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Possible lower deposits for first time buyers

August 6, 2009 by admin  
Filed under News, News-Mortgages

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It has been claimed that many could find that they are able to get mortgages with lower deposits over the course of this summer, following a turbulent period where lenders have been demanding sky-high deposits that first time buyers simply cannot afford, which has further impacted on the downfall of the property market.

The high deposits that have been demanded have made it difficult for first time buyers to get onto the property ladder even though property prices have been falling.

Many first time buyers were hoping to take advantage of falling house prices coupled with rock bottom interest rates, which they though would enable them to get onto the property ladder.

However, as a result of the global credit crunch lenders have vastly increase the deposit levels that they are demanding from borrowers, and since first time buyers have no previous property from which to take equity this has meant that they have been unable to afford the mortgage.

Since the onset of the credit crunch the 125 percent and 100 percent mortgages that were always very popular with first time buyers have disappeared from the market, and most lenders will not look at 95 percent mortgages, which were once the standard. Some lenders have been demanding deposits of 25 percent or even 40 percent of the property value, which is an amount that has been impossible for the average first time buyer to afford.

Some industry experts have now said that over the course of this summer some first time buyers could find that they are able to get a mortgage with a deposit of just 10 percent of the property value, which is far lower than most lenders have been demanding over the past year.

Tags: first time buyers, low deposit mortgages, credit, downfall, deposit, previous property

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Comments

One Response to “Possible lower deposits for first time buyers”
  1. Simon @ shrewdcookie.com says:
    August 9, 2009 at 7:02 pm

    It’s a catch 22 situation for the first time buyer – house prices have fallen but because they cannot get together the large deposit being demanded they cannot buy their own home!

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