Any Positive News for First Time Buyers?

It is hard to find any positive news at the moment however things are looking up for First Time Buyers.

Mortgage Brokers and customers alike are starting to get used to the new stricter lending policies of the Banks and Building Societies. During the Celtic Tiger years there is no doubt that the banks helped to fuel the property boom by reckless lending practices and in particular 100% mortgages. Banks, in hindsight, now realise that they were reckless in the past and have now gone to the other extreme and are being overly prudent. Hopefully over the next several months a happy medium will be found and we will get back to normal lending practices.

What are normal Mortgage lending practices you may ask?
Basically all prospective mortgage customers should be able to show a solid income and two or more of the following

1/ Ability to repay or proven repayment capacity
This can be shown for example by a history of rent payments, previous loan repayments or a consistent savings history.
2/ Proven Access to Deposit
This can be from your own personal savings, a gift from parents or other means. Wherever the deposit is coming you will be asked for bank statements to show the balance and proof they are from an unborrowed source. You will need at least 8% of the property purchase price.
3/ Regular Savings
Saving a regular weekly or monthly amount from your current account into a separate savings account is a great way of increasing your chances of getting a mortgage.

If you are not in a position to get a mortgage now then you need to plan for the future and get yourself into a position where you will be able to get a mortgage. You need to keep your bank account in good order with no missed direct debits and if you can pay your rent or savings as a regular monthly standing order this will also help.

The good news for First Time Buyers is that the stricter lending criteria and hence lack of mortgage approvals is pushing prices even lower. If you can get a mortgage and have access to a deposit then you have great bargaining power. Properties are currently selling for well below their asking prices so don't be put off by over priced properties. Now is the time for cheeky bids, now is the time to grab a bargain. The worst the seller can do is say no.

If you would like to discuss your mortgage options contact MortgageLine