Financial Updates

Since the banking crisis many buyers have reported they find it much more difficult to get a mortgage than they would have had the crisis not occurred. But, thanks to innovative schemes set up to help home buyers, you could be looking at homes for sale sooner than you think!

The economy

The banking crisis and the ensuing economic problems has exposed deep rifts among economists who disagree over the causality of the banking collapse and the right way to navigate out of it. However, there is a broad consensus the boom years lead to excesses in the availability of credit. The 100% percent mortgage, where buyers needed no deposit, has become a thing of the past. While banks always rewarded those that were able to pay a percentage of their home in cash, it’s now seen as a prerequisite to getting a mortgage.

Some people view the current economy as a reason to hold off on looking at homes for sale. With the contraction in the availability of credit, so the logic goes, you’ll be unable to finance your purchase. However, the contraction in credit availability mostly applies to riskier, higher leveraged loans. And, additionally, there are lots of other reasons to buy a new home now:

• If you’re moving in to a bigger home or buying a new home, you’ll save money because of the bearish property market;

• Interest rates are low, increasing the affordability of repayments;

• It’s a buyer’s market so you’ll have more leverage in the buying process.

If you’re worried about your ability to save for a deposit, don’t despair. Thanks to many innovative new schemes, you might be able to move in with a much lower deposit than you had ever expected.

Shared equity : Under this scheme you’ll only need a mortgage for 70% of the purchase price of your new home. You pay a 5% deposit and the house builder, in this case Barratt Homes, pays the rest. With Barratt Homes you pay no money on the interest for up to 10 years if you don’t sell the house or transfer ownership to someone else.

Arthur Sperks has extensive knowledge about homes, particularly the property market and new homes. He writes frequently on these subjects and enjoys guest posting on numerous blogs throughout the Internet.