Wednesday, 27 November 2019

Getting On The Property Ladder As A First Time Buyer

Guest Post. 

Everyone knows buying a home is a highly problematic process in this day and age. If it isn't the deposit that takes years to save for, it's the mortgages and getting approved for one in the first place. 

Luckily there are ways to find a home that is perfect for you and at a price that doesn't mean huge expenses. 

keys in a front door

Housing Schemes that may help

There are a variety of ways people are getting on the property ladder these days, ranging from ISAs to part-buy part-rent. While each has its own pros and cons, considering all the options is going o be useful in working out what's going to work for you. So consider what is holding you back and the solutions in place to help you overcome these. 

Deposits are too large

This is a common problem for many people and in fact, it is probably what holds back most people from buying their first home for years. A good scheme that tackles this is shared ownership. 

Shared ownership involves buying a share in your home, rather than the whole thing and paying rent on the remaining portion. You start by taking out a smaller mortgage on 25-75% of the property's value to begin with, which can be gradually increased, meaning you only pay a deposit on this share. 

For example, a £20,000 deposit on a 25% share would be just £5,000. Rental costs are also reduced making it easier to pay in a way that is affordable for you. 

With plenty of new opportunities for shared ownership in Newcastle and nearby areas, there's never been a better time to make that first step. 

Unaffordable upfront costs

Legal fees, service charge and solicitors all come with a cost. The Help to Buy ISA could be a good way to save some money for this, as well as a deposit, creating a great foundation to begin building your savings. 

This government-backed scheme works by paying you an extra 25% on top of your savings. So say you save £4000, the government will add an extra £1000 on top to boost your savings. You can open these accounts with as little as you like or as much as £1000 and add £250 a month to start growing your funds. 

Struggling to get a mortgage

Getting any kind of loan is always a little nerve-wracking - anyone confronted with a load of automated websites deciding their fate would be a bit apprehensive! However, Help to Buy provides you with a good option if this is the case for you. 

Mortgage rates can be expensive and confusing but Help to Buy homes allow you to receive a 20% equity loan that has no interest for the first 5 years, giving you more time to pay and less of the stress. 

The scheme also involves just  5% deposit, so you're only looking to get a mortgage of 75% of the property's value and in London this Equity Loan is extended to 40% giving you even more opportunity to get on the property ladder (if you can cope with Southerners and the lack of chips with gravy!). 

So whether you're looking at a home through Shared Ownership Manchester or you've not quite made up your mind - don't feel like you have to rent forever. You can get on the property ladder wherever you like at a price you can afford.


1 comment

  1. I must admit I do worry about my children getting on the property ladder. It's so different from when I bought my first home at 21, houses were affordable back then, but now they can be eye watering compared to wages x


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