interestschemeseveryone.general

There’s a lot of interest being shown in a totally new shared-equity mortgage, which will hopefully help a wide range of first time buyers to get into the property market.

Shared equity is not new and schemes have been around for some years which mainly involve housing associations but these were designed for the needs of low income tenants and council tenants.

A new government scheme called Homebuy which will allow property buyers to raise a mortgage of 75% and the balance of 25% will belong to lenders, the government or social landlords, such as housing associations. An innovative part of the scheme will involve the government owning 12.5% of the property, and the lender owning the other 12.5%. The purchaser will pay rent on the share owned by the third party. The Halifax, Yorkshire and Nationwide building societies are committed to the scheme but it is expected that others will get involved.

This help will still not reach everyone. Homebuy is designed to help people such as council tenants, and key workers, such as teachers and nurses wishing to buy their first home.

For a scheme to help everyone, it looks as though Advantage, owned by the US investment bank, Morgan Stanley, has come up with the answer for first-time buyers with its new Flexishare shared-equity product.

At the outset, Flexishare will be two year fixed rate mortgage. There will be a requirement for a 5% deposit and the loan will be split between a normal, conventional mortgage and something called a residential ownership loan, which can be between 15% and 35%. The interest rate on the loan is designed to be low, 3% has been suggested, but no decision on that has been made yet.

Loan repayments will be interest only and because that rate is planned to be lower than that of the mortgage, the total outgoing will be less than if the total loan was on a mortgage. I should look tempting to buyers who can’t meet the expense of a standard mortgage. As long as borrowers pass Advantages credit score, they should be eligible for the scheme.

Advantage will share in any rise or fall in the value of the property, as part owner.
This seems to be the answer to their prayers, for those who are unable to get a mortgage in any other way. The mortgage industry has shown a lot of interest in the scheme and if all goes well, no doubt other lenders will follow suit.

Schemes like this are coming about because house prices have risen appreciably in recent years. In some areas property prices have doubled in six years. A slight worry is that if schemes like Advantage’s become widely available, price increases could be pushed even higher.

The general feeling amongst the experts seems to be that house price growth will slow down in the near future and hopefully remain low for some time. This would certainly offer some hope to would-be first-time buyers caught in a spiral of ever-rising prices. The best plans for saving that necessary deposit easily gets over-taken by rising house prices.

For up-to-date advice and information on these house-share solutions the best plan of action would be to contact a broker, who will know if the product is right for you. The internet is a good place to look and brokers are able to offer special internet rates for some products. They’ll certainly be able to help will be pleased to hear from you.

Michael Challiner
http://www.articlesbase.com/mortgage-articles/mortgages-fair-shares-51594.html

Technorati Tags: conventional mortgage, council tenants, credit score, first time buyers, fixed rate mortgage, housing associations, investment bank, loan repayments, mortgages 8211 fair shares, year fixed rate mortgage

significantlyindustrystatements,figures

There has been no secret made of the fact that UK house prices have risen over recent years, and many home owners have benefited significantly from this. The rise in home values has meant many people have been able to free up cash tied up in their properties whilst sill owning a significant amount of equity to make them comfortable with this. Combined with the relatively low interest rates this has been a dream come true for home owners. The boom has even meant record numbers of people borrowing against their homes to lay down deposits against holiday homes or buy-to-let properties, gaining doubly from the rising market, and having the effect of further fuelling price increases.

Although industry experts don’t seem to be able to decide whether the boom is over or not, and the case can be argued differently depending upon different geographical areas. It would certainly appear that over the last 12 months or so, the growth has in general slowed.

Whilst the boom may have been the best thing that has ever happened financially for existing homeowners and those lucky enough to have bought first and second homes at the right times, it is not so good news for first time buyers. The overall increase in prices has not only increased the average house price in the UK significantly, but it has dragged the bottom end of the market in particular to new heights making that first step on to the property ladder as difficult as ever for first time buyers. The burden is especially difficult for University Graduates who not only face the likelihood of having to move towards the cities to find the right sort of employment, meaning that in many cases they can’t even seek the solstice of a family home for a while whilst they find their feet, they are carrying the millstone of student debt around their necks whilst they do so.

The above statements, I believe are a fair summary of the state of the UK housing market and the problems faced particularly with first time buyers today, but let’s now analyse the facts to see where people really stand in 2007.

