There hasn’t been a harder time than in the past few months for those looking for a first time buyer mortgage with rising house prices and the credit crunch has caused lenders to tighten their lending requirements and cancel and reduce the number of mortgages they offer. There is only currently only one 100% mortgage lender on the market making it hard for many to get the first steps on the property ladder.
Mortgage rates are starting to return to levels very similar to those before the credit crunch and should set to get even more competitive however first time buyers are disadvantaged by new tougher conditions mortgage lenders are introducing with their mortgages.
To get a decent rate you need to either have a sizeable equity stake in a property (obviously counting first timers out) or have a fairly large deposit to put down on a new home.
However don’t worry things are getting better as mortgage lenders re-enter the market and property prices have come down, on average by £20,000, making it possible for many more to buy and afford repayments.
Before you commit to buying a mortgage you should think carefully – is it the right time for me/us to buy? Should I/we save a little longer? Saving for a bit longer will mean your choice of mortgages will be better as you are able to offer a higher deposit, easing lenders concerns who will in return offer a better interest rate, possibly saving you in the long term by renting for just that bit longer.
Once you are ready to start your property search, a good place to start is with a mortgage broker. A good mortgage broker will take time to understand your requirements and should search the whole of the market to find the best
first time buyer mortgage for you. Many offer free, impartial advice so you can see what you can afford, what is available to you and how much you can borrow for your property. They should also be able to offer expert knowledge of the market and have experience to be able to recommend a lender when you have a choice between a few.
Start your search now to see if you can jump into the property market.
