|  With
research* last month showing that the
average cost of a home in England and
Wales has dropped by £3,200 in
the past three months to £195,407,
now is great time for first time buyers
to get their feet on the property ladder.
A
combination of a slowing down of house
price growth (in the five weeks to September
10, annual house price growth slowed
to 1.6 per cent, down from 2.1 per cent
in the previous month), cheaper mortgages
and sellers being more realistic with
their asking prices means that first
time home buyers can take advantage
of these factors and can afford to enter
the property market.
So,
if you are considering that first step
onto the property ladder, then it is
important you make sure you get the
right mortgage - unless you are in the
unusual and very fortunate position
of being a cash buyer that is!
While
there are lot of mortgage products available
for people looking to buy their own
home for the first time, knowing which
is the right one for you to choose can
be extremely difficult. While it may
seem unnecessary, it really is important
that you seek independent advice as
to which product is best for you. What
may look good at the outset could end
up not being suitable for you in the
long run.
For
example, you may think a 100% mortgage
(where you don’t have to put a
deposit down) is a great idea, but are
you aware that if house prices drop,
you could be left in a negative equity
situation? This means that your mortgage
is higher than the value of your house
and each month you would be paying interest
on a loan greater than the real value
of your property.
This
will become a problem because when you
eventually come to move house again,
you may owe the lender thousands of
pounds more than your home is worth.
This happened to a lot of people in
the housing slump at the end of the
1980’s and early 1990’s
and only recently are some of these
people back in the position where they
have equity in their property.
There
are many other considerations when you
take out a first time buyer mortgage
that you may not have thought about,
such as will you be tied in to the one
mortgage lender for a fixed period of
time? Is there a cashback deal? And,
most importantly, can you really afford
the monthly repayments?
There
really is a lot to think about. So,
if you are looking to buy and want to
take advantage of the current housing
market, then go ahead – but do
so carefully. Seek specialist help and
advice so you can get the right mortgage
for you.
• Source: Property website Rightmove.
• Resource: www.polarmortgages.co.uk
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