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First Time Home Buying - What You Need to Know

Even though a lot of people in the UK have been experiencing tough times, reports had it that mortgage lending has actually increased as first-time home buyers have been driving such.

Buying a house, for the first time, can be confusing to many; not to mention the fact that it is a huge financial commitment. This is why it’s important that you seek proper advice from experts and learn the things that you need to know.

If you cannot afford it on your own, go on a shared-ownership scheme.

While available on new build properties only, you may be able to benefit much from shared ownership schemes - where you buy a portion (generally half) of the property and rent the rest from the Housing Association. As time goes by and your financial situation gets better, you may be able to buy more of a stake in the property. This scheme typically is best if you find it difficult to come up with or save for the deposit money. If you’re only buying half of the property, you’ll have to put down a cheaper deposit and pay less Stamp Duty.

If you’re looking for other affordability options, check the other schemes in Help to Buy.

Equity Loan Scheme

This one’s available on new builds only where you can come up with as low as 5% and borrow up to 20% of the property’s value to use as deposit. More so, this scheme is interest-free for the first 5 years. The catch is you’ll have to repay the percentage of the property you borrowed - which means of the value increases, you will have to repay based on the new value.

Mortgage Guarantee

This programme allows you to come up with only 5% of the value and borrow 95% in mortgage. The government sends out a guarantee to your lender against the percentage of the loan, reducing the risk of losing money.

New Buy

This works like the Mortgage Guarantee scheme but only available on new build properties.

Right to Buy

If you’ve been a council tenant for at least five years, you may be allowed to buy the property you’re living in at a significant discount. There are also housing associations that allow tenants the same perks.

Besides these government implemented schemes, as a first time buyer, you might also want to get in touch with private housing associations, property developers, and building societies to know your options. As the housing market becomes competitive, there are a number of bargains, promos, and discount programmes that you may be offered - just so you are able to afford buying your own home.

In terms of money, since this is a huge financial obligation on your part for so many years, make sure you have carefully thought about it - considering your current and future financial situation, so you wouldn’t end up broke and homeless.


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