02.03.2020

Is yours big enough?

Is yours big enough?

How big is your deposit and is it big enough to buy a home? 
Read on....

So you have been squirreling away a home deposit for a while and you are earning enough to afford a mortgage (4.5 times your salary on average), except that the options are very slim because property prices keep going up which depletes the amount you save by a factor of 10%. Every £1 you save the property prices increase by 8-10% per annum.
Over the past 10 years property prices have doubled and the previous 10 years and the previous and so on. 

But wait, there’s more bad news, you need to also have stamp duty for anything over £300,000 as a first home buyer. Or 2% on 125k to 250k if you are moving house and 5% stamp duty above £250,000 and the there’s professional fees £2-£5000 on average.
This stamp duty needs to be saved seperately in most cases. 

The Good News is that there are established non-government lenders out there that will help you with a deposit. These lenders typically deal through intermediaries like myself or you can go direct and come to me for an overview of the best in market for your purchase.

EXAMPLE 1 (Residential Mortgage)

Deposit             £41,000
Bank loan         £184,500 (based on salary £41,000)
Total                 £225,500 to purchase a property (possible studio flat London)

EXAMPLE 2 (Residential Equity 1st and 2nd Mortgage)

Deposit             £41,000
Bank loan         £184,500 (based on salary £41,000)
Equity loan       £75,200 (interest only second mortgage)
Total                 £300,700 to purchase a property (possible 1-2 bed flat London)

Q. So what is the difference between Help to Buy, 'Shared equity' and an Equity deposit loan?
A.

  1. An equity loan (for deposit purposes) charges interest where Help to Buy does not for the first five years
  2.  Shared equity and Help to buy are government schemes for approved new build properties only.
  3.  All schemes only have a small number of lenders available for the first charge (Bank) mortgage.
  4.  Shared ownership you only own a percentage of the property (typically under 50%) and are expected to pay all of upkeep, repairs and also pay rent for the difference with a lesser controlling influence. It is also shared equity because each party owns a percentage regardless of what its sold for in the future. 
  5.  Help to Buy you own 100% of your property.
  6.  Equity deposit you own 100% of the property.
  7.  Equity deposit you have much larger choices of property as you are not restricted to new builds.

    If you would like to know more about this and if you qualify for this or other mortgage products surrounding property ownership. Drop me a line and I will be happy to assist FREE of charge for basic overview and FREE of charge for new customers. 

    Phone Chris 0203 538 5671

    www.exclusivefinancial.co.uk

 

 

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Exclusive Financial has over 11 years experience in the mortgage and protection field. We help our clients acheive their goals in life and protect their assets and their loved ones throughout their…

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