EXPERTS
Why do mortgage rates change so often and where do I go for help and advice?
Q My partner and I are renting locally in Nine Elms, and we currently pay £2,500 in rent. Consequently, we have only managed to save £15,000 towards our deposit.We are unsure if we’ll ever be able to purchase a property in London of our own as we think our deposit might be too low. Jessica Thorn, Nine Elms A Have you considered shared ownership? Shared ownership new builds have rapidly become the most popular and sought-after buying scheme, not only in London but also within the Home Counties. But why? Shared ownership is a Government-backed scheme that supports and helps thousands of people get on to the property ladder each year. It tends to enable buyers to purchase using a smaller deposit than they would need on the open market.Take New Mansion Square (part of Battersea Power Station regeneration project) for example – you can purchase a one bedroom apartment here with a deposit of around £14,625 in comparison to the UK average in 2023 which was around £53,414 for first time buyers.You’ll then get a mortgage for the remainder of the share you can afford and start paying off the mortgage each month, building your own equity for the future. It’s a no-brainer in itself. In addition to mortgaging the percentage share you can afford to buy, you will also pay the remaining share of subsidised rent to the housing provider. In most cases, this overall monthly cost would be cheaper than renting privately. As mentioned earlier, New Mansion Square, Battersea Power Station, works out to be approximately 25% cheaper a month for a one bedroom apartment A mortgage broker is a professionally qualified person best placed to assess a buyer’s income and expenditure against their personal financial situation.They will match the best mortgage to the buyer’s needs and goals.The mortgage rate available to you will depend on the amount of deposit you have, your credit history, and your income and expenditure. Lenders all have different criteria, and the mortgage broker will match you with the mortgage product that is best suited to your personal circumstances and the type of property and construction. All lenders will have a Standard Variable Rate (SVR); this is their default interest rate which they set themselves.There are various Q I am a first time buyer and I am a little confused about the mortgage market and where to go to for advice. Could you help? I am nearly in the position of wanting to buy my first home. Jamie Thorn, Maidstone A Mortgage rates in the UK do change frequently, due to a variety of factors such as changes in the Bank of England’s base rate, inflation, economic growth, global events, political instability and market competition among lenders. Interest rates can rise or fall, often with lenders giving less than 24 hours’ notice of changing a mortgage product. It’s therefore vitally important that you have all your documents available for your mortgage appointment if you are considering a mortgage product to prevent disappointment. Any delay can see your monthly mortgage payments change significantly and, in some cases, make affordability an issue.
other mortgage products that lenders may offer.These include: Discounted rates – Set at a certain percentage below the SVR.The percentage value is fixed for the length of the deal, which is usually two or five years. Tracker rate – This is the only rate that is determined by an external financial indicator, rather than the lender. This is usually the Bank of England base rate, so your monthly repayments rise and fall in line with it. Fixed rates – A fixed interest rate will not change for the length of the deal. Available for two, three, five or 10 years. It’s essential to note that mortgage rates can fluctuate due to the various factors described, and therefore it is essential to keep track of the mortgage market and seek professional advice from a mortgage broker, such as Censeo, when you are making mortgage- related decisions.
Rupi Hunjan
Can we get on the property ladder?
through shared ownership, than it would to rent privately.With rising rent costs across London and Home Counties there’s no better time to be taking your next steps on to the property ladder. Lastly, a new build home itself comes with its perks.You are the first legal occupier, with freshly painted walls, brand new kitchens, bathrooms and appliances.Warranties provide a reassurance worth their weight in gold. Internally, the defects liability period is a period where the contractor will return to remedy defects; while externally, the NHBC/Premier guarantee is a 10-year construction warranty covering external elements of the building. Find your place today with Peabody New Homes and benefit from low deposits on a range of new shared ownership homes, available across London and the Home Counties.
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Sam Cox
For information about low deposits on new shared ownership homes visit peabodynewhomes.co.uk/deposits/
First Time Buyer June/July 2024 127
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