27 February 2009

The day of the First Time Buyer...

The great ‘new news’ of the week is that Northern Rock have confirmed their intent to lend over the next 2 years and are to increase their product offerings to 90% of the property value. This shows ambition from the lender in dire times, especially for first time buyers. A spokesperson, commenting in trade press added ‘We might do some business at 90%, but we will test this market very carefully.’!
With house prices and interest rates so low, today’s market is veering towards first time buyers. Those with a decent deposit have many many options!
For those with less, or even no deposit, the government has recently launched some ‘initiatives’. But do you even know what’s on offer? It can be confusing……………
- New Build Homebuy – Buy 25% of a newly built property with savings/mortgage (some properties in certain areas) and pay rent on the rest.
- Homebuy Direct – Receive an ‘equity loan’ of 15–30% on the cost of newly built properties (some properties in certain areas). You’ll need to repay the loan when you sell the property. The remainder is obtained via a traditional mortgage.
- Open Market Homebuy – Receive an ‘equity loan’ of up to 50% to buy any property. Remainder covered by a traditional mortgage. Interest charges on the loan apply.
- Rent to Homebuy - There are certain newly built properties that you can rent at an affordable rate – 80% (or less) of the market rent, for up to five years. If you can afford it, at the end of 5 years, you can buy part of the property under the New Build HomeBuy scheme.
You need to be ‘deemed’ eligible and may still need some funds to cover costs such as Stamp Duty, legal fees, etc.
For more information, or advice on all mortgages (including First Time Buyers), speak to AToM or visit our new website at www.atomltd.co.uk

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