December 14, 2015
Securing a Deposit
a climate of record low interest rates and ever improved deals for borrowers
over the last 12 months, First Time Buyers still face a range of challenges
when it comes to getting onto the property ladder, the biggest of which is building
up a large enough deposit.
from the Office of National Statistics, published in The Times this month,
showed that the average price of a First Time home is now around £215,000, so even
those aiming for the minimum 5% deposit will need a significant level of
launch of the new Help to Buy ISA on 1st December should provide a
useful option for those looking to save. It allows for an initial deposit of
£1,000 plus £200 per month thereafter. The Government then provides a 25%
uplift on the money saved, to a maximum of £3,000. While hitting the required amount for a
deposit may still seem out of reach, this type of account provides a welcome
boost for potential buyers.
many First Time Buyers however, using their own savings will not be enough, and
it is for this reason that cash gifts are still the most common way that the
‘Bank of Mum and Dad’ can help. Most lenders are happy with this as a source of
deposit, as long as it can be confirmed in writing by the parent. Bumping up
the deposit from 5% to 10% also opens up a much wider range of mortgage deals
with lower interest rates.
options exist for parents who want to help without physically parting with
their savings. Some lenders allow money to be held in a separate savings account,
allowing parents to keep their savings in their name, while still providing the
additional security needed and often securing a better rate.
getting a deposit together can feel like an uphill struggle at times there are
options available, and with some financial discipline and planning, stepping on
to the property ladder for the first time could become a reality.
Guild Mortgage Service, Provided by London
& Country Mortgages
YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP
REPAYMENTS ON YOUR MORTGAGE