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Residential Mortgages > First Time Buyer Mortgage

Gaining a foothold on the property ladder has become increasingly difficult in recent years thanks to the sustained rise in house prices, getting together the money required for the regular ten percent deposit is a struggle for most people. While it may require some strict budgeting, joining the ranks of homeowners is a good move for many especially when you consider that renting can in many cases cost just as much as mortgage repayments and yet give you nothing to show for it.

Traditionally, mortgage lenders have required a deposit of at least ten percent of the value of the property being bought to be provided by the buyer, in order to grant a mortgage to them. Many potential first time buyers would simply not be able to raise this cash thanks to the high house values, and mortgage lenders realise this which is why most now offer mortgages with much lower deposit requirements. As the mortgage market develops and the period of growth seen in recent years begins to tail off, the lenders are realising that catering to the first time buyer is important to introduce new demand into the housing market.

A more achievable deposit amount for most is around three to five percent, and these are common amounts among lenders offering mortgages tailored towards first time buyers. If you are looking for a mortgage with which to buy your first home then use our mortgage enquiry service, by filling out our simple form you can have our mortgage experts do the searching for you and find you the mortgage product that fits your needs and offers a low interest rate. This service is offered completely free of charge, and you are under no obligation to take the mortgage suggested.

Getting the deposit required is often the biggest challenge that first time buyers face, which is why lenders are beginning to be more flexible on the amount that they require, but also many are offering schemes which allow for family or friends of the buyer to help out. There are ones for example which allow the would-be buyer's parents to use their home as collateral to cover the required deposit, for example.

There are many options available to you when taking out a mortgage, with a large variety of repayment plans as well as the length of time that you decide to spread the repayments over. In basic terms you will have the choice between fixed rate and variable rate, with a number of variations along these themes.

The other main choice will be whether to opt for an interest only or a repayment mortgage, with the former of these you only pay the accrued interest each month and the capital amount (the money that you have borrowed) remains the same, with a repayment mortgage the monthly payment covers the interest as well as paying off some of the capital.

Each of the many different mortgage types have their own advantages and disadvantages, interest only mortgages for example will generally require lower monthly payments, however you will need to plan how you will clear the capital before the end of the mortgage. Capped rate mortgages allow you to benefit from any drops in the Bank of England base rate, while protecting you from any big rises by having a limit on how high they can go, but they will have less favourable rates than standard variable rate mortgages in times when base rates remain low.

While it may be a financially difficult time making this first move onto the property ladder, once you do have a foothold things will get easier for you, especially if the house prices continue to rise as your mortgage in terms of a percentage of the house will effectively fall and you will have access to more equity when you decide to sell and move on.

As you can see, there are plenty of options available to you, if you do want assistance in finding a suitable mortgage for your needs and circumstances then you should make use of our free mortgage enquiry service.