Can I get a buy to let mortgage as a first-time buyer?

Investing in buy to let property makes a great deal of sense, said the British Landlord Association (BLA) in an article on the 18th of May 2020 – while at the same time also warning that it is by no means a route to getting rich quick.

Being a landlord is no walk in the park, insists the BLA, and it is likely to come with its moments of stress, hard work and, above all, good judgment in your investment decisions. A lot of the qualities it is going to take might require a mature head and at least a little experience of the property market in general.

The question arises, therefore, whether you are likely to be cut out for the role of a landlord if you are a first-time buyer – and, more critically perhaps, whether you are even likely to get a mortgage as such an investor.

Although a buy to let (BTL) mortgage for a first-time buyer is perfectly feasible, it is likely to be a more challenging process than for those who have proven experience in the…

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Shared ownership mortgages explained

During the summer of 2020, applications for shared ownership contracts with a particular housing association have rocketed, revealed a report by the BBC. Where the association receives typically around 50 applications a week, during July, it was receiving 1,000.

In addition to those applicants on lower incomes, the association was now also receiving requests from key workers such as nurses, police officers and teachers.

The news comes at a time when first-time buyers are finding it increasingly difficult to secure an affordable standard mortgage, according to a report in the Guardian newspaper recently. Against that background, shared ownership certainly offers a solution – and, fortunately, home ownership scheme mortgages continue to be available.

What are shared ownership mortgages?

A shared ownership mortgage is a long-term loan that allows you to buy a percentage in a shared ownership home, where you are buying part o…

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What are guarantor mortgages?

The principal concern of any lender is to ensure that borrowing is repaid, with interest, and on time.

Where the borrower’s history or financial circumstances raise doubts about the certainty of a loan being repaid, the way might be smoothed by someone with proven financial reliability acting as guarantor.

Guarantor mortgages

That is the principle behind guarantor mortgages. An approved individual may be called upon to stand as your guarantor if the lender raises any of the following reasons for doubt in your capacity to repay a loan:

your current income does not readily support a mortgage of the size you need – the backing of a guarantor might help you get it; you are too young to have been able to build up a credit history from which the lender might assess your creditworthiness; you have a poor credit history – and a guarantor steps up to ensure that mortgage repayments will be made even if you default; or you have an insufficient d…
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How can my family help me buy a house?

In the summer of 2020, when the UK started to emerge from lockdown, the release of pent-up demand and a revived housing market prompted a surge in transactions and an increase in house prices. The average house price reached a record £224,123, reported the Guardian newspaper – a rise of 3.7% in the previous 12 months.

The surge in house prices almost certainly came as bad news to first time buyers already struggling to put together a deposit, so predictions that prices are set to fall again over the coming 12 months might have seemed a welcome break.

But according to a story in the Financial Times recently, even if house prices fell by as much as 20%, first-time buyers would still have a more challenging time getting that first step on the housing ladder than they would have done just a year ago.

Family mortgages

Against such a depressing background, first-time buyers may be looking increasingly to their family to help with the purchase of t…

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What is a spring board mortgage?

First-time buyers have always found it challenging to get that critical initial step on the housing ladder. In a report on the 13th of August 2020, the BBC advanced four reasons why these hopeful buyers in the United Kingdom might find it more difficult than ever:

with lenders looking for larger deposits, first-time buyers who save 5% of their income for a deposit may need as long as 30 years’ to save enough; an estimated half of all 25 to 34-year-olds who are currently renting simply do not have any savings; given the lower-valued homes in which first-time buyers will be interested, the stamp duty holiday available until the end of March 2021 is of no relevance; and employment prospects may be patchy and require candidates to move to a different part of the country – a steep expense in itself.

In a story dated the 1st of July 2020, therefore, the Financial Times predicted that the “bank of Mum and Dad” would continue to help support the attempts of a …

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