LETTERS
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Please send us your questions, comments and suggestions concerning property, or the articles in First Time Buyer magazine.
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LOAN-TO-VALUE I keep hearing the term “loan-to-value” and know that it is important, but I’m not entirely sure what it means.What does it involve and how important is it? Marvin West
FTB says: Loan-to-value (LTV) plays a pivotal role in mortgage transactions, affecting both lenders and borrowers. LTV is a measure, used when getting a mortgage, to show the ratio of the loan amount to the appraised value or purchase price of a property. It’s crucial for assessing risk, determining lending criteria and setting interest rates. Higher LTV ratios signify greater risk for lenders and may lead to higher interest rates or the requirement of mortgage insurance. For borrowers, a lower LTV means more equity in the property, offering benefits such as better loan terms and easier access to home equity.
CHILDCARE COSTS My partner and I are wanting to get on to the property ladder but we are concerned that the high childcare costs we currently have could hamper our mortgage application. Will this be the case? Will Dewdon FTB says: Childcare costs can indeed impact a mortgage decision. When applying for a mortgage, lenders typically assess the borrower’s income and expenses to determine their affordability and creditworthiness. Childcare costs are considered a significant expense and can affect the borrower’s debt-to-income ratio, which is a crucial factor in mortgage approval. It’s essential for people such as yourselves, considering a mortgage, to thoroughly evaluate your financial situation, including childcare expenses, and work with lenders or financial advisers to determine a realistic budget and mortgage affordability. It’s best to speak to a mortgage adviser who can give you advice based on your circumstances.
This issue’s star letter prize wins a copy of Prospect Cottage: Derek Jarman’s House from photographer Gilbert McCarragher, worth £25 and published by Thames & Hudson. This book invites readers into the personal sanctuary of the iconic artist for the very first time. While the gardens of Prospect Cottage in Dungeness are much visited and widely known, few people have seen inside his house. All of the doors have windows in them, etched by Jarman with flowers or poems. In the studio, paints and power tools are scattered across the STAMP DUTY What are the current Stamp Duty rates for first time buyers and what is Stamp Duty Relief? Chloe Farrington FTB says: First time buyers in England and Northern Ireland are exempt from Stamp Duty on properties up to £425,000. For properties costing between £425,001 to £625,000 you’ll pay 5% Stamp Duty, but only
LIFETIME ISA AND SHARED OWNERSHIP
VISIT OUR WEBSITE For everything you need to know about buying for the first time, go to firsttimebuyermag.com eligibility (you must be a first time buyer), property value limit (the property does not exceed £450,000) and that you have met any conditions set out in your LISA as well. Again, it’s advisable to consult with a financial adviser or mortgage broker who can provide personalised advice based on your specific circumstances. the purchase of a first home, including shared ownership properties, as long as certain conditions are met. Some key points to consider are:
I have spent a long time trying to save enough to be able to get on to the property ladder. I took advantage of a Lifetime ISA and I have managed to accumulate a total of £7,000, which falls short of what I really need. Consequently, I have been exploring the option of shared ownership. Can I utilise the deposit from my Lifetime ISA for the shared ownership scheme? Bradley Waters FTB says:Yes, you can use a Lifetime ISA (LISA) to help buy a shared ownership property. The funds saved in a LISA can be used towards
work table and many of the decorative objects are beachcombed finds, testament to the way the local environment served as inspiration to him. Available from Amazon and leading book shops.
on the value above £425,000. Properties over £625,000 follow standard Stamp Duty rates. First Time Buyer Stamp Duty Relief is a measure designed by the Government to make it easier for people get on the property ladder following the guidelines above. It’s worth noting that Stamp Duty is set to change again in April 2025 so it’s a good time to make use of this tax relief while it’s available.
First Time Buyer June/July 2024 7
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