{"id":8364,"date":"2020-05-12T23:15:45","date_gmt":"2020-05-12T23:15:45","guid":{"rendered":"https:\/\/staging.twentyeleven.co.uk\/?p=616"},"modified":"2022-04-01T12:02:34","modified_gmt":"2022-04-01T12:02:34","slug":"how-to-get-onto-the-property-ladder-as-a-first-time-buyer","status":"publish","type":"post","link":"https:\/\/senateproperty.co.uk\/?p=8364","title":{"rendered":"How to get onto the property ladder as a first time buyer"},"content":{"rendered":"

Yet that\u2019s not the same as saying it\u2019s the best time to buy a house.<\/strong>
\nSo examine your own reasons for buying. If it\u2019s a long-term place to live, to give you security of tenure, and the repayments are affordable (possibly even cheaper than renting) it’s a reasonable aim. Here\u2019s what you need to know\u2026
\nStep 1. Deposit, deposit, deposit.<\/strong>
\nEvery 5% bigger deposit up to 40% cuts the rate \u2013 so a little more can have a big impact.
\nImagine you’ve a \u00a3150,000 home and want a \u00a3136,000 mortgage. That’s a 90.7% LTV, the top two-year fix is 3.98%. Yet if you use \u00a31,100 of savings to reduce the borrowing needed, you’d cross a threshold and be at just under 90%, where the top two-year fix is 2.69%. This would save over \u00a3700\/year in mortgage payments alone.
\nSaving for a deposit is often a struggle. But from autumn you\u2019ll be given the chance of a cash boost towards buying your first home through the new Help to Buy ISA.
\nYou can save up to \u00a3200 every month and the Government will add 25% on top (so \u00a350 on \u00a3200). You can also save an additional \u00a31,000 when you first open it, so you can save \u00a31,200 in the first month (\u00a3300 will be added on top).
\nThe minimum you need to have saved to get the bonus is \u00a31,600 (so a \u00a3400 bonus), and the maximum the Government will contribute is \u00a33,000 (so you will have saved \u00a312,000). Yet don\u2019t open a normal ISA if you think you want one of these.
\nStep 2. Don’t fall for ‘Help to Buy Mortgage’ branding<\/strong>
\nWhile much hyped, the main Help to Buy scheme (ie, not the original only for new builds) is about the Government giving LENDERS a guarantee to enable them to offer more 5% deposit mortgages, meaning more are available. If you’re looking for a 5% deal, it makes no difference to you whether it’s a Help2Buy or not. Just go for the best available.
\nStep 3. Speedily compare to benchmark your cheapest<\/strong>
\nIt\u2019s important to work out the exact cost you\u2019re likely to pay as soon as possible. Mortgage rates are currently the lowest they have ever been, with five-year fixes below 2% (if you\u2019ve a big enough deposit).
\nWhile there\u2019s always the chance they could get cheaper, there\u2019s not that much room to fall, yet there\u2019s far more room for them to rise in future.
\nTo find a mortgage, look across the whole market if possible. A number of lenders like HSBC, Yorkshire BS and Tesco Bank only sell their mortgages direct, and these may be missed by mortgage brokers. So start by doing a comparison that includes all deals. Martin\u2019s Mortgage Best Buys Comparison<\/a> does this as do Money Facts<\/a>.
\nStep 4. Two things that can kibosh your application<\/strong>
\nThe days when lenders flung out deals to all and sundry are long gone. Getting accepted is now a challenge \u2013 I would suggest you start preparing at least a year in advance.
\na) The credit check. It’s crucial to manage your credit score, eg, never make late payments, minimise other applications, put a landline and not a mobile on applications.
\nb) Affordability checks. Lenders must stress-test whether your mortgage is affordable even if rates were 6-7%. They’ll want evidence of income, big bills, expenses, even eating out. So being frugal in advance helps.
\nOne way to navigate through these checks, is to use a top mortgage broker \u2013 search for one using Vouched For<\/a> or Unbiased<\/a> \u2013 they have info on how harsh each lender’s checks are, and can help ease acceptance. You\u2019ll generally pay a fee for face-to-face advice, though brokers like London & Country<\/a> operate fee-free via the phone (they get a fee from the lender).
\nStep 5. Fixed or variable?<\/strong>
\nWith a fixed mortgage, the amount you repay is, er, fixed, so it’s like buying an insurance policy against possible rate rises. Variable deals move with UK interest rates. Currently you only pay a touch more to fix.
\nIt’s very difficult to predict future interest rate moves. Even top economists are singing a different tune now from a year ago, and there’s even the possibility they may fall before that. So focus on your own situation.
\nThe more important the security of knowing exactly what you’ll pay is, the more you should hedge towards fixing (and fixing for longer). If cracking the rock-bottom deal’s your driver, hedge to short-term trackers.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s perhaps the cheapest time in history to get a first time buyers\u2019 mortgage \u2013 with rates at historic lows and the new Help to Buy ISA due.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wds_primary_category":0,"footnotes":""},"categories":[58,67],"tags":[34],"class_list":["post-8364","post","type-post","status-publish","format-standard","hentry","category-advice","category-buying-selling-your-home","tag-null"],"_links":{"self":[{"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/8364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8364"}],"version-history":[{"count":2,"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/8364\/revisions"}],"predecessor-version":[{"id":9897,"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/8364\/revisions\/9897"}],"wp:attachment":[{"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/senateproperty.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}