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Mortgage Advice For First-Time Buyers

April 12, 2012 | Comments: 0 | Views: 163

The property market is and has been going through a difficult period for a number of years now, but that should not put first-time buyers off getting themselves onto the property ladder. Recent studies have shown that those paying off monthly mortgage repayments are actually better off than those paying a monthly rental income, and there's always the end goal of owning your property when paying a mortgage. This is because rental rates are constantly going up and mortgage repayments are staying fixed or sometimes decreasing.

Buying your first ever home will more than likely be the biggest financial commitment you will make in your lifetime. You should make sure you are clued up on all aspects of the home-buying process and if you aren't you should research and ask for help from estate agents before you start looking into viewings and sorting your mortgage. You will need to find out about mortgage rates, house surveys, Stamp Duty Land Tax, council tax and unfortunately, lots more!

A new type of scheme has been introduced by the government and developers to help first-time buyers afford a home. It allows buyers to purchase a property with a deposit of only 5% providing they meet the stringent criteria already in place to own a mortgage. Selected banks are offering this indemnity scheme primarily to first-time buyers who need help buying a property up to the value of £500,000. This will help the buyers who cannot afford to save up for the hefty deposits a lot of mortgage lenders ask for. Not only is this a good scheme to help get buyers onto the property ladder but it will also help produce thousands of construction jobs leading to more employment. It's important to know the NewBuy scheme will not cover you should you fall out of employment or experience financial losses - it is the same as any other mortgage and you will need to ensure you are covered if for any reason you are unable to make your repayments.

As house prices are on the increase this NewBuy scheme will be beneficial to first-time buyers who cannot afford to save up for a full 10-20% of the mortgage, but obviously the usual criteria will be in place - you will need to be earning a steady wage and you will also need to pass a credit test.

Critics say the scheme is only helpful to first-time buyers who pass the strict credit rules and meet up with the lending criteria. Critics feel housing prices, Stamp Duty and Council should decrease to help first-time buyers over a long term period rather than just slashing the deposit amount.

Your mortgage and deposit are just two of the financial aspects you will need to consider when entering the property market - you will need to take many other additional costs into account including getting your potential property surveyed, council tax, Stamp Duty and any legal costs. It's worth spending a bit more on getting the property surveyed as it's better to know what's wrong before you move rather than finding out you will have to spend a lot money to get things fixed when you have moved in.

Clair O'Hara is writing on behalf of Shepherd Gilmour, specialist estate agents and letting agents.

Source: EzineArticles
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