Year Average Salary Average Salary

(Population) (22-29)

1997 £16,250.00 £14,336.40

1998 £16,842.80 £16,286.40

1999 £17,503.20 £17,071.60

2000 £18,189.60 £17,799.60

2001 £19,182.80 £19,026.80

2002 £20,004.40 £19,827.60

2003 £20,467.20 £20,098.00

2004 £21,507.20 £18,652.40

2005 £21,985.60 £18,834.40

2006 £22,926.80 £19,224.40

Year Average House Multiple Multiple

Price (Population) (22-29)

1997 £78,199.00 4.81 5.45

1998 £84,396.25 5.01 5.18

1999 £93,609.00 5.35 5.48

2000 £106,960.00 5.88 6.01

2001 £118,604.50 6.18 6.23

2002 £136,635.25 6.83 6.89

2003 £155,226.25 7.58 7.72

2004 £178,136.25 8.28 9.55

2005 £188,565.75 8.58 10.01

2006 £192,831.33 8.41 10.03

Source:

Average salary figures taken from www.statistics.gov.uk

Average house price figures 1997-2005 taken from www.proviser.com and 2006 figures from www.communities.gov.uk (figures are averages of all completed sales during the stated time period).

In 1997 the average house price in the UK was just over £78,000 with an average salary of £16,250 for the general population, and £14,336 for 22-29 year olds – typical first time buyers. The average house price in 1997 was therefore 4.81 times the national average salary and 5.45 times the average salary of a 22-29 year old. A 10% deposit for a 22-29 year old on the average salary buying an average house in the UK would have represented 54.5% of a year’s gross pay. Although clearly a struggle, the prospects of couples in particular finding their way onto the housing market was good.

Looking at the same comparison for 2006, the average UK house prices was just under £193,000 – an increase in 10 years of 147%. The average salary for the UK population had also increase to just under £23,000, and increase of 41% and to just over £19,000 for our 22-29 year old demographic – an increase of 34%. Incredibly, the average house price in 2006 was 8.41 times the average salary of the UK population, and over 10 times the average salary for our 22-29 year olds. A 10% deposit now represents almost exactly one whole year’s salary on average.

These figures clearly demonstrate that the lifestyle and expectations of the UK population has had change forced upon it. Being able to afford a house on a graduate salary straight out of University is a pipedream only possible for the very luck few.

Where does this lead everybody else?

One of the catalysts behind the increase in prices in the housing market as previously mentioned is the increasing number of ‘buy-to-let’ properties purchased by those lucky enough to see the values of their own properties increase. It would seem logical that the rental demand for these properties has also increased as the would be first time buyers can now in general only afford to rent and often to seek out suitable housemates to share their rented house or flat with.

A good source of housemates can be found at sites such as www.abodewithme.com which has grown as an aide to home seekers who in today’s economy simply cannot afford the luxury of their own place.

Another option for would be ‘first time buyers’ is to get on the property ladder by purchasing part of a property. At least in paying a mortgage instead of rent, even though a property is not entirely in an individuals name, will at least allow them to benefit from any further rises in the property market, leaving them lagging further behind in their rental properties.

There are several ways of purchasing part of a property and renting the other part with an option to buy in the future, although these such arrangements often mean paying a mortgage and rent, which will cost nearly as much as a mortgage to cover the full value of the property.

I read recently of a leading high street bank offering joint tenancy mortgages for up to four applicants. This means it is possible to buy a property with three others all contributing their earnings towards the total borrowing, and each taking an agreed share of the value – and the increase in value of the property. This seems incredible, given that most of us find it hard enough finding one person that we are happy to make the commitment of marriage to, and as they say, marriages are easier to get out of than mortgages.

Again, it raises the question as to how to find suitable candidates that you would be willing to take the plunge of buying a property with. Some people will be lucky enough to have long standing friendships, or perhaps relatives, brothers, sisters, etc., who are also looking to get onto the property ladder but cannot afford to do so alone. Short of this, highly recommended would be a website such as who has profiles of all sorts of people with varying budgets, all over the UK, and equally as importantly wanting to enter into the same type of partnerships.

Regardless of the route that individuals choose to take, whether to rent or buy, the state of the property market compared to average salaries as we have seen means more and more people will be living in house shares for many, many years.

If you would like to find out more about candidates looking for house or flat share companions, please visit .

Lee Unsworth
http://www.articlesbase.com/relationships-articles/what-is-the-impact-in-the-rise-in-the-housing-market-on-first-time-buyers-98841.html

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difficultstrongerpredictedsizzling

For Buy to Let market, the last few months have been difficult for the landlords with the credit crunch came increase on arrears, lack of buy to let mortgages and tougher lender’s criteria. But it is not all bad news, the houses are cheaper to buy, the rents still increasing and rental demand at all time high.

