Getting on the property ladder for the first time can be a daunting experience for most people; a mortgage is likely going to be the largest debt an individual will take out during their lifetime and it is important to be aware of the debt agreement you are entering.
A standard mortgage involves the buyer placing a deposit of at least 5% of the purchase price and taking the remainder of the sum as a debt from a lender. The borrower(s) will then make repayments which are inclusive of the borrowed capital and the interest liable on the debt to the lender for the term of the mortgage. This is still the most common route of purchase chosen by first-time buyers.
Help to Buy Scheme:
An alternative is the government Help to Buy scheme which provides first-time buyers assistance with contribution via government help to buy equity loan towards their purchase. The level of contribution is 40% in London with the property price capped at £600,000 and 20% contribution for properties outside of London with the property price cap varying depending on the region of purchase. Borrowers are not liable to pay off the equity loans back until 25 years, however, they will begin to pay interest on the sum based on the Consumer Prices Index + 2%. Borrowers must also put forward a deposit contribution of at least 5% and take the remaining sum as a mortgage from a lender which lends accommodates for help to buy mortgage products. A point to note is that this scheme is only available for new build properties that are registered under to the scheme via the developer.
This description applies to England and that different schemes are available in the other parts of the UK.
Shared Ownership Scheme:
In addition to this, there has been an increase in the use of the Shared Ownership scheme. This scheme allows buyers to purchase a percentage share of the property with a mortgage whilst paying rent and other associated costs for the share they have not purchased. This is proving to be a popular method of purchase for those who do not have a significant sum for a deposit or can only borrow a limited sum of funds from the lender due to factors concerning affordability. It is advised to speak to a solicitor or a tax adviser surrounding the stamp duty implications this method of purchase has.
Your home may be repossessed if you do not keep up repayments on your mortgage.
At Triton Private Finance, we truly understand there are numerous factors that may affect our client’s ability to get on the property ladder for the first time, therefore we perform a full financial assessment to determine the best avenue of lending for you & your needs. It can be stressful, so we hold our client’s hands throughout the entire process to ensure the process is as smooth as possible. Our brokers will liaise with the estate agents, developers, solicitors, and accountants on your behalf, to take the burden off your shoulders. Whilst handling all the administrative duties, we will also educate you about mortgages & insurance to ensure you are well equipped in navigating through your new path.
Triton Private Finance Limited is registered in England and Wales with the company number 13548123. Registered Address: 128 City Road, London, EC1V 2NX.
Triton Private Finance Limited is an Appointed Representative of PRIMIS Mortgage Network which is a trading name of Personal Touch Financial Services Limited. Personal Touch Financial Services Limited is authorised and regulated by the Financial Conduct Authority.
The guidance and/or advice contained in this website is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. The Financial Conduct Authority does not regulate some forms of buy to let mortgages.
This firm usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Try our mortgage repayment/ overpayment calculator, or check out how to review your credit report.
