Posts tagged ‘mortgage’
How can I get on the property ladder?
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
It’s almost impossible to open a newspaper today and avoid a story about the problems facing first-time buyers or those who want to move to a new home. The issues start with cost: last month, the average asking price of a UK home increased by £911 to £228,298, according to the latest figures from FindaProperty.com.
Rising prices and difficulties securing a mortgage are forcing first-time buyers to look at other, more creative options, to get on the property ladder
But it’s not just the price of a new home that’s making it more difficult for buyers. The other problem is the struggle to secure a mortgage.
The double dip recession and the worsening Eurozone crisis has led the Bank of England to warn that homeowners could face higher mortgage repayments as lenders raise interest rates to recoup costs. A repayment hike can be devastating for many homeowners on standard variable rate mortgages, who could end up paying thousands of pounds a year extra. Lenders are also passing their extra costs onto many fixed rate deals too.
The pressure on lenders to raise lending interest rates also makes the situation worse for so-called mortgage prisoners – those who can’t afford to buy a home because the change in the mortgage market means they would not be able to negotiate a new mortgage. The unfortunate effect of this could be a slowdown in transactions as lenders become even more picky about who they are willing to offer mortgages to.
But there are option for wannabe home owners – so long as they’re willing to think creatively.
For instance, new research by FindaProperty.com reveals that buying a property with friends could be the answer to many first-time buyer woes.
It turns out that three friends clubbing together to buy a three bedroom home is the most cost effective route onto the property ladder for those who are willing to share.
Not only is the average mortgage repayment for a three-bedroom house in the UK, spread equally between three occupiers, £334 per person, but the monthly repayments of this size account for an affordable 19% of the average net wage across the UK.
Buying a property with friends could also lead to a larger deposit – something mortgage lenders particularly value at the moment. It could also lower the associated costs of moving – so council tax and utility bills will be lower.
Of course there are some practical concerns to keep in mind if you take this route. Be sure to speak to a solicitor and have a contract drawn up about what should happen if one friend wants to leave the arrangement. But as a leg up into the world of property equity, sharing with friends could be a sensible first-step on the road to full home ownership.
Sell my home blog: More mortgage hoops to jump through
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
I feel like the last month has been a total whirlwind. Our second offer was accepted on Friday afternoon at 4pm so we are now well on our way.
Monday morning was spent on the phone to my current mortgage lender to persuade them to lend us 8% more than we currently borrow so we can buy a home. After an hour and a half the answer was no. Their reason was that we wouldn’t be able to afford the repayments. These huge repayments were roughly 50% of the money you would pay to rent a one bedroom flat where we currently live and only £100ish more than we currently pay each month.
The second bank I contacted were able to lend us the money although their underwriter has final sign off so fingers crossed for that. It seems that being a second time buyer with a huge deposit does not make it any easier to secure funds. With the new FSA rulings looking to prevent more “risky lending” I feel that I would have been getting no’s from everywhere and not just my current lender. Also watch out for banks not accepting e-payslips or e-statements. They did finally accept these but only after another morning on the phone and in and out of the bank.
We are exhausted and in need of a rest but I received an email today showing a property we love that has come back on the market. We are both mad but may take a peek…..just to be sure it isn’t THE dream house!
We’ll pay your mortgage or rent for one month – enter our competition now
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
Things can be a little tough at the moment, which is why we’ve just launched a new competition that gives you the chance to have your mortgage or rent paid for by us for a month.
It’s easy to enter – all you have to do is click through to the Happy Place and register. All the terms and conditions are there for you too.
Enter now and don’t forget to spread the word and tell your friends.
Sell my home blog:It’s a tale of two-year mortgages, says Hannah
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
Since my last post the bathroom and kitchen are now almost finished. There are a couple of skirting boards to paint and the wall needs a fresh lick, but apart from that we are nearly there.
When we purchased the flat five years ago, finances were a big issue. We were both concerned about the small wages we were earning and initially we were unable to secure the funds we needed from two banks. Luckily my boyfriend had some family money which meant we were able to eventually secure a loan.
It was important to us to have a two-year fixed rate mortgage as the original plan was to renovate and move on quickly. Being first-time buyers, the thought of tying ourselves into a longer term plan seemed completely alien to us!
Two years passed quickly and while the painting continued, we needed a new mortgage so moved to a 30-year repayment mortgage for another two-year fixed rate. The property value had increased and so had our wages but my boyfriend decided to go back to university so we extended the length of the mortgage to make the repayments smaller.
Although selling is on the horizon, we have just started a new two-year fixed rate interest-only mortgage with the same bank. When we took this decision interest rates had been at their lowest point for years and there had been much said about the jump they were about to take. We decided to renew the mortgage at a lower rate rather than stick with the variable payments we were making. We are hoping that when we move home the bank will be able to switch over the mortgage and increase it without too many extra penalty payments. Hopefully being a valid customer and always making repayments on time will count in our favour.
Our work and home life have changed dramatically over the past five years. We got married, changed jobs, went back to education, had holidays, not to mention had to cope with sky rocketing energy prices. All along though, we’ve kept focused on what we could afford each month. My parents were really helpful and full of good advice about mortgages, but the main point they had was that you don’t need to be able to pay off the whole mortgage in 25 or 30 years. When you move from property to property your earnings should increase so when you retire to your small bungalow by the sea, you will be able to downsize and pay off everything in full. Well that’s the plan!
Solicitors costs were also a big worry when we started to budget for the property purchase. Here we had another lucky break as a friend of mine had recently qualified as a property solicitor and talked us through the complicated bits. As the move gets closer, I am now worried that having to deal with solicitors for the seller of our new property, solicitors for the buyer of our old property and my own solicitor will be slightly more complicated. Maybe it’s time to de-camp to the seaside now.
New time: finishing touches and estate agents
Win A Mortgage-Free Year
Here’s a top offer from a top hotel group.
Principal Hayley Hotels have launched an “Open to Offers” competition where the (very, VERY) lucky winner will have their mortgage or rent paid for a year.
Even better, entering is a breeze – all you have to do is fill in your name, email address and postcode on the “Open to Offers” page on their website.
They’ve said there’s no catch. I’ve looked at the T&Cs and I can’t find a catch. I don’t think there is a catch. So go, sign up now, and good luck to one and all.
(Thanks to Anna at Halpern Cowan for letting us know about this competition.)
