Embarking on your journey up the property ladder can be a daunting and difficult prospect. But it’s not as daunting as actually getting your foot on the ladder.
The average age of First-Time-Buyers in the UK is now said to be the early thirties. This is because of a lack of affordable properties and stringent post-credit crunch criteria laid down by lenders.
First-time-buyers should prepare to pay a 5% deposit
For the most part, a lender will require a minimum deposit of 5 %. There are mortgages available at 100% that require a guarantor such as a parent or family member, but it is prudent to expect to have to place a 5% deposit.
The truth is that the bigger the deposit is, the better. This will mean that your repayments have the potential to be less, freeing up your disposable income on a monthly basis. It also means that the interest you pay on your loan will be lower because you are perceived as a lower risk.
How much is a 5% deposit for a First-Time-Buyer?
Well, that depends on the level of borrowing of course. However, a look at average statistics will provide an indication of what’s required. The average value of a house in the UK according to the Land Registry is just under £233,000. So, a 5% deposit on the average value of a house in the UK would be just over £11,500.
Of course, these figures will depend entirely on where you’re looking to buy within the UK. Those buying in London can expect to pay more than the North of England or Wales, for example.
Is it better to have more than 5% deposit when buying a house?
Yes. If you are able to save, take advantage of Help-to-Buy ISAs, live with your parents or get help from the Bank of Mum and Dad. The more you can save, the increased amount of mortgage deals will become available to you. This could enable you to choose the length of your mortgage deal (possibly with a shorter-term), and even allow you to choose between lenders.
In every instance, we’d suggest that you talk to a whole-of-market mortgage broker like Mortgage Search Go who will find a mortgage tailored to your individual situation. Call us on 0844 69 333 60 today!