SEARCH From over 300 features and guides on this site
PROFIT FROM PROPERTY
First-Time Buyers: How To Finance Your First Home
Getty Images
Buying your first home? There’s nothing guaranteed to take the edge off the excitement more than a slowdown in house prices, a credit crunch and mortgage lenders playing hard to get, is there? But don’t let that put you off…there are schemes and stratagems aplenty if you know where to look.
How To Get A Deposit
There’s no point sugaring the pill. You will be much more attractive to mortgage lenders if you have a deposit to put down. It will also provide a cushion in case properties fall in value this year.
The mortgage deals that allowed you to borrow more than the value of your property have gone. And although there are still some lenders offering 100 per cent and 95 per cent mortgages for now, high loan to value mortgages are likely to be more expensive. The bigger the deposit, the better the interest rate.
Can Your Parents Lend You A Deposit?
Parents seem to be increasingly resigned to bailing out offspring wrestling with student debt, the high cost of living and high property prices. Research from Abbey shows that already one in seven first-time buyers are now given money from their parents to invest in their first home*. And one in 17 borrows money from parents, with the average loan standing at £19.619! It’s worth a try - they may be keener than you realise to get you to move out.
Clubbing Together To Buy A House
It’s very popular now for first-time buyers to boost their buying power by looking for property as a couple. In fact, joint ownership mortgages are available for up to four people (although lenders tend to lend on multiples of the two highest incomes). Lenders have become much more relaxed about who you can take out a joint mortgage with - family, friends, even a stranger looking for property to invest in.
But anyone considering a joint mortgage should ideally rent together first to make sure they really do get on and get a legally drawn up co-habitation or joint ownership agreement when they buy. You need to be clear what happens if someone loses their job, moves a boyfriend in, deposits, what belongs to whom, etc.
For more about sharing, click here.
