Mortgage Incentive Schemes For First Time Buyers
Incentivised mortgages can give first time buyers the boost they need to get on the property ladder.
Over the last few years, first time buyers have been subject to greater and greater difficulty when trying to obtain a mortgage. However, with the recent upswing in the property market, lenders are beginning to reintroduce incentivised mortgages on to the market, specifically aimed at those trying to get on the property ladder for the first time.
If you are still at the point of trying to save a deposit, it is now possible to receive cash bonuses that can make a real difference to you achieving your goal. Some major UK lenders are offering lump sums to first time buyers who take out a mortgage and deposit money regularly into a savings account at the same time.
Save-to-Buy schemes work in a similar way, offering cash back rewards for meeting savings goals. This is reminiscent of the system two decades ago, in which first time buyers were obligated to prove they could save money on a regular basis before they would be considered for a mortgage.
At the height of the property boom in 2006, it was common for lenders to offer first time buyers great deals on 95% or even 100% mortgages. These swiftly disappeared at the beginning of the economic downturn, but a handful of lenders across the UK are now starting to offer such products again. Be wary in pursuing these deals though, as new regulations mean that banks are obligated to set aside six times more capital for low deposit mortgages than they were when these products were previously available. This means the interest rates will be significantly increased to cover this.
Innovative New Schemes For First Time Buyers
In order to breathe life back into the housing market, lenders are becoming increasingly competitive and innovative in the creation of incentivised mortgage products aimed at first time buyers. Some of the deals even take into account how much rent you have previously paid on a property.
Here is a list of some of the different types of incentivesed mortgage currently available to eligible candidates:
- Graduate mortgages
- Professional mortgages
- Shared ownership mortgages
- Shared equity mortgages
- Friends and Family mortgages
- Guarantor mortgages
- Key Worker mortgages
- Poor Credit mortgages
- Cashback mortgages
It is important that you go into a mortgage deal with your eyes open. Taking out a mortgage is one of the biggest commitments that you will ever have to make, so it is essential to be sure you have the right product. As a first time buyer, this can be terribly difficult to ascertain without expert advice. You should always hire a professional mortgage broker. Mortgage brokers have an in-depth knowledge of the market and will be able to advise you on every aspect of why any mortgage deal will or will not work for you.
Get quotes from mortgage conveyancers on our site to get expert advice for first time buyers. Our panel of conveyancing companies have the experience to help you understand all the scheme available. Get a quotation and they will be able to provide you with free advice.