Thinking of Buying a Home For The First Time?
Get FREE Impartial Advice from JD Mortgage Services
As a first time buyer, mortgages can be daunting and confusing to say the least. Lenders will require a minimum of 10% of the purchase price as deposit. With JD Mortgage Services you can talk to our mortgage expert who understands the mortgage market inside out. Mark will explain how much your can borrow, what options are available to you and the monthly mortgage payments. We can get a mortgage agreed in principle for you so you know when you find your dream home that the finance has been agreed in principle. We do not charge you for our service, a commission is paid to us by the lender if we arrange your mortgage.
Mortgages With Smaller Deposits
Nowadays it is possible to buy a share in a property referred to as “shared ownership” or “shared equity”. These two schemes are good way for first time buyers to get on the property ladder. Take a look below for the differences between the two and by all means call us for a chat about it.
Shared ownership refers to buying a shared of the property usually between 25% and 75%, the remaining share (the part you do not buy) is then let to you for a monthly rent. You would purchase say 50% and then rent the remaining 50%. For example if a house was £180,000 and you bought 50% you would be buying £90,000 of it and would then require a deposit based on £90,000 (not £180,000). In today’s market it is possible to borrow up to 95% of the share you are buying so in this example you could borrow £85,500 and would only require a £4500 deposit. The rent on the part you do not buy would be approx £250 per month in this example which is lots cheaper than another £90,000 mortgage!!
Shared equity is different because their is usually no rent to pay because the equity is shared between you and the seller (usually a builder or housing association). You normally have to buy 85% of the property but some lenders treat the 15% “sellers equity” as part of your deposit. You are required to put down a deposit of at least 5% of the whole price so using £180,000 purchase price again, you would be required to have £9,000 deposit but you would get a mortgage interest rate based on a 20% deposit which means lower monthly payments for you.
Family Guarantee Mortgages
The latest products designed to help get first time buyers on the property ladder are Family Guarantee Mortgages. In brief these mortgages require NO DEPOSIT but the lenders would require a close family member to have a collateral charge on their residential property usually for 25% of the value of the property you are buying for ten years.
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