Property prices are low and will inevitably increase. The markets did this in the late 80's. I wish I'd kept the 3 bed property I bought in 1983 for 19,000 and sold in 1989 for 50,000. After that there was a crash simillar to this. Who remembers that now? I just saw that property offered for 150,000. Wish I'd kept it.
If you have a good credit history and a small figure to utilize a deposit it's a great time. You can obtain a mortgage and contrasting to what the finance institutions would like you to believe the mortgage deals are out there. They also don't need such a large deposit as they cause you to 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 just need a little creative thought.
Maybe you can purchase 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 thought you needed for a deposit. Similarly, if your mom and dad have substantial equity in their home they could perhaps release some to use as your deposit. You'd pay them back of course but it gets you on track. The family mortgage as I suggested earlier is basically a 100% mortgage but where your family guarantee the borrowings over 75%. This just takes the risk off the lender.
The difficulties of getting on the property ladder in the UK have been well acknowledged in recent years. High house costs involve high deposits and high regular repayments. This means a very difficult challenge for those who are buying their very first property. First timers must look for a property they can afford and then find a mortgage from a bank or building society which suits their financial circumstances. Thankfully lenders recognise that successfully getting new buyers can be advantageous 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 house and a home can be repossessed by a bank or lender if the borrower fails to keep up with repayments. Consequently it's vital to pick the right product first time around. Traditionally fixed rate mortgages have been common with first time buyers as the interest rate on the regular repayments is set for an initial period, often two to five years. This way the borrower understands accurately how much they will have to pay from one month to the next and can be handy for someone who is getting to grips with a first mortgage and may until that time have been accustomed to fixed rent repayments.
Another common creation on the list of first time buyer mortgages is the 100 per cent mortgage. In easy terms this involves not putting down a deposit with a lender and borrowing 100 per cent of the property's worth. It is considered that 100% mortgages, so called high Loan To Value (LTV) deals, are in part responsible for the over inflation of house prices, which needless to say 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 fail to pay on the payments. Mot bad though and a great way on to the property ladder if you are blessed enough to have family help.
So, cheer up and start searching. It's a terrific time to buy!!
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