UK Mortgages For The First Time Buyer

By Michael Sterios

With the cost of houses and property continuing to rise, UK
mortgages are also becoming more expensive. For first-time
buyers, this is more of a problem than for those already on the
property ladder. With the average cost of a new home now almost
£200,000, it’s almost becoming an impossibility to get your
first mortgage.

Thankfully, there are options available to you, as well as
numerous companies who specialise in this particular market.
From helping you find the best type of mortgage in the UK for
first time buyers to explaining the different interest rates and
charges, taking the first step onto the property ladder can be a
little more realistic.

Where to Start

The first thing you need to do is decide how much you can
afford, and then take it from there. One of the best features of
UK mortgages compared to other countries is that there are a
host of different ways specifically to help you buy your first
home.

100% Mortgage

For example, you can take out what’s known as 100% mortgage.
This can make a huge difference in being able to afford your own
home if you’re a first time buyer. With a 5% deposit on a
£200,000 home costing a minimum £10,000, it can allow you to buy
a better home than you might have been looking at.

However, you do need to be careful, since 100% mortgages tend
to come with a higher interest rate than ones where you pay a
deposit. They can also be more difficult to get, due to
increased credit checks.

Shared Ownership

Another option is to look at shared ownership – this is where
you can buy a home with a friend and share the costs. The
benefit of this is that you can both get on the property ladder,
although make sure you both sign an agreement for what happens
should one of you want to sell their half.

Guarantor Mortgage

This is a particularly useful option for a younger person
looking to buy his or her own home. Many banks and lenders will
now allow a parent or guardian to “co-sign” the mortgage as a
guarantor. This means that if the homeowner can’t meet the
mortgage payment, the guarantor will meet it instead. Not only
does this help satisfy the lender, it may also let the buyer
afford a more valuable property. However, these can be risky,
since if the guarantor ends up having to pay the mortgage, it
could strain whatever relationship they have with the buyer.

Graduate and Professional Mortgages

Another type of mortgage fairly unique to the UK is this one,
and it offers an excellent opportunity to anyone who has either
just graduated from University, or is employed in a certain
profession. Since a University graduate will normally have a
large amount of debt, it can be hard for them to get a mortgage.
However, lenders are of the opinion that a graduate will be able
to find a high-paying job, so they will overlook any debt and
allow a graduate mortgage.

A professional mortgage is similar, in that banks are far more
likely to give you a mortgage if you have a certain job.
Professions such as lawyers or doctors are known to see large
initial wage increases, and this helps in getting a mortgage
approved.

There are many more UK mortgage methods available for first
time buyers, including state help. For all the options available
to you, a specialist mortgage advisor will be able to help you
find the package that’s best for you.

About the Author: Michael Sterios is a writer for
http://www.ukmortgagesource.co.uk

Source: http://www.isnare.com

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