Credit Crunch

Last year, we started to see the effects of too much borrowing and declining in house prices in USA. One year later, economies throughout the world started to collapse, financial institutions going into administration, Governments in the verge of bankruptcy, mortgage lending at very low levels, UK house prices coming down and a global recession.

It’s all bad news, no! The buy to let market is stronger than ever with the demand for rental properties being higher than ever, due to first time buyers not moving into the ladder and immigration from east European countries.

Within a dreadful situation, we can always find good opportunities.

2009 New Year, New Hopes!

It will be into 2009 that we shall see some improvement on the lending, specially buy to let mortgages.

It’s been predicted the houses prices will still coming down but at much lower pace and probably in 2010 they may start coming up.

For the landlords it’s a time to consolidate and review their portfolio with great opportunities to invest if you are in strong position.

Buy to let Market

Between 2004 and 2006 the buy to let boomed, due to easily accessible buy to let mortgages and property prices growth. Now the buy to let mortgage diminish, tougher lenders’ criteria, specially rental cover, and house prices are coming down. 

Buy-to-let is no longer sizzling and many investors that started being a landlord in recent years are struggling as mortgage rates rise. Many could not change mortgages due to low or negative equity, so when the initial rate deal came to an end and they started to pay the Standard Variable rate of the Lender,  the rent was not enough to cover the mortgage payments.

Within the most affected are those investors who bought properties at a suppose discount to sale straight away, looking for short term investment but when properties prices started to come down and the houses taking longer to sale, they run to serious problems.

The golden rule of buy to let investment is to look as a long-term investment, taking seriously. If the landlords invest wisely, look at long term, do the homework and stick to the tried and tested method of investing for rental returns rather than capital growth, they will be successful. Otherwise, the investor will probably run into serious problems.

Buy to let investment does not guaranteed success as any other investment but doing it well and it can be an excellent piggy bank for retirement.

I am leaving now some tips for all professional or first time landlords:

Do your homework
If you are a first time landlord look at pitfalls before you look at the benefits, buy to let investments are time consuming, therefore think if it is the right time to invest in buy to let or leave the money on a good savings account.

If you are already a seasoned landlord, do not stretch yourself, look first to consolidate and add strength to your portfolio, as if you are in stronger position your next investment  will run smoothly.

Location, Location, Location
It pays to choose carefully where your next buy to let property will be. This does not mean to buy on a cheaper or expensive location but rather the rental demand in the area. Look for clues like if is near a University or Hospital, very trendy area for professionals, excellent amenities and links, etc.  Avoid all cost areas with oversupply of properties to let, look at properties and letting agents’ websites and if a certain area has numerous properties to let, think if you want that kind of competition as you may have to negotiate the rent down to let the property.

Look at the figures

Before you buy, take a look at several properties, writing down the ones are of your interest. Look at the rental yields on them, see if the rental income covers at least 125% of the mortgage payments and if worth to spend around 25% on a deposit, this will help you to secure finance and a good rental yield.  Many lenders restricted the Loan to values to 75% or less and rental cover to 120%-125%, you can still arrange products with less rental cover but think if you want to restrict your rental yield.

Your target tenant

Think who will be your tenant and imagine in his shoes? If you are student you like a place to be comfortable and clean, links to university, nothing luxurious. If you are a professional you will be looking at a modern and stylish interior but nothing too pretentious, and excellent links. If it is for a family rental, do not put any furniture in, leave as a blank canvas, normally over the years the family has a few belongings they want to take to the next property.

Look into your portfolio

Review your portfolio, see if the initial rate deals in any of the mortgaged properties ended and compare the rate you are or will be paying with the rates currently in the market. If you are better off with the lender’s Standard Variable rate, does not mean you stop looking for a better deal. Try to look once a month for new rates or ask to your adviser to keep an eye on the products.

See if there is any opportunity within your portfolio to get a higher rental income. Why not transform a house with 3 bedrooms, 1 dining and 1 living room into a 4 bedroom house with living/dining room; make a loft conversion/extension to get 1 or 2 more bedrooms; renting by the room, as by the room the rental income is normally higher (but must be on right area). The possibilities are immense to add value to your portfolio and increase your rental income without spending as much money as buying another property. 

Look at other areas
Most Landlords invest where they live but most of the good opportunities are normally in other areas.  Do not be afraid, as if you follow the golden rule, can be very time consuming investing areas away but can be worthwhile.

