First Time Buyers - Getting On The Property Ladder
For many of us the thought of taking that first step on to the property ladder is both exciting and daunting. Owning a home of your own for the first time is always exciting but estate agents and mortgage lenders will have to be dealt with, legal procedures understood and a whole lot more. It's hardly surprising it call all seem scary to the first time buyer.
However, first time home buyers don't need to be too worried when it comes to getting onto the property ladder, as there are ways and means of making it easier to secure a home.
First Time Buyer Mortgages
For first time buyers wanting to move on to the property ladder, the most difficult part of the process is undoubtedly finding a suitable and affordable mortgage.
Single first time buyers are generally able to lend up to three times their salary while couples will usually be offered two and a half times their combined salaries.
Some lenders work on an affordability basis with other out goings being taking into account. The amount an individual or couple can afford is often based on the premise that nobody, whether a first time buyer or otherwise, should be using more than 35% of their monthly income on mortgage repayments.
Even though 100% mortgages are sometimes available for first time home buyers, it's important that you raise as much deposit as possible for four reasons:
1. You reduce the amount of money you'll need to borrow.
2. The greater the deposit you have available, the better deal (lower interest rates, payment free months, etc) a first time buyer will be offered.
3. An increase in your security as negative equity will be less likely should there be a slump in the market.
4. It'll be easier to move up the property ladder.
Keeping Costs Down
When deciding whether or not you can afford to move on to the property ladder, it's important to bear in mind that administration and legal fees will need to be paid as well as the actual cost of moving home. For first time home buyers, remember that furnishings will make a big dent in your budget.
Shop around when looking for a mortgage as some lenders are willing to cover the cost of legal fees; a substantial saving for the first time buyer.
Because first time buyers are finding it increasingly difficult to raise the necessary cash in order to pay a deposit on property in our major towns and cities, one alternative is to buy with parents as investment partners. A solicitor can help set up a contract that allows the property the be bought outright after x number of years while disallowing parents to demand the property sold during the same period.
Shared ownership through a housing association is another popular option for first time buyers who aren't able to join the property ladder through a wholly owned property. Schemes are largely available where first time buyers pay 25-50% of the property's value while renting the remaining portion. A percentage of the rent will generally be deducted from the final outright ownership price.
Although stepping on to the property ladder can appear difficult, there are ways in which it can be made easier and there's no reason why first time buyers shouldn't be able to enjoy the benefits of owning their own property.
Just make sure you understand the details of mortgages offered and that you're sure you'll be happy in the property you're buying.
With more than 7 years in the property industry and an extensive understanding of the needs of first time buyers, Ashley Babbs is now administrator of <a href="http://www.buyingfirsttime.co.uk/">Buying First Time</a>, a comprehensive website aimed at those looking to make their first move onto the UK property ladder.
If you're interested in becoming a first time home buyer, visit the site to join the forums, receive property related news or find mortgage lenders, estate agents and more.
