New rescue package to help bank’s start lending again. Gordon Brown will announce plans to guarantee mortgage lending tomorrow. Will this be the news first time buyers have waiting for?

Banks need to start lending again to prevent the housing market sliding further. With little or no confidence in house prices most buyers are sitting on the fence waiting for prices to stabilise before they risk purchasing their next house. This is unlikely to happen until credit becomes available again.

There is hope that the Governments new attempt to stimulate the mortgage market will prevent the housing market crashing even further. Ever since securitisation collapsed in 2007 lending has dried up all but for a few customers with the best credit records and a large deposit.

 The new bail out package which has been recommended by ex-bank boss Sir James Crosby is specifically aimed at boosting the mortgage market. This in turn would help property prices stabilise. It’s the shortage of affordable mortgage loans that is contributing to the slide in house prices. First time buyers have been priced out of the market.

If you want to know more about first time buyer schemes, then contact Click n go Mortgages here.

The Council of Mortgage lenders (CML) have reported that their was only 33,000 new loans granted in November, that’s a 17% reduction compared with last month. First time buyers are finding that they have to put down a large deposit. On average a first time buyer has to put down an 18% deposit of the properties value.

Larger deposits protect lenders from falling house prices. For 95% or even 90% mortgage products to find there way back into the mortgage tables house prices will have to stabilise. When you take a mortgage out the property is used as security against the loan. Banks are restricting there lending to the lowest risk investments therefore providng a wider margin of equity as protection.

The CML predicted that lending would fall further in the next few months.

“Limited mortgage funding and reduced consumer demand will weaken lending activity further in coming months,” said the CML’s director general, Michael Coogan.

“The flow of funds to the mortgage market will not improve this year without further intervention by government,” he warned.

Borrowers are being advise to use any savings from mortgage rate reductions to reduce there loan thus decreasing there loan to value against there property. By doing this you will stand a better chance of getting the best mortgage deal available when your current deal comes to an end.

If you want to know more about first time buyer schemes, then contact Click n go Mortgages here.

My partner and I are lowly first time buyers with a few savings, certainly not enough for a deposit. We rent our slightly shabby 2 bed house, which I long to decorate but don’t want to add value, and are slowly but surely paying off our landlords’ mortgage.

Many times we have been sat in a Bank or Building Society opposite a sympathetic but otherwise unhelpful Mortgage Advisor, who, after informing us that sadly we need a larger deposit and much larger salary, almost runs to the next awaiting couple.

We had heard the terms such as Shared Owneship Mortgage , and Shared Equity Mortgage and basically ignored them, assuming that it was all a con designed to rob us of our rightful place on the property ladder as fully fledged owners. But as time went by and our landlord raised the rent again I decided to put my pre conceptions aside and find out the facts.

My first point of call was our bank, who confirmed that they did not lend on these schemes, so my next contact was a Mortgage Broker. As the Broker explained the difference between the Shared Ownership Mortgage and Shared Equity Mortgage, I found myself listening with interest, then anticipation, and finally excitement; finally there was a way for us to buy our own property.

The Broker explained that if we would consider new builds we could buy a property without a deposit. Initially we would buy 75% of the property value, and buy the remainder over ten years. Because only 75% was required, our salaries were sufficient, and best of all no deposit was required. Apparently the Builder Shared Equity Mortgage has been around for years, to say I was overjoyed is an understatement.

Within a few hours our Shared Equity Mortgage  had been agreed in principal, we had vital information such the maximum we could borrow, and the monthly payments (which was not much more than our current rent). That weekend this couple viewed 3 developments (we actually had a choice), and we were treated with respect by the sales team, after all, we had our finances agreed! We settled on a gorgeous 2 bed terraced with a downstairs loo, heaven!

The moral of this story is that if you talk to the right person, who knows the market and who is familiar with the latest schemes, whether it be Shared Equity Mortgage, Shared Ownership Mortgage, or Open Market Homebuy you can have your very own home to decorate and slowly but surely pay off your own mortgage.

If you want to know more about first time buyer schemes, then contact Click n go Mortgages here.

RICS the Royal Institution of Chartered Surveyors said the housing market has reached a low not seen for 30 years.  First time buyers are struggling to take advantage of falling house prices.

RICs said that the proportion of surveyors reporting falls had improved in the South East, East Anglia, Wales, the South West, Yorkshire, the East Midlands and Northern Ireland.

It was stable in the North, North West and West Midlands but had got worse in Scotland.
Due to the lack of lending property looks to even further in 2009.

You need to have a large deposit to get the lower rates. The best deals are available with a 40% deposit which will secure a rate of 3.99%, expect to pay 6.39% if you can only save a 5% deposit. If you take a £100,000 mortgage over a 25 year term the difference in monthly payments is £144.

First time buyers seem to be divided, some are holding back waiting to see how much further house will fall. Whilst agents are reporting new buyer enquieres increasing for the second month.

If you want to know more about first time buyer schemes, then contact Click n go Mortgages here.

It’s certainly going to be a tough time for first time buyers in 2009.

We still get a hundreds of people asking “Can we still get a 100% mortgage”. The answer is not for a property on the open market. But you can still buy a house without a deposit with a Shared Equity mortgage.

Most people seem to think a Shared Equity is the same as Shared ownership, it’s completely different.  With Shared Equity you own the property there is nobody else on the deeds. With these assisted buying schemes you generally take a mortgage out for 75% of the value of the property and the other 25% equity loan.  If you are buying a property to use as a home then in the long term the housing market is still seen as good for equity gains. The value of houses has increased by more than the rate of inflation. 2009 may well be all about First Time Buyers trying to find a deposit, or maybe a Shared Equity purchase if for you.

If you want to know more about shared ownership & shared equity mortgage schemes, then contact Click n go Mortgages here.