MSB Solicitors Liverpool
Earlier this month, research carried our by Hamptons International revealed it takes the average single buyer in the UK almost 12 years to save for their first home, based on raising a 15% deposit investment.  
However, increasing availability of loans of 90% or more (up by 1.2% in the final quarter of 2016 than the previous year) coupled with falling mortgage rates, paints a more positive picture for first time buyers.
The cost of borrowing at over 95% has fallen by more than other types of loans and could cut the saving time for first time buyers to just four years.
A heartening statistic, maybe. But Tracey Quirk, partner and head of residential property at MSB Solicitors warns that the devil is in the detail for those with little or no experience in the market. She says that it still helps to have as big a deposit as you can manage.  
“It is tempting to think that those savings could in fact be invested into furnishing your first home, but that is at your own peril,” says Tracey.
“Whilst we are seeing some lenders offering higher loan to value (LTV) mortgages, the fact remains that the bigger deposit you bring to the table, the better deal you will get on your first home – and many lenders still insist on a deposit of at least 10%.
“Of course, increasing availability of higher LTV loans can make a big difference to the period a first time buyer needs to save – but consider too that this will  impact significantly on your repayment period.
“My advice would be, even if you have to eat corned beef hash for tea every night for six months, put a temporary halt on holidays and spend Saturday nights in front of the TV rather than on the town, do it. Save up as much as you possibly can in advance of applying for a mortgage. If nothing else, it will demonstrate to lenders that you are serious about owning your own home.”
Conversely, Tracey says that being a super saver doesn’t necessarily score you brownie points in terms of enhancing your credit.
“Mortgage lenders use credit reference agencies to assess ability to pay off a loan. It might be a good idea, a few months before you apply, to go over your credit files with Experian, Equifax and Call Credit to check for any potentially damaging errors to give yourself enough time to put it right.
“Lenders like to see a track record of you handling credit. Frustratingly for many, being a good saver gets you no points here. But if you have a credit card that you pay off in full each month, that will work in your favour.”
She adds that factoring in hidden costs can also help smooth the process.
“It is important to be aware of all the costs involved in buying a property. In particular, be aware that many mortgages come with hefty arrangement fees. Make sure you build these into your budget.”
For more advice on buying your first home, contact MSB today on 0151 281 9040

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