First-Time Buyers Need Help! by Finance News Bulletin

Published: 15/11/07

I'm a relatively youthful Foolish writer who is yet to get my foot on the property ladder So mortgages for first-time buyers is a subject close to my heartSadly, trade your first house has rarely been less affordable, according to the Council of Mortgage Lenders, which recently found that first-time buyers now have to use a greater proportion of their income on mortgage payments now than at any time since 1992But don't give up expect yet

As property prices have risen, a plethora of novel mortgage deals have been created to help unparalleled buyers with tight budgets So here's a stupid guide to some innovative first-time buyer mortgages that might suit youIf you've been renting with associates for a while, why not buy together and save on rental fee money Many lenders such as Britannia and HSBC will now consider lending to more than two parties

This makes journal outgoings lower, and enables you to get onto the ladder with three or more friendsHowever, although they are your friends, you should nevertheless protect yourself by preparation ahead and figuring out what you would do if one of you wants to move out, for exampleIt's a good idea to each have your own solicitor to look after your individual wellbeing In addition, you should usually make certain that you buy your property as 'tenants-in-common' as opposed to 'combined tenants'

This means that if one of you dies, your share of the property will go to your chosen heirs, as opposed to automatically passing to your co-ownerIf you're not earning enough to meet the criteria for a standard mortgage, some lenders will still be willing to lend to you if you have a backerA backer is more often than not a close relative such as a parent or guardian, who agrees to meet your mortgage expenditure should a shortfall arise They are putting their home at danger by approving to this, as the lender could pursue your guarantor for your debt if you failed to pay up

For a guarantor mortgage with a twist, Bath structure Society offers a special 'Buy for Uni' mortgage, where institution of higher education students and their parents can purchase a property to exist in while completing their degree The property can be communal with friends to assist with the cost of the mortgage, with the lender taking into account the rental profits of the property when assessing how much you can borrowDifferent lenders have dissimilar criteria when bearing in mind a guarantor, so it's worth asking if the guarantor would be liable for all of the loan amount or only the percentage above what the main borrower would normally have access to And remember, if you do non-payment on payments, it won't now be the lender who comes after you -- it'll be Mum and Dad

Graduates there exciting prospects for lenders, and some will try to attract you with particular deals Scottish Widows are willing to lend up to five era your income and 102% of the property value depending on your circumstances, and even more if a parent or guardian can act as a guarantorexpert mortgages are an even better niche in the mortgage market, aimed at sure professions such as accountants, dentists and solicitors on the assumption that these people have accelerated earnings potential Lenders are more willing to stretch what they would usually lend because they be acquainted with roughly how much you'll be earning in the next few years, and realise the potential gains of receiving their mitts on it early

Finally, remember that now because a lender will offer you a larger figure than usual, it doesn't mean you should take it put on't be tempted into borrowing more than you can affordIf you're keen to get on the property ladder, don't imagine buying with friends, but can't find a mortgage by yourself, then you could always get a lodger The government gives a tax smash of up to £4,250 a year through its rental fee a Room system

Some lenders such as Stroud and Swindon take this income into account when calculating how much you can have a loan of So for example if you earned £30,000 and rented out a room for £4250 a day, you would be able to borrow £137,000 (4 x £34,250)If you're bearing in mind this option, you've got to remember that the lodger income isn't certain, and while you and the mortgage lender will be in bed together for years, the lodger may not necessarily attach around for the long haulNo matter how you decide to get on the steps, it's worth considering all your options

Shop around, compare mortgage deals and consider getting recommendation from our Mortgage Service before making a choice Who knows With a bit of fortune, you may soon be celebrating in your novel home>The Motley Fool Mortgage Service offers whole-of-market, no-fee recommendation

We can help you find the best deal for you© Copyright 1998-2007, The Motley trick Limited All rights reserved This material is for personal use only

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