Buying a home, especially if it’s your first home, is an important purchase. But getting on the property ladder or even upgrading to a bigger home can also be a daunting prospect. Coming up with the funds to cover a deposit has become increasingly difficult but there are things you can do to make the process easier.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Why is it getting harder to raise the funds for a deposit?
First-time buyers have been having a rough time recently. Property prices have risen, ergo deposit amounts have risen. Normally, potential homebuyers who do not have enough for a standard deposit – usually anywhere from 15% to 20% – can seek out high loan to value (LTV) products and secure a mortgage with as little as 5% in certain cases.
Unfortunately, as a result of COVID-19, many lenders have withdrawn high LTV products because they are a higher risk for the lender. The number of products on the market has gone from just 779 in March to just 42 in October.
Hopeful home buyers with small deposits or little equity were already up against it with rising property prices, but if you live in an area where property prices are already at a peak, like London, it’s even tougher.
Government assistance
Recognising the battle that homebuyers face, the government initiated the Stamp Duty holiday scheme, which offers buyers an incentive to buy sooner rather than later.
Additional support, such as for the Help to Buy scheme, shared ownership, and other first-time buyer schemes, needs to be top of mind for the government to combat the lack of options on the mortgage front.
These government-backed schemes are great for first-time buyers and have already helped a significant number of people get onto the property ladder.
What else you can do?
Stay connected with us via our blog, social media channels, and email newsletters for the latest rates and news on the rapidly-changing mortgage market.
If you’re ready to start the home buying process be sure to check out our Mortgage Finder that gives you access to the latest rates from thousands of lenders or use our Mortgage Affordability Calculator to calculate how much you can afford to repay each month.
You can also try our other online tools to help you research your options, request a mortgage review by a professional independent mortgage broker.
We’ll explain the different types of mortgages available to you and provide you access to specialist mortgage lenders that have experience working with buyers in the dental and medical field.
You have more important things to worry about than sifting through the different lenders and mortgage products out there, so working with us will give you peace of mind. It’s our job to compare the large number of mortgage products on the market so you don’t need to shop around. Our expertise ensures we can help you find the right deal for you in these unusual circumstances. Contact us today.
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