The government announced from early 2009 financial support will be available to first time buyers to help them buy their first property. Welcome news for those struggling to secure a mortgage as well as for the fledging house developers. The house developers will be funding part of the loans, however they will be receiving much needed cash flow for them, helping to avoid making employees redundant and helping reduce their potential losses from homes they have built and are lying unsold.
If you have been struggling to meet the tightened lending criteria, with the higher mortgage refinancing requirements being asked this new scheme can help. If your household income is less than 60,000 you will be eligible for a shared equity mortgage. You can get a mortgage refinancing which will be free of interest for up to five years. It can be used to pay the deposit on the property and can cover up to 30% of the purchase price.
I am sure everyone will agree it is fantastic news for everyone, house hunters, house developers and the local economy. The only doubt at the moment - will mortgage lenders agree to the terms of the scheme and issue a shared equity mortgage?. As the government is backing the scheme let's hope lenders are happy to lend the funds, with the government shareholders in many of the big banks and a majority shareholder in one they should be able to use their influence to ensure the scheme is a success.
It is worthwhile to make regular enquiries into the mortgage rates available; lenders are changing their offers even more frequently at this time as interest rates shift more frequently. Making use of a mortgage broker is a pain free option. A mortgage broker that will search the whole of the mortgage market will ensure you are getting the best deal for you and it worthwhile doing about six weeks prior to a fixed rate ending so you have adequate time to switch to a more competitive rate. As well as taking advantage of their expert advice they can advise you of the lenders offering shared equity mortgage options and those supporting the new government support scheme.
Chris Borthwick writes articles covering a broad range of subjects. His main area of expertise is mortgage advice and writes many articles on mortgages for finance industry, mortgage brokers and for the general public, recent articles including getting mortgage quotes and running a mortgage search.
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