New Home Owners And Snagging Forum
Home Owners => Mortgages and Insurance => Topic started by: Philofacts on June 18, 2011, 09:17:34 am
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There are now quite a few 90% and 95% mortgages available with short-term fixed rates as low as 1.99% from First Direct.
However despite some great headline deals, recent figures indicate that not many mortgages are actually being offered to borrowers.
Those that are approved are often on different terms to those advertised by the lender due to strong credit scoring criteria..
L&G research shows that 55% of those seeking a new mortgage in the next two months, when their current fix ends,
fear they will have trouble finding a new deal.
For the latest up-to-date mortgage best-buys see Mortgage current best-buy deals (http://www.brand-newhomes.co.uk/mortgage-current-best-deals.htm)
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90% home loans may be available but at what cost?
These have much higher rates and lenders are very cautious about who they give them too.
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There are improving though, that's for sure. Even the likes of 95% LTV mortgages are starting to enter the market again. The real question is, will there ever be a return of the 100% mortgage?! Probably not I feel. The real shame about the First Buy scheme from the government is that it only allows around 10,000 people to benefit...everyone else needs to bare the poor interest rates of the higher LTV mortgages.
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There was a piece in the Sunday papers saying that first time buyers were getting Mum and Dad to guarantee say £20,000 and this is then used as the deposit so the first time buyers gets the better rates as they can then have 75% loan : value mortgages.
However, this would mean that parents are liable for £20,000 in the event that there are problems later on and the value of the property can not be achieved.
Some schemes even make parents set aside some of their savings to act as a deposit.
Parents should fully understand the risks they are taking to help their children get on the property ladder.
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It's made all the worse when parents have to take out a loan in order to get those savings, as some people are doing!
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Getting a loan to help with a mortgage deposit is what the house builders are offering.
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That's true, but the kind of loans available under schemes from home builders like Barratt are extremely preferable to the kind of interest rates offered by an unsecured personal loan.
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I dont think anyone should go for an unsecured loan to fund a deposit on a property purchase.
Are First time buyers actually doing this?