There has been a change in the way that mortgage lenders in the UK assess their approval of loans as well as a review of their policies toward re-mortgages for existing borrowers. Some people who had been planning to buy their own home have reported that they are in a state of confusion and often on the receiving end of misinformation about the options that may be available to them.
Aspirations of property ownership with polished floors, modern bathrooms, designer furnishings and space to entertain friends and family have been set aside. Families with growing children who need more space have been stuck in a limbo, struggling to find space to accommodate everyone's needs. House prices have mostly stayed level, anyone who was hoping for a dramatic fall in prices that would allow them to hop on the property ladder for the first time has been disappointed.
It is unlikely that we will return to the heady days of 110% mortgages any time soon, however the good news is that the situation of mortgage lending is becoming clearer and a good mortgage broker will be aware of and up to date with these changes. Most lenders will require a deposit, this amount will depend upon the individual lender and the purchase price.
Borrowing money from family or friends may be a good option, parents and grandparents may be pleased to help, various tax breaks and issues including inheritance tax can be addressed by a good advisor. This is an increasingly popular solution for many first time buyers and for families with children who need to move, extend or improve their home.
The 'Bank of Mum & Dad' is something of a cliche now but still a realistic option for many new home buyers or expanding families. One benefit of the boom has been that many people over 45 have considerable equity available in their property and a good credit rating thus giving them access to a re-mortgage from a variety of lenders. Or they may have savings and investments that they are willing to loan or gift to their children.
Internet comparison sites are a useful source of information and often highlight the best rates but check carefully for terms and conditions. A regular bank or building society may be a good starting point when considering applying for mortgages but it would be reckless to ignore the opportunity to talk to a specialist who has access to a wider range of financial products and can advise on deposits, fixed rates, tie in deals and fees that will be required from each mortgage lender.
Re-mortgaging a property with substantial equity is usually a straightforward process. New mortgage applications need not be complicated. Have an informal chat with a mortgage broker to find out what your family's options may be. Dreams of buying a first home, expanding a family or extending a current home can still be achieved.
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