How to access the property market
If you're looking to buy properties for sale for the first time you're sure to need some advice on how to go about the process.
Firstly, you'll need to work out if you already have the necessary funds or can save up for a deposit.
And what happens if you don't think you can save up the required sum? Certainly, this is the case with many if recent research is to be believed.
A study by the Post Office showed that 53 per cent of people between the ages of 25 and 34 believe that they will not be able to afford to purchase properties for sale.
Luckily, this doesn't have to be a barrier to home ownership, as the government has a low cost home ownership scheme if you cannot afford a large deposit.
This includes an equity loan scheme, whereby you can be given a loan towards the cost of a property's price and will not have to pay back any fees for five years.
Then there's the shared ownership option, where you only own a portion of a house and pay rent on the remainder, which could be a good solution for some.
Nitesh Patel, housing economist at Halifax, said: "The Low Cost Home Ownership sector is small, but it is very important as it brings together builders, buyers, mortgage lenders and the government in helping some buyers onto the housing ladder."
Alternatively, you might prefer to buy a home with a partner, friends or family so that you only have to contribute towards a portion of a deposit.
However, good news for FTBs was also offered by the National Association of Estate Agents (NAEA's) market report for July, which showed that in this month the proportion of sales made to FTBs was 21 per cent, compared to 20 per cent in June.
This suggests that the mortgage finance is available, so just how do you go about saving up for a deposit if you think this is feasible?
One way of making this process easier is to set up a direct debit so that money is automatically transferred from your current account to a savings account, preferably as soon as wages come in so that you don't have time to miss the extra cash.
Another option is to store money in an Isa account, which could be a wise choice when interest rates are at a low 0.5 per cent and many savings accounts do not give a good return.
It's also worth going through your incomings and outgoings before drawing up a monthly budget, which should be realistic so that you stick to it.
When you've saved up enough money for a deposit it's time to start carrying out a property search, which you should do with an idea of what you can afford in mind.
This should include the price of a home, moving costs and perhaps the money that will be needed to furnish the house.
Then you'll begin to start thinking about the right mortgage to choose.
Fixed, tracker, standard or discount? These words may not mean much to you at the moment but they soon will.
A fixed rate mortgage has the interest rate fixed for a set amount of time, while if you get a standard mortgage you'll find that the interest rates on it fluctuate according to the standard interest rate of the provider.
Meanwhile, you will pay different interest rates on a tracker mortgage according to the Bank of England's base rate, which could initially be a tempting prospect given the low 0.5 per cent rate at present, but may not be the right mortgage option for you in the long term.
Then there's a discount rate mortgage, whereby interest rates fluctuate according to a lender's standard variable rate, but the rate is discounted for a set amount of time.
You'll soon find that there are loads of mortgages potentially available to you, such as Halifax's Head Start Home Saver Mortgage, which may suit some first-time-buyers (FTBs). The company offers to hand £600 to you if you decide to save with them and then take out this product from its FTB range.
Then there's ING Direct's two-year 1.60 per cent discount mortgage with 60 per cent loan-to-value, which also has a 1.90 per cent initial rate payable and APR interest of 3.40 per cent.
Those who have a slightly larger deposit saved up may want to take advantage of NatWest's two year BBR mortgage, which is 50 per cent loan-to-value. The initial rate payable on it is 2.19 per cent and it's a tracker mortgage with four per cent APR interest.
Mortgages are also offered by a whole host of other lenders, among them HSBC, Woolwich, RBS and Santander to name but a few. Visit the National Association of Estate Agents broker powered site at NAEA Mortgages to get a whole of market comparison.
It's crucial that before you make a large financial commitment to a mortgage you carry out plenty of research regardless of which provider you choose.
And of course the whole process can be made easier if you get advice from a regulated NAEA agent. Before you know it, you'll be settling into your new home.
Posted at 09:54 30/08/2011