* But is it all too late?
* Maybe not!
* Hurry before it is!
Finding the right mortgage when buying a home is a very important financial decision in life as it is more often than not the largest single expenditure in people s lives! People will often search the supermarkets shelves for bargains choosing products for the sake of a 1p or 2p saving per item and there s nothing wrong with that; I do it all the time.
Our parents teach us to be frugal with money in our up bringing and we sometimes become animals of habit throughout our lives. Through the generations, inflation has seen prices increase ten fold and who would have thought years ago that the price of a loaf would touch the 1 figure.
The same can be said about UK property, as the housing market has exploded and the average cost of buying a home is nearing the 200,000 figure and this is before we align our currency and interest rate to the euro. Southern Ireland has seen a massive explosion in property prices in the post years of joining the euro and it is now an extremely expensive place to buy property.
By comparison to Eire the UK property market is still cheap and I dread to think what will happen to property prices when the UK eventually aligns itself to the euro and interest rates are reduced to 3.5%. Will we see average UK mortgages at the 250,000 figure? I think so! The truth is that house prices have outstripped incomes and as a result, affordability has become a big, big problem. All is not lost, so, what are the alternatives and how could you become that UK homeowner?
Let us look at some alternatives that could be considered from the unconventional UK mortgages list below,
* Self Certification Mortgages
* Shared ownership
* Parent guarantee schemes
* Buying with friends
* Shared equity schemes
The term self-certification was introduced over a decade ago to help the self-employed to self certify their incomes. Today this same concept exists in the for sole proprietors, the employed, partnerships and a Limited Company.
Self-Certification has limits: most lenders will only allow you to prove your income in this way if you want to borrow up to 75% loan to value, so you will need to put down a substantial deposit. However, some lenders may allow the self-employed and employed to borrow up to 95% on a self-certification basis, without the need for accounts, an accountant s letter or a check on salary.
If you are unable to buy a property outright on the open market, then shared ownership is the ideal solution for you. Shared Ownership is a part buy, part rent scheme, which enables purchasers to buy a home in stages. Purchasers can buy an initial share between 25% and 75% of the value of the property and pay a subsidised rent on the remaining value of the property. Shared ownership properties can be provided by housing associations, housing trusts and local authorities. These organisations try be as flexible as possible with regards to the initial share purchased, but this may be as much as 50% of the market value at some of their developments.
A service charge will normally be payable to cover the cost of communal maintenance. The service charges payable can remain the same whatever percentage you own of your home and continues to be payable should you purchase your home outright where possible. You will need to have sufficient savings to cover the initial cost of home ownership: legal fees and stamp duty for example. You will need to be able to meet the costs of rent, mortgage, service charges and other associated outgoings.
As your income increases, you can buy further shares of your home until you could own 100% of the value and no longer share the ownership with the housing association or trust. The greater the percentage you own, the lower the percentage on which you pay rent. However, if you do not wish to buy more shares in the property, you do not have to. Obviously, the more you own, the less you pay in rent. And, if you can buy your home outright in the future, then no rent will be payable.
Having found the property or shared ownership house of your dreams a good whole of market mortgage broker should then be employed to find the best and cheapest mortgage. Careful searches can reveal 100% shared ownership mortgages that will not require a deposit, even if you have an adverse credit history, 95% self certification mortgages and further information about parent guarantee schemes, buying with friends and shared equity schemes should also be sought.