These are the top five alternative strategies given by our mortgage advisers.
If you are aged between, 18-39 you can put up to £4,000 a year into a Lifetime Individual Savings Account (LISA). The government will add a 25% bonus on contributions each month. That’s worth up to £1,000 each year. Saving the full amount each year means that in less than four years you will have saved enough for a 10% deposit on the average first time buyer property of £188,500. Be aware of the restrictions. To qualify you will need to hold the LISA for at least a year and buy a property worth no more than £450,000.
If you don’t qualify for the LISA. This may be on age grounds or because you are buying within a year. You may wish to consider a Help to Buy ISA instead. You can save £1,200 in the first month and £200 thereafter, and get a 25% bonus on the first £12,000 you put away. The Help to Buy ISA can be used to buy a property worth up to £250,000 outside London. This increase to £450,00 in London.
If you are looking to buy a new build property then this government scheme may be of interest. The government will lend you up to 20% of the cost of the property.
This scheme amount is capped at £600,000. Applicants are required to put down a five per cent deposit, with a mortgage for the difference (75%). For applicants living in London, the amount of support is doubled to forty per cent. Similar schemes operate in Scotland, Wales and Northern Ireland.
Remember this is a government loan that will need to be repaid. Initially, the loan is free for the first five years. Then you will pay a loan fee. This loan fee rises each year. You will also have to repay the government loan after 25 years or whenever you sell the property, whichever is sooner.
This enables you to buy a share in a property and pay a mortgage on that share. You pay rent to a housing association on the difference. At a later date, you can buy a larger share of the property at the market rate at the time. To qualify, your household income must be less than £80,000 outside London. This rises to £90,000 in London.
Mortgage lenders offer a number of ways for parents to help. This may include acting as a guarantor to the mortgage. This often enables you, the first time buyer to get larger mortgages if your parents guarantee to cover the repayments. Family offset mortgages have also become popular. This is when your parents put their savings into an account linked to their mortgage.
Your parents could consider buying the property with you. You would pay rent to your parents and buy the rest of the property from them as your financial situation improves.
Before acting on any of the above ideas, please contact us so we can explain these schemes in full and confirm that they will meet your financial plans.
The above are just a few ways Anstee & Co can help you as a first time buyers. As Independent Financial Advisers we offer unbiased financial mortgage advice. Why not contact us today to so that we can help you get your feet onto the first rung of the property ladder. The initial meeting is free.
Our website highlights the current mortgage rates for first time buyers and is updated daily.
We have mortgage advisers located in-
Our team of mortgage advisers also make use of meeting rooms in, Northampton, Warwick, Bedford and Wellingborough.