Ask for a discount

When you buy an investment property, you must not forget you enjoy the same benefits of a First time buyer – No chains, so you can move quickly.  If you do not ask for a discount you will not have it.

Avoid Tenancy pitfalls

Put aside at least 2 months of rent, in case when your tenant move out or when you just bought a property  will help towards the mortgage payments until you find a tenant.
Worth paying for a complete tenant check report, where the provider will get you a credit file of the prospective tenants, check their ID, get the references and they are not expensive.  It is not guaranteed you will be good tenants but helps a lot.  Also, you should consider a rent guaranteed insurance, where can cover for rent arrears, pay towards the legal costs to evict the tenants and damage made on the property. With this type of insurance you may request a lower deposit from the tenants to match the excess of the insurance, that may help to secure a tenancy quicker.  

Shop around

Shop around for letting agents, ask a discount to traders: plumbers, furniture. The more you save the higher will be the return from the investment.

G M

Buy to let mortgages

Buy to let rates

G Mateus
http://www.articlesbase.com/mortgage-articles/buy-to-let-and-the-credit-crunch-market-mortgagestips-792945.html

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thinkingmortgages

My boyfriend and I are thinking of buying our first home, I’m a student, therefore minimal income (until summer 2008), he works, and we know nothing about buying property. We started saving up recently and have a few hundred pounds but from now on we want to start saving more every month until next year, when we want to get a mortgage.

I have seen banks offer mortgages with 0% deposit required, should I be wary of these? How about interest only mortgages? There’s so many types of mortgages, it’s hard to figure out the advantages and disadvantages of all.

Apart from a deposit, what other kind of money allowances should we make (I know we should put money aside for stamp duty, furniture and repairs/diy for the new house). Is there anything else we should think about?

Any other useful information?

Thanks!
By the way we do live in England. Someone in another board told me about first time buyers classes that are available, I’ve had a search on the web and haven’t been able to find much in my local area (Buckinghamshire) has anyone else heard of these?
Yes, I we fairly young (23 and 24), but my boyfriend and I have been together for 6 years so we have had a while to think about taking this step, it’s just the financial side that’s the scary bit!

OK.. here’s my thoughts.

First: A mortgage is going to be a 30 year commitment. This means that for the next 30 years you will be committed to working for and paying for a home that will be co-owned by your boyfriend. You haven’t made the commitment for marriage.. how can you make the type of long term financial commitment that will affect your credit and financial well being with out a strong commitment (ie marriage) to your partner? I would work this out first.

Now.. let’s talk about first mortgage. Understand that a 0% down mortgage is financine 100% of the value of your home. This means that from day 1 you will have absolutely no equity in your home. Therefore you will owe more than the home is worth for at least 5 years or more and then after that only have a very small amount of equity. Therefore if you decide to sell the home in less than 10 years you will lose money in the investment unless the real estate market rises a lot in that area. This feeds into the first statement I made above.. let’s say you two buy this home (no marriage) then the relationship falls apart and he moves out. If you can’t make the mortgage payments and he doesn’t provide you with assistance.. you lose the house and both of your credit ratings will be destroyed. Simply because you won’t be able to sell the home for what is owed and you won’t have the cash to make up the difference.

When it comes to a new home purchase here’s my formula for success:

1. Have at least 10% for the downpayment.
2. Have the full amount needed for all closing cost.
3. Have enough money available for any needed repairs that will need to be done prior to move in.
4. Have enough money available for any furniture, appliances, etc that you might need when you move.
5. On top of 1 through 4, have at least a month’s and a half mortgage payments in a saving account that you can draw on should a problem arrise that affects the financial stablity.
6. Work out a budget prior to buying the home. Include in this budget the mortgage payments, homeowner association dues, increase in utility payments, repairs etc.
7. Request your credit report and credit rating. Resolve any and all problems there that you can to push your credit rating as high as possible.
8. Shop around for a lender with the best terms.
9. Get a pre-approval letter from the lender with your maximum available loan amount.
10. Use a realator unassociated with the seller of the home you are wanting to buy and unassociated with the lender you have selected.

Hope this helps and good luck!

Technorati Tags: advantages and disadvantages, financial commitment, first mortgage, first time buyers, home, i want my first home where do i start finding out about mortgages and other issues for first time buyers, interest only mortgages, mortgage, Mortgages, strong commitment

togetherwonderfulfinancialapplying

For a lot of newly weds buying their first home together is something that they dream about. When they view each house they imagine how well their new furniture will appear and what beautiful colours they will paint each wall and even which of the bedrooms will be ideal for their forthcoming children.

