Archives for February, 2010

Why First Time Buyers are Important to the Housing Market

23rd February 2010 by admin under First Time Buyers     

However, in order to move up the ladder, you have to have your place on the ladder filled by somebody else – i.e. by selling your place.

If you’re on the bottom rung of the property ladder, this place has traditionally been taken by first time buyer, and during the early part of the noughties by property investors seeking to gain an advantage from the rising market.

All was well in the world with optimistic lenders willing to lend up to 125% of the value of a property for first time buyers, and even buy to let lenders willing to stretch themselves up to 85% of the value of a property. In effect you didn’t need much if anything to get onto the property ladder and the boom that this created and subsequent increase in prices caused by demand meant that soon homeowners had equity even with 125% mortgages.

However, whilst all might have seemed well, logically, house prices can’t keep increasing at a level way above and beyond salaries, as regardless of the mortgage provider’s willingness to lend in excess of a property’s value, they are still going to expect to see the mortgage paid every month. In effect, the housing crisis in America is an inflated version of what is happening in the UK, with so called sub-prime mortgages being withdrawn and borrowers being brought back into the reality of more traditional lending rules.

As a result of all of this, even though, according to most commentators and research house prices are now starting to fall, it isn’t really good news for the first time buyer as it is much harder to get hold of the funds required to get onto the property ladder. What’s more, if lending restrictions remain tight, it is likely that to get a mortgage it will now be necessary to put down a 10% deposit as a minimum which at today’s average house prices in the UK is getting on for £20,000.

With the new blood of the first time buyer being forced to remain in their house share or flat share it is therefore difficult to see how the UK housing market will regain buoyancy in the near future.

Lee Unsworth runs Withme Solutions, the company behind abodewithme, the house share website

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First time buyers ‘have cause for optimism’

17th February 2010 by admin under Banking     

One of the hot topics in the property sector of late has been the fortunes of first time buyers, with many commentators believing that this group is key to getting the industry going again.

Indeed, as the Royal Institution of Chartered Surveyors (Rics) announced its reaction to Bank of England mortgage lending figures, it emphasised the fact that “obstacles” still remain for first time buyers.

The statistics showed that the number of mortgages approved was up and Rics chief economist Simon Rubinsohn suggested that his organisation’s own data, showing an increase in enquiries from new buyers, is likely to mean activity continues to grow in coming months.

Meanwhile, the Building Societies Association has suggested that those looking for first time buyer mortgages could find that now is an ideal time to be in the market, as long as they have a good deposit.

Paul Broadhead, head of mortgage policy at the body, explained that banks are beginning to target their products at this group.

He noted that affordability has been one of the main problems for first-time buyers in the past, but prices have now dropped considerably. However, with 100 percent mortgages seemingly a thing of the past, Mr Broadhead added that large sums need to be prepared in advance.

“There is lots of interest there, but the very high loan-to-value mortgages which pretty much serviced the majority of the first time buyer market [in the past] still are not there and are probably still a way off,” he said.

Nonetheless, the expert was keen to point out that low mortgage rates and house values mean that anyone with the cash will find that now is a “great time” to get on the property ladder.

Similarly, the Little House Company has suggested that first time buyers may benefit from the fact that many people are keen to move quickly. Jane Marr, director at the online advertising service for sellers, explained that discounts are available – with recent reductions of ten to 15 percent compared to last year’s figures.

“First time buyers are in a very strong negotiating position as it’s not only buyers that our private sellers want, but ones in good positions to move quickly,” she remarked.

This could provide some comfort to the 65 per cent of non-homeowners who recently told PropertyLive.co.uk that they do not expect to ever purchase a property, as Ms Marr explained that “green shoots” are gradually emerging in the market.

So those who are in a position to compare mortgages – and even those who are not yet ready to buy – may have cause for more optimism than they previously thought.

For all your unbiased comparison needs visit Moneyfacts.co.uk

Moneyfacts.co.uk is the leading independent financial information provider in the UK. Since 1988, we’ve been providing impartial information to financial services professionals which has helped thousands of customers get the best deal on their mortgages, savings accounts, credit cards, loans and other personal finance products.

www.moneyfacts.co.uk Limited is authorised and regulated by the Financial Services Authority (FSA).

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What You Need to Know About UK Mortgages as a First Time Buyer

16th February 2010 by admin under Banking     

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.

http://www.icismortgages.co.uk/ was established in 1990, serving individual clients from all walks of life, as well as small and medium sized businesses.

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Buying Solo: The Single Woman’s Guide to Buying a First Home (Paperback)

11th February 2010 by admin under Twitter Affordable Housing     

Buying Solo: The Single Woman's Guide to Buying a First Home

Product Description
Buying a home is an excellent investment, and more and more women are taking the plunge–with or without Mr. Right. Financial expert Vanessa Summers tells women how to do it-even if they have less-than-perfect credit or no extra cash for a down payment. Readers will get the inside scoop on: – Why a home is the best investment a single woman can make – How even the credit-challenged can buy – How much monthly mortgage they can afford on their salary – How to find a great real estate agent and the best deals – The art of “Trump-like” negotiation and closing the deal Packed with practical, savvy advice, Buying Solo is the must-have guide for any woman who realizes that building equity and investi (more…)

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Build your Dream Home With the First Time Buyer Mortgage

11th February 2010 by admin under Banking, First Time Buyers     

Home sweet home…and it is sweeter when the home is your own!! Isn’t it a wonderful feeling when you enter your own…yes your own home? We all crave to purchase a home of our own. However, home purchasing is not less than a challenge, especially for the first-time buyers. First-time buyers have no prior experience of purchasing a home, about the current mortgage rates prevailing in the market, the types of mortgage deals available, mortgage brokers, the real estate market and so on. A first-time buyer needs to be guided in selecting the right mortgage deal for buying the dream home.

First time buyer mortgage deals are designed specifically for those who plan to purchase a home for the first time. First-time buyers get a number of advantages when they go for the First time buyer mortgage. The most lucrative of them are a low interest rate on the loan and a long repayment period. These, in turn, lessen the financial burden on the borrower as he/she can repay the loan in small monthly instalments. A first-time buyer needs to make a small payment in the beginning, known as the down payment. This is imperative for proving that you are capable of repaying the debt that in turn helps to gain the confidence of the lender. This really helps the borrower propose for favourable terms and conditions for the mortgage. After the down payment, rest of the purchase amount is borne by the lender.

A first-time buyer also gets special offers with the mortgage, such as free property evaluation and no legal fees.
It is very crucial for first-time buyers to do a thorough research on the Internet regarding the mortgage deals available, the lenders in the market, current mortgage rates, etc. and then select the best first time buyer mortgage deal.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Adverse-Credit-First-Time-Buyer as a Mortgage specialist.

For more information please visit: http://www.adverse-credit-first-time-buyer.co.uk

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