The days have gone of the 100% First Time Buyer Mortgage but there maybe other options that can help you get on the property ladder.
This handy guide will help you get a First Time Buyer Mortgage with a low deposit
Five Percent Mortgage
Majority of lenders will now offer 95% Mortgages to first time buyers this will typically mean that on a £200,000 house you will need to put down just a £10,000 deposit. This may seem a lot to some people but when we look back just a few years ago, with the same purchase price of £200,000 most Mortgage lenders were asking customers to put down at least £20,000.
The five percent Mortgage has opened the door to many customers to get on the property ladder but, bare in mind that the Mortgage interest rate will be slightly higher than a 10 or 15% Mortgage.
Help to Buy Mortgage
Help to Buy has been going strong for a few years now, previously there were many forms of Help to Buy, but thankfully the Government have made the process more simpler for you as a customer and for me as a Mortgage Broker.
Help to Buy shared equity Mortgage as it’s known is where you contribute a 5% deposit towards the purchase of a new property. The Government will then contribute an additional 20% towards the deposit. So in theory you will be applying for a 75% Mortgage.
You may be rubbing your hands at getting up to £120,000 in deposit monies, however, the Government will only give you this money interest free for the first 5 years, then from year 6 onwards you will pay a interest only payment every month.
Just be aware that the monthly payment is only interest and this is calculated using Retail Price Index (RPI) + 1%, you will not pay any capital back unless you voluntarily pay more. A Help to Buy Mortgage could be a great way to get on the property ladder if you have ever had credit issues and have struggled to get a 5 or 10% Mortgage.
"The best time to buy a home is always five years ago"
Guarantor Mortgages
Yes, believe me now Guarantor Mortgages are still around however, they have had a face lift over past year or so.
Some lenders have recently entered the Mortgage market with products specific for ‘guarantors’
Guarantor Mortgages will allow you to use a relatives income, cash or property to help support a Mortgage application.
This can be particularly useful if you have a sizeable deposit but can’t get the amount of borrowing you require to purchase your dream home in your prefect location.
One particularly lender will give you a 100% Mortgage under their guarantor terms; if your parents own their own home outright!
Guarantor Mortgages are only right for certain customers so speak through your requirements now to see what is the best advice for you.
The Mortgage market has changed so much over the last few years and flexible Mortgage criteria is not uncommon. Speak to Bristol and Bath Financial Services for the right advice. Contact us now through social media or email me here