But far from these wonderful ideas the one concern that they ought to have on both of their minds is the mortgage. A First time Mortgage for a home can be expensive if one does not know what to look for.

The majority of banks and financial institutions often offer first time mortgages to people wishing to buy a home but first time mortgages are somewhat different to conventional mortgages in so much as the first time applicants do not possess an credible account of a previous mortgage repayments.

Many first time buyers do their financial business with only one of the many financial institutions out there including having a current or savings account with them. They will want to think about them first when they are looking for first a time mortgage. These financial institutions will more than likely already have a perception of your previous and current financial status as ountless people do apply for credit cards from their principal bank and this can certainly help you when the time comes to fill in each of the documents necessary for a mortgage.

The banks will desire to know how secure your employment is and they might request a letter of confirmation of your employment and income from your employer. It is advisable that you let your employer know that you are applying for a mortgage so that they will keep and eye out for any such letters from your lender. If you are self employed then your bank may request a copy of your most recent tax return. They will want to view this simply because it will provide them with a better understanding of your gross annual income, so be ready to supply such tax returns for the past 3 years of so.

When applying for a first time mortgage you should know that the home you purchase will be the main portion of collateral that you will own. But be aware the bank or mortgage company will have the power to repossess your home should you ever fail to meet the repayments and other terms set out in the mortgage agreement.

In a number of cases where a house buyer is seeking a first time mortgage the bank may well ask for someone to co-sign the loan agreement. Quite frequently a parent will be the co-signer. But be aware that this does mean that if you fail to make the repayments then the co-signer will become liable.

While the vision of getting yourself into so much financial debt can make you cautious about applying for a first time mortgage, the venture is well worth it. as owning your very own home is a step in the right direction to a secure financial future.

Zhang Xiao Hong
http://www.articlesbase.com/finance-articles/mortgage-advice-first-time-buyers-92183.html

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prospectdeposittemptingbuilding

The prospect of buying a home for the first time can be a very exciting experience, however for many it can also be a very daunting one too.

Being able to put down a deposit significant enough to secure a mortgage remains the biggest up hill struggle for most first time buyers. The fact is that the bigger your available deposit, the wider your selection of mortgage products will be.

Traditionally the average first time buyer would have had to be able to put down a 10% deposit – in some areas of the country, this could mean well over 10,000 for an average house price!

Understandably, finding that sort of money is going to be tough for most would be borrowers and in recent times lenders have recognised this problem and have sought to look for alternative measures – it is now possible, depending on your credit record, to secure a 100 percent loan to the value of the property.

It is advisable in most cases however to provide some form of deposit as there is a danger of being in negative equity should prices fall sharply. Without a deposit, the lender will also view you as a higher lending risk which could result in your mortgage interest rate being less competitive.

As tempting as it may be, taking out a loan elsewhere to pay for a deposit should be avoided. When making your mortgage application you will be obliged to declare all other outgoings and monthly expenditure – this may reduce the amount of borrowing you are eligible for.

Mortgage Affordability

Banks and building societies have traditionally used income multiples as a way of assessing how much an individual is eligible to borrow. Unfortunately, the force of the housing market can often leave such calculations looking extremely outdated – since the recent housing boom, this calculation can produce an affordability gap as house prices have risen far beyond the traditional calculations.

Banks and building societies have had to move with the times, although some might say slowly at times – many will now let you borrow on your ability to pay which can sometimes allow applicants to borrow a little more.

The type of mortgage product you select can also have a bearing on the level of borrowing you may take out; for example, if you chose a five or ten year fixed rate mortgage, the lender may be prepared to lend you a little more because the monthly repayments stay the same for a long time, which on the whole is easier for a borrower to budget their outgoings.

Mortgage Fees

There are many different fees to account for when buying a property, whether you are a first time buyer or second time buyer. Stamp duty is a government tax which is calculated as a percentage depending on the purchase price of your property.

Other fees may include; mortgage valuation and building survey costs, solicitor fees, lender arrangement fees and estate agent fees. It is very common to overlook these costs when scraping around for a deposit to put down.

Some lenders will even charge you a fee known as a higher lending charge – this charge is usually applied where a borrower is looking to borrow over 75% loan to value. The higher lending charge is applied to protect the lender in the event of mortgage shortfall however, the cost is covered by the borrower.

