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Halifax offers first-time buyers bigger mortgages of up to 5.5 times income: Is it a good idea?

September 2, 2024September 2, 2024 interestratesinfo

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First-time buyers could now be able to secure bigger mortgages when applying with Halifax.

The mortgage lender announced today that it is making £2billion available for first-time buyers who need to borrow up to 5.5 times their annual income.

To be eligible for what Halifax is calling its ‘First-time buyer boost,’ buyers will need a total household income of £50,000 or more, which will need to come from employment.

They will also need to be purchasing a property with a deposit of at least 10 per cent.

First Time Buyer mortgage payments show big drop from peak

September 2, 2024September 2, 2024 interestratesinfo

Rightmove says the average first-time buyer mortgage payment is nearly £150 lower than the mortgage rate peak in July 2023.

Rightmove’s weekly mortgage tracker shows how average mortgage rates have decreased since the peak in July 2023. The average monthly mortgage payment for a typical first-time buyer is now £949, compared with £1,096 in July 2023, a saving of nearly £150 (£147), or 13%.

Why the first-time buyer scheme Labour says will get 80,000 young people on the housing ladder WON’T work

August 27, 2024August 27, 2024 interestratesinfo

The government’s plan to get 80,000 young people on the housing ladder with a permanent mortgage guarantee scheme may not have the desired impact, new figures have revealed.

Labour has pledged to make the previously-temporary scheme a permanent fixture as part of a package of measures to boost the housing market.

The mortgage guarantee scheme allows lenders to provide 95% mortgages to households with the backing of the government.

Bank of Mum and Dad to lend £30bn to first-time buyers over next three years – Savills

August 20, 2024August 20, 2024 interestratesinfo

Some £30bn is expected to be gifted to first-time buyers in the next three years, according to estate agency group Savills.

Last year £9.4 billion was gifted to 164,000 first-time buyers, accounting for a huge 57% of all mortgaged first-time buyers.

Frances McDonald, director of residential research at Savills, said: “While many homebuyers enjoyed record-low interest rates during the early part of the decade, more stringent mortgage requirements, which have been in place since the start of the pandemic, have impacted higher-loan-to-value (LTV) lending, most commonly used by first-time buyers.

First Time Buyers purchase further away to find affordable homes

August 12, 2024August 12, 2024 interestratesinfo

Moving further away from family, friends and familiar places to get onto the property ladder is becoming more common for first-time buyers, according to new research from Santander UK.

Extrapolating a survey it commissioned, it claims two thirds of Britons who bought their first home in the last two years had never seen their new neighbourhood before buying, compared to just over half (51%) of those who bought more than five years ago.

First-time buyer pitfalls: Finance expert warns of ‘common costly mistake’

August 12, 2024 interestratesinfo

People aiming to profit from their property could be making a significant and costly error in how they calculate their income.

Real estate is often viewed as one of the most valuable investments, especially if you plan to rent out the property, but a common oversight can lead to a hefty cost in the future, as one expert has pointed out.

Former financial advisor Joe Saul-Sehy, speaking on the Afford Anything podcast with Paula Pant, warned that first-time buyers frequently misjudge their gross and net income from the property because they neglect to set aside an emergency fund for it.

He advised landlords to allocate some of their rental income for future maintenance, cautioning: “For people squeezing as much water out of that sponge as they can get, (they) might also be robbing that account, which is a mistake.”

10 essential questions to ask your mortgage lender before borrowing

August 5, 2024August 5, 2024 interestratesinfo

Buying a home can still be a smart move in today’s high-rate environment, of course, provided that the financials make sense for your budget. But given today’s elevated home buying costs, it’s crucial to gather all the information you need before making this substantial investment.

First-time buyers spending 40% of pay on mortgages

August 5, 2024August 5, 2024 interestratesinfo

People buying a house for the first time are spending about 37% of their take-home pay on mortgage payments, according to the Nationwide.

The figure is well above the long-term average of 30%, the building society said, making it tougher for new buyers to afford a house.

House price growth picked up in the year to July as wages rose, it added.

Prices increased by 2.1% over the year, the fastest pace since December 2022.

Some people were feeling more confident about getting a mortgage as their pay packets went up, Nationwide chief economist Robert Gardner said.

But relatively high mortgage rates and affordability issues also acted as a brake for prospective buyers.

What can I do about my mortgage now the base rate has been cut?

August 5, 2024August 5, 2024 interestratesinfo

Last week’s Bank of England interest rate cut, the first since 2020, spelled good news for millions of homeowners and would-be buyers – but it has also given them lots to think about.

If you are looking to buy a home, what sort of mortgage do you go for, and is this going to push house prices even higher? And if your existing mortgage deal is about to end, should you grab another one right now, or hold fire in case lenders launch cheaper products?

The cut, from 5.25% to 5%, should translate into lower borrowing costs for homeowners with a base rate tracker mortgage, or whose monthly payments are linked to their lender’s standard variable rate (SVR).

However, almost 7m of the UK’s 8.4m existing residential mortgages are on a fixed rate, so most people won’t see any change. A chunk will, however, need to consider their options over the next few months because their current deal is coming to an end.

Here we round up some of the advice from mortgage brokers.

I got £12,000 free cash using little-known trick to buy £228k first-home at 26

July 29, 2024July 29, 2024 interestratesinfo

PERSONAL assistant Aimee Shipp always wanted to own a home – and skipped University and getting a degree so she could start saving aged 18.

At just 26, the savvy saver bought a £228,000 flat in Harlow, Essex as she worked as a personal assistant.

In her first job, aged 18, she started saving for a house deposit.

She was being paid £32,000 a year, despite having no higher education qualifications.

By 20, this had risen to £35,000 and by 22 she was earning £38,000 a year as a PA.

Aimee said: “I didn’t want to go to university and get saddled with debt, I wanted to get a job and save to buy a home of my own, so that is exactly what I did.”

Last year, she finally decided she had saved enough money to put down a deposit on a home of her own, so started to search for apartments she could afford.