For anyone feeling discouraged about ever gathering together enough money to buy a home, there are other options to consider that offer help to first-timers. At various times, the government injects cash to subsidise projects and make it easier for first-time purchasers struggling to buy property.
At the time of going to press, the central government was still offering some government-backed schemes to help first-time buyers get onto the ladder, such as HomeBuy Direct . This is where first-timers can buy new homes from house builders that are partly funded by the government. There is more information about how different house builders set out these government-sponsored projects below. However, depending on budgets set in the future these initiatives could change, so do check out government and house-builder websites to see what's still on offer and gauge how long the funding is likely to run.
In essence, different house builders across the UK have given different first-time buyers schemes different names. This might sound confusing, but it's more marketing and advertising bravado to help these units sell, rather than anything else. The principles behind the incentives are fairly similar, but they're mapped out in a variety of ways. I've outlined some to give you an idea of what developers are suggesting.
Essentially, you can borrow up to 20% of the price, which you pay back interest-free over a 10-year period. Also, you might get half of the 10% deposit paid, too. The schemes differ slightly, so it's worth talking to developers to see what help they're giving on their sites.
And remember that, to a degree, these schemes are negotiable. Basically, the house builder just wants to shift the property as soon as possible. If it means throwing in a few extras, they might certainly consider this - especially in a downturn or quieter market.
The following government-funded schemes are in place, some of which might be either outdated, or new ones might have occurred. It's worth double-checking whether these schemes, or variations on them, are still operating.
Easy Start
This plan lets first-time purchasers buy a new home for 85% of the full market value, 5% of which is put down as a deposit. The remaining 80% is found through a mortgage the buyer has arranged in advance, which the rest of the 15% equity is covered by an interest-free loan from the developer. The buyer has to pay this back over a 10-year period.
Deposit Match
This idea was designed to help first-timers who are finding it hard to save enough money for a deposit. They need to come up with a 5% deposit and then the house builder will match a further 5% toward the overall deposit through a 10-year, interest-free loan. The higher the deposit, typically the more you can borrow, so this could help by doubling the deposit.
Friends and Family Advantage
If you can get friends or family to help with a maximum of 20% towards the full purchase price of a new property, they will 5% interest a year on this investment over the next five years. This offer is worth talking to other developers to see if they'll do something similar. You have to weigh up whether this is a good return for the family and friends who have come to the rescue, of course, by comparing interest rates directly with banks and building societies.
Head Start
A hard-pressed first-timer purchaser can buy new property for 85% of the asking price, and the remaining 15% can be paid back to Barratt Homes over 10 years in the form of an interest-free loan. If you sell the property, you have to pay the remained before you move on. This could help cut down on upfront costs and give you a chance to get a better mortgage deal from a lender, as you only need an 80% mortgage then (with only a 5% deposit required).
David Wilson Homes also offer a Head Start programme, very similar to Barratt's. This one is deferred payment scheme, where buyers pay 85% of the asking price and the developer again cover the remaining 15% with an interest-free loan that has to be paid back in 10 years. The house builder might also pay 5% of the deposit through its 5% deposit paid incentive.
Helping Hand
The developer, this time Hillreed Homes, defers 10% of the value of the home, and like the other schemes, you pay back the money at any time over the next decade. Also, the house builder offers to put up 5% towards your deposit.
EasyBuy
Again, you own 100% of your property right of the bat by only coming up with 85% of the purchase price upfront, while the house builder, Crest Nicholson, lends you the other 15% that you have to pay back within 10-year period. The developer will pay 5% of the deposit, like many of the others, while it combines this with a 90% mortgage deal with a lender.
MyWay
First-timers pay 80% of the price, while Miller Homes offers the remaining 20% that the buyer has to pay back within a decade. Miller also will double any deposit saved, up to a maximum of 5,000 pounds.
Bank of Mum and Dad
You might be keen to buy your first home, so you can escape the clutches of Mum and Dad, and all that living under the roof of the family home entails. This is completely understandable, but increasingly getting parental ฝากขายทาวน์เฮ้าส์ help is way of getting onto the property ladder.
As Winston Churchill once wryly observed, 'Saving is a fine thing. Especially when your parents have done it for you.'
It's not surprising that first-time buyers, generally on lower salaries, are looking for extra funding from their parents to get on the housing ladder. That crucial first rung of the ladder does seem to be slipping out of reach for a number of first-time buyers, and if parents are willing to either loan or give their children some of their inheritance in advance in form of a deposit on a house, it does make sense.
Taking the parents' income and/or saving into account can certainly help a first-time buyer trying to get a mortgage. There are even special mortgages you can take out, called guarantor mortgages, where the parents essentially guarantee the payments of the lender is concerned about the ability of the first-time buyer to keep up payments. As these change on a regular basis, I can't really include them now, but it's worth checking what is available at the time you are interested in exploring this way of funding a mortgage.
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