First Time Buyers Home Loans
Loan Options for First Time Buyers - 100% Mortages
There are some excellent first time home buyer loans on the market to take advantage of, if you’re looking to purchase your very first property. Mortgage companies compete heavily in the provision of first time home buyer loans, as it is hoped that customers will stay with the same mortgage company for life. It is therefore in the companies’ interests to offer you a competitive rate. All you have to do is compare the various options and choose the best one.
Of course, in reality it isn’t quite that simple. First of all, you may find that you cannot get approved by all the home loan providers out there, which will obviously give you less choice in terms of your final selection. This may be because of a poor credit history, or perhaps a lack of credit history if you are relatively young and/or have never really borrowed money via loans and credit cards before.
Even though you are buying for the first time and will therefore have built no equity in another property, very few lenders will be prepared to underwrite 100% of the price of your new home. In other words, they require you to pay a first payment on the purchase. This is one of the prime pit falls for first time home buyers and often results in them turning to mortgage companies who are prepared to lend more money, but at an inflated price in terms of interest rates and administration costs.
Because getting a large enough home owner loan to cover the cost of your new house or apartment can be difficult, so it is important to save a little before you apply. This will not only help you in your search for a lender, but it will also keep the amount you have to borrow down - saving you money in the long run.
If you do not have any money saved up, all is not lost. However you may find that the only companies prepared to offer you a 100% first time home loan are those that charge high rates of interest with strict ‘tie-in’ clauses that mean you cannot move to a more reasonably-priced lender once you have some equity built up. As a first time buyer, although you are an attractive customer in the long term, you do pose a certain amount of risk to the mortgage provider so the more you can prove yourself as a responsible borrower, the better.