If you're a first time buyer, you'll need all the help and incentives you can get, whether financial or practical, to buy your first home. So just how should you go about making that all important first step onto the property ladder?
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By Caroline Bloor
4Homes Essentials
Property Search
UK Region Ratings
Has anyone told you how special you are lately? As a first time buyer, you are the heartbeat of the property market - vital to its health! You may have noticed that the government, estate agents and new home builders are doing their utmost to persuade you to buy, despite the credit crunch. But don't be pressured into buying now unless you can really afford it. If, however, you are ready to roll, you’ll be in a strong position to take advantage of the falling house prices and the increasing number of first time mortages.
It’s not an easy time to be a first time buyer - struggling to save for a home during a credit crunch. But unfortunately it's almost a necessity at the moment to have a 10 per cent deposit in order to get a mortgage (although there are some 95 per cent deals still around). 'The average deposit paid by first time buyers across the country is now nearly £20,000, leaving even dual income households hard pressed to find a deposit,' says Phil Jenks, head of mortgages at the Halifax.
Little wonder that 46 per cent of first time buyers under 30 are getting 'substantial' financial help from relatives, compared with just 10 per cent in 1995, according to the Council of Mortgage Lenders (CML). If it's an option, go for it. You'll have a significant advantage. The bigger the deposit the better mortgage rate you'll get.
'Or', says Dean Sanderson, Chair of the National Association of Estate Agents, North West. 'If you’re struggling to raise a deposit, ask the vendor to pay your deposit and legal fees for you rather than to reduce the price of the property.'
Don't forget the deposit isn't the only money you need to raise - you'll need to consider all the costs associated with buying (stamp duty, legal and removal costs, survey and mortgage arrangement fees and buildings insurance).
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