As the British economy recovers, it is becoming easier to get a mortgage - even if you are a first-time buyer. A combination of government initiatives, lender competition and greater confidence in the market mean the choice of deals is now as good as it has been in the last five years.
However, if you're looking to get onto the property ladder it can still be tough to find the right deal for you. So here are three great little known tips to help you to find the mortgage you need.
Help to Buy
The Independent reports that "the government-backed [Help to Buy] scheme has definitely increased the availability of high loan-to-value mortgages and given a real fillip to market sentiment." Two state-backed lenders are already offing 95% mortgages under Help to Buy with further companies expected to join them in the New Year.
"While Help to Buy schemes are available you should still shop around before choosing a 95% loan," says Keith Osborne, editor of Whathouse.co.uk. "While there may be more low-deposit mortgages available the cost of these hasn't fallen in the way the government may have hoped. It can pay to look at both Help to Buy schemes and the wider market to find the right deal."
Approach your regional specialists
If you're struggling to get a mortgage from a High Street lender it can pay to approach one of your regional building societies. ‘Local loans' are offered by many mutuals including the Cambridge, Nottingham, Market Harborough and Monmouthshire building societies and rates are competitive compared to the Help to Buy products.
Charlotte Nelson from data analysts Moneyfacts says: "First-time buyers should look closer to home for a mortgage as many local building societies offer great 95% deals but to local residents only."
Shared ownership
Under a shared appreciation scheme you use a mortgage to buy a proportion of a property. You then pay rent for the remainder and, over time, you borrow more money as you can afford it and the percentage owned increases to 100%.
"Shared ownership is an alternative way for buyers to reach their dream of homeownership in a more affordable way by purchasing a share and paying rent on the remainder - often the combined monthly costs are significantly lower than renting in a similar area," says Kush Rawal, of Thames Valley Housing.
Osborne adds: "If you're considering shared appreciation it is worth remembering that you can incur fees every time you buy an additional share of your home. You should also speak to a mortgage broker for advice on which lenders offer this type of mortgage scheme."
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