Get on property ladder
Mortgage isn’t only option
GETTING on the property ladder is something many of us aspire to, but some of us feel we can’t achieve. Previous property booms have seen house prices rise exponentially, while the recession has made it harder than ever before to secure that first-time mortgage. But there are other options available to those who still wish to buy, but think they can’t afford it. If you would like to own a property, but think that you won’t be eligible for the necessary mortgage, then read on. There are lots of great deals on mortgages out there, not to mention a variety of alternatives. For example, have you heard of shared ownership or shared equity? This is a bit like a cross between renting and buying a property, designed to help people become home owners who wouldn’t otherwise be able to. It allows you to buy a share in a house or a flat, with the other part owned by the developer or a housing association. With the latter you then pay a reduced “rent”, known as an occupancy payment, for the part of the property that you don't own. With a developer you would typically agree to a set term and then pay the percentage back at market value – although you could pay rent or interest in the meantime. The monthly cost of your mortgage repayments plus your additional payment should still come to less than the repayments on a mortgage for the whole property. After a year, you will then have the option to purchase further shares until you own the property outright. If you are prepared to shop around, you will find that some developers will offer you a 100% mortgage for certain plots, meaning you don’t have to save for a deposit to get started. Other lenders will be in a position to secure you a mortgage of 95%, meaning you need substantially less of a deposit to get your foot on the ladder. And even if you don’t find an arrangement like that which suits your needs, there are still other ways to buy your own home. You might want to consider renting out a room in your property to a lodger and use the rent to help you pay your mortgage. consider clubbing together with friends and/or relatives to buy a property together. Some private new-build developers might offer you an interest-free deposit loan for a first time buyer, and it’s worth checking out local property auctions to see if you can pick up a bargain. The key to taking those first steps to buying a property is to make enquiries about what’s out there. You might be surprised at just what you can afford to do.
SHOP AROUND: There are many ways to take the first step on the property ladder.
Make it clear this is your intention when arranging your mortgage and check the terms carefully. Alternatively you could