James Copper
http://www.articlesbase.com/non-fiction-articles/mortgages-a-guide-for-first-time-buyers-119366.html

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propertylandlordsdirector

As growth in the UK property market continues to confound expectations, the range of mortgages available to people has also expanded. First time buyers, for instance, look for different benefits from a mortgage than they did ten years ago. Similarly, there are more people requiring different types of mortgages, like bad credit mortgages and divorce mortgages.

One type of mortgage that is on the up is the buy-to-let mortgage, which allows property owners to purchase a second property with the intention of renting it out to tenants. In fact, buy-to-let mortgages can be an excellent way to make money, if you find the right deal to meet your specific needs. A recent article in the Guardian newspaper claimed that buy-to-let mortgages had increased by 48% in 2006, with banks, building societies and other lenders dealing out 330,000 buy-to-let mortgages worth a total of £38.4 billion.

According to the Council of Mortgage Lenders (CML), the number represents not only a 48% rise in volume but a 57% increase in value since 2005. The total number of buy-to-let mortgages in the UK is now said to stand at a total of £94.8 billion, with buy-to-let mortgage lending representing 9% of the value of all mortgage balances in the country.

According to the CML, the number of landlords falling into arrears also continued to decrease in 2006, with the proportion of buy-to-let mortgages that were three or more months in arrears dropping from 0.64% in June 2006 to 0.59% by the end of the year. What’s more, this figure is lower than the 0.89% of loans in arrears in the UK mortgage market as a whole.

Even more encouraging is the low repossession rate of buy-to-let properties. In 2006, lenders repossessed 1142 buy-to-let properties; this represents 0.14% of all landlord mortgages, a figure lower than the 0.15% repossession rate in the entire mortgage market.

Michael Coogan, director of the CML, told the Guardian: “The buy-to-let market has performed even more strongly than the wider market over the course of 2006. With evidence from other sources of strong tenant demand, rising rents and falling void periods, buy-to-let looks set to continue to remain popular and successful.”

If you’re looking for a buy-to-let mortgage, investigate carefully and you’ll find a range of banks, building societies and other financial institutions offering great deals on buy-to-let mortgages to meet your needs. And with the current buoyancy of the buy-to-let mortgage market, an investment of this kind is sure to reap untold benefits!

Andrew Regan is an online, freelance journalist.

Andrew Regan
http://www.articlesbase.com/mortgage-articles/buytolet-mortgages-increased-by-48-in-2006-110444.html

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housingconsiderdifferent

The time has come for you to buy a house, but for a first time buyer, the housing market can be frightening and confusing. Unethical lenders may try to ensnare you with high interest rates and a loan that will have you paying for years. Many houses are priced out of the range affordable by first time buyers. The market for mortgage loans fluctuates every year, the interest rates rising and falling without apparent rhyme or reason. All these things make finding a good deal on a house difficult.

A first time buyer should consider a number of factors before going to purchase a property, such as how much they will be permitted to borrow, how much they can afford to pay per month, the initial cash outlay for fees and deposit, and what kind of mortgage they ought to use. A mortgage broker, who will act as an intermediary to find you the right mortgage, can help immensely to ease this process.

It can be dangerous to borrow too much money to buy a house, no matter how tempting the idea of home ownership is. The problem of negative equity is when your mortgage is worth more than your house, is still a danger. Many first time buyers consider only the monthly payment when they sign up for a mortgage. It also is important to look closely at the full amount you will be paying, and the length of time it will take to repay. Some kind of deposit is normally required, as well. Though there are a few lender who will offer a mortgage for 100% of the price of your house, these are rare, and will ensure a long payment process. It is best to have at least 5% of the purchase price. If you have 10% or more, you can secure a better deal on your mortgage.

There are many different types of mortgage that can be chosen. These include the fixed rate mortgage – with an unvarying interest rate over the life of the loan, the adjustable rate mortgage is one where the interest rate is periodically adjusted based on a index, and the interest-only loan is where for a period of time, the buyer pays only the interest on the loan, then must begin making payments on the principal. These last two types can be tempting to the first time buyer with little income, but can result in more money paid out over the lifetime of the mortgage. An adjustable rate mortgage can be the better deal if interest rates continue to fall, but worse if they rise. Interest only loans permit a buyer who will be in better financial shape in a few years to get a foothold in the housing market. The downside is that the principal will be untouched for those years.

With careful planning and consideration, the housing market need not be frightening or daunting to the first time buyer. All that is needed is a good assessment of your needs and situation.

Derek Both
http://www.articlesbase.com/non-fiction-articles/what-you-need-to-know-about-uk-mortgages-as-a-first-time-buyer-107476.html

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