New Borrower Information
Are you trying to buy a new home? Maybe you want to buy your first home? What with a tough mortgage market, inflation and all the usual costs involved with house buying such as legal fees and tax not to mention decoration and furnishing, now is a problematic time to buy.
First time buyers should be even more careful as they do not have any property buying experience.It is well known that buying a property is probably the biggest financial comment most people will make, so research and great care should be taken in order to try and make the right decision which can potentially effect your financial future. There is acommon saying to indicate the most important factor that can effect a property is location, location, location.
So knowing the area is important. Is the area near decent schools, does the area have a good road network, are there parking issues, is the area prone to flooding or subsidence (usually in a clay soil based area). Then there are more local issues to be aware of for example are there tall trees or shrubs close to the house, have there been neighbour disputes.
The main structure of the building should be checked and often a full property inspection can be more prudent and cost saving than a general mortgage valuation that is basic and does not go into details about many important factors. If certain areas or concern has been highlighted then further specialised reporting should be carried out. These may include a full NICEC electrical inspection, CORGI gas inspection, structural engineer report for roofing and drains. Others may include a full damp and timber treatment report or thermal insulation and an energy efficiency report.
These inspections can be expensive but if there are serious problems with the property they can allow the potential buyer to make the correct choices or potentially lower the asking price
Certain indicators are showing that the doom and gloom saturating the housing market may be beginning to evaporate. OK, so we aren’t exactly back to 2007 levels when the property market was booming so much its repercussions were felt across the globe. But the Nationwide building society has said that house price inflation had risen 10.5% year-on-year to the end of April 2010. What’s more, according to the Centre for Economics and Business Research, British house prices could increase by as much as 5.3% in 2010.
However, the average home in the UK now costs £167,802. This is a rather large decrease on June 2007 figures, which put the average house price at £184,070.
Property sales are struggling too. Sales in March totaled 72,000, but this was the lowest March figure since HM Revenue and Customs, who collected the information, first started compiling records in 1978. But on the other hand, this was a jump of 22% on February’s sales figures.
Although mortgages are still hard to come by, especially for first-time buyers as mortgage lenders continue to demand a 25% deposit, the total number of new loans agreed in March was up to 48,901 from 46,882 in February; this represents a year-on-year increase of 17%.
Choice is beginning to increase, which will come as long-overdue good news to first-time buyers. The total number of mortgages now available has reached over 2000, the highest level since December 2008. But even better news is the increase in high loan-to-value mortgages. There are now 19 95% mortgages – a 533% increase year-on-year – and the number of 90% mortgages has risen by 107% during the same period.
What with the continuation of the 0.5% base rate from the Bank of England and smaller deposits, now could be the time to lock in a fixed-rate mortgage deal. If you want to find out how much you can borrow and more importantly, how much you can afford to pay back, make use of free online mortgages calculators.
Leaving university now and taking your first step on your career ladder has never been harder. Unemployment is high so more experienced people are taking junior roles and with increasing numbers of young people gaining degrees, competition for those few entry-level positions is fierce. Some jobs attract thousands of applicants for just one position. You need to make yourself stand out from the competition through extra-curricular activities, possibly further study and more than likely a good deal of un-paid work experience.
You will also start your working life with a hefty debt as tuition costs continue to rise. Although you will pay a low level of interest and you don’t start paying it back until you are working and earning over a certain amount, it increases the burden on recent graduates to get a well-paid job. It also makes it harder to get a loan or to save any significant nest egg. But, don’t think that you can just burry your head in the ground and the problem will go away. As soon as you graduate you should get your finances in order, because unfortunately you will have to say goodbye to student discount and £1 a-pint snakebite.
When you have left uni and you’re on your way to getting a good job, you should probably start to think about a home. Buying your first home is a huge commitment made even harder with over-inflated house prices and a shortage of low-deposit mortgages. However, if you get in early, like with your career, you can start to climb up the ladder earlier and faster.
There has been some good news recently for first time buyers, notably the stamp-duty ‘holiday’ announced in the most recent budget. This means that homes up to the value of £250,000 no longer have to pay 1% stamp duty, a saving of up to £2,500.
More good news is the slight increase in the number of mortgages requiring a low deposit. The number of 90% mortgages increased in February by 33% and the total number of mortgages has now increased to 2,053 up by 70% on April 2009 levels when the market was at its lowest