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First Time Buyers' Options

By: Jack Claridge - Updated: 16 Sep 2012 | comments*Discuss
Affordable Home Advice

There are many of us who are first time buyers and are finding it difficult to get a footing on the property ladder. This is in no small part due to the problems created by the so-called credit crunch which is the after effect of the problems with the United States sub-prime mortgage market.

As a First Time Buyer Can I Get a Mortgage?

If you are over eighteen and are in full time employment then you can apply for a mortgage. However if you have no credit history or have adverse credit i.e.: bad debts or outstanding debts, then you may find it slightly harder to get a mortgage then your debt-free counterparts. That said however there are still options available to you.

You may be able to get a mortgage with the assistance of a financial advisor but it is worth noting that such a mortgage may be at a variable interest rate which means that if the Bank of England increase the interest rate then your mortgage interest rate will increase as well. In some cases mortgage lenders will increase their mortgage interest rate without an increase from the Bank of England to make up for short-falls in their own investments etc.

A financial advisor or solicitor specialising in mortgages should be able to help you sift through the many different types of mortgage product available.

Right to Buy Schemes

If you have been living in a Housing Association or council house for more than five years you can qualify for the Right to Buy scheme. In essence the Right to Buy scheme allows you to purchase your Housing Association or council house for a discounted rate provided that you have not fallen behind with the payment of rent or have not incurred adverse credit on the address at which you currently reside. Likewise if you have left a council house and have moved into another one the five year rule begins from the date of your moving into another property.

When you have qualified for the Right to Buy scheme your local council or Housing Association will contact you although you can ask them in advance to consider you for the scheme if you are in year four of the five year qualifying period.

Shared Ownership

Shared Ownership homes are homes that are owned by more than one person. For example you and a partner, business partner or friend may decide to buy a home together and apply for a mortgage together. This means that you both own half of the house, unless there are more than two of you which can be allowed in specific circumstances.

Shared ownership not only spreads the cost of the mortgage but also spreads the cost of utility bills, repairs and any work that is to be done to the property such as renovation. The other advantage to a shared ownership home is that it cannot be sold without your permission so if your partner decides they wish to sell their half then they must first ask you if you wish to buy it and if you don’t then they must find a buyer with whom you are happy to enter into an agreement with.

Also with shared ownership you can buy half of the house whilst the other half is rented – this means that you buy your share but pay rent on the other half to a Housing Association or council until such times as you can afford to buy the other half.

Rent to Buy

Just like Shared Ownership you can rent the property you wish to live in until such times as you can afford to buy the property or you can rent half until you can afford to buy it outright. This is a good way to get onto the property ladder and also ensures that the cost of any repairs is halved as the Housing Association or council are obliged to assist with repairs whilst you rent half of the property from them.

Further Information

For further information on any of the aforementioned schemes it is worth while arranging an appointment with a solicitor who specialises in mortgages or home buy schemes or alternatively a financial advisor, both of whom will be able to offer advice and support.

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