based on your personal circumstances.

 


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Jezzards Estate Agents



 

 

Jezzards properties Hampton

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