Getting onto the property ladder within the current economic crisis for many people is a major struggle. With debt levels increasing year over year and household incomes dropping because of increased fuel duty and VAT recently rising from 17.5% to 20%, there is little reason why the amount of people renting has substantially increased. Considering that rent is usually higher than it would be when on a mortgage it’s easy to understand the frustration for many people.
Even though current mortgage prices are the lowest they have ever been since the data provider Moneyfacts began recording rates in 1988. First time buyers have been locked out of the property market by the initial deposit that is required. With the current choice between tracker and fixed mortgages, the better deals can currently be found within the tracker mortgages, where you can find very low monthly interest but at a cost of a deposit as high as 35%, with the added risk of the interest being significantly increased. Therefore only suitable for people who can afford this if and when it happens.This alone is the main issue for many, who are only able to take on a mortgage with a smaller deposit but will require larger monthly sums, but security for many is key. Currently, higher loan-to-value mortgages that require a deposit of 10%-15% are on the rise and may be something to consider.
When it comes down to it, knowing how long you plan on living in your new home can make the decision for many. If you plan on staying long term then why not go for the 10% to 15%, especially when trying to save for a deposit within the current economic conditions may be very difficult for some but in a position when a home is required.
Obtaining advice from a professional mortgage adviser or commercial property consultants may turn out to be useful before taking the lunge, depending on the use of the property. As market condition fluctuate and with recommendations and experience you may be able to receive valuable information and can help save yourself from making a potential mistake. Or if you simply need confirmation that your decision is the right one then it may also be worthwhile.
Especially with the potential of having negate equity it is important to buy at the right time with the right kind of mortgage.