Find out what buying a home means in 2012 and how you can make the most from your mortgage
Buying a home in Britain for first time buyers and new property investors is now more expensive than ever with at least 10 major lenders announcing a rise in rates for people taking out new deals. According to statistics, more than 1,000,000 people have been affected by major banks and building societies raising their standard variable rates in recent weeks.
Even those lenders which offered guaranteed SVR or fixed rates have had to increase their rates, creating a difficult time for existing borrowers and property buyers who have budgeted their income and interest rates. In addition, this means that first time buyers and property seekers who have yet to secure a mortgage are going to have a tough time getting their dream home.
Taking out a mortgage and buying a house
is tricky business. First time buyers and property investors alike have to research mortgage options from various lenders and find the best one which offers the best total sum amount with the lowest interest rate. Given the market’s recent interest rate rises, buyers are encouraged to read their mortgage documentation carefully to fully predict the extent of interest rate rises in the future.
After comparing mortgage plans and choosing your preferred option, buyers then have to scour the property market to find a reasonably-priced home that is ideal for them and their family. That’s why they need all the help they can get, and with mortgage rates set to steadily increase in 2012, now’s the time to be buying a home before it becomes impossible to invest.
First time buyers were previously offered a stamp duty concession which made buying a new home an affordable option when considering long-term investments. With the end of the concession last month, and the set rise in interest rates set to spike as we move through 2012, buying a home is becoming a more costly venture.
In light of this, buyers are seeking alternative mortgaging plans. For example, interest only mortgages allow the buyer to pay off only the interest on their mortgage plans each month. Interest only mortgages are available for up to 75% loan-to-value rate and offer lower monthly repayments. A capital pay-off plan still needs to be set in place, but with a multitude of competitive ISAs, investments and savings plans available from many different lenders, this makes buying a home more of a reality for those looking to invest in the UK’s recovering property market.