Property prices are low and will inevitably rise. The markets did this in the late 80's. I wish I'd kept the 3 bed property I purchased in 1983 for 19,000 and sold in 1989 for 50,000. Subsequently there was a crash simillar to this. Who remembers that now? I just saw that house offered for 150,000. Wish I'd kept it.
If you have a good credit history and a small figure to use a deposit it's a great time. You can get a mortgage and unlike what the financial institutions would like you to think the mortgage deals are out there. They also don't need such a large deposit as they make you believe. Some family mortgages don't even need a deposit but more on that later. But what if you DON''T have a deposit? Easy to give up isn't it? Humm... you could do with a bit of lateral thought.
Maybe you can buy with friends. Bet you didn't know that 4 of you could be on the mortgage application but you all don't have to live there. . That's 4 incomes and only a quarter of what you believed you needed for a deposit. Similarly, if your parents have substantial equity in their house they could possibly release some to use as your deposit. You'd pay them back needless to say but it gets you started. The family mortgage as I suggested previously is basically a 100% mortgage but where your family guarantee the borrowings over 75%. This immediately takes the risk off the lender.
The difficulties of getting on the property ladder in the UK have been well acknowledged in recent years. Soaring house prices involve high deposits and high regular repayments. This means a particularly demanding challenge for those who are buying their very first house. First timers must look all over for a property they can afford and then find a mortgage from a bank or building society which suits their financial situation. Fortunately lenders recognise that successfully attracting new buyers can be helpful to them in the long run and so many have developed first time buyer mortgages.
A mortgage is basically a giant loan used to buy a property and a residence can be repossessed by a bank or lender if the borrower fails to keep up with repayments. Consequently it's important to pick the right product first time around. Historically fixed rate mortgages have been well-liked with first time buyers as the interest rate on the regular repayments is for an early period, often two to five years. This way the borrower is aware precisely how much they will have to pay from one month to the next and can be convenient for somebody who is getting to grips with a first mortgage and may until that time have been accustomed to set rent payments.
Another common creation on the list of first time buyer mortgages is the 100 per cent mortgage. In easy terms this calls for not putting down a deposit with a lender and borrowing 100 per cent of the property's value. It is considered that 100% mortgages, so called high Loan To Value (LTV) deals, are in part accountable for the over inflation of house prices, which of course then resulted in pricing out the first time buyer. Interesting though that these 100% deals are creeping back, but not as they once were. The lender will advance 100% BUT your mother and father or other person of means have to guarantee 25% of the loan in case you default on the payments. Mot bad though and a great way on to the property ladder if you are fortunate enough to have family help.
So, cheer up and start looking. It's a terrific time to buy!!
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