People looking to buy their first property are rushing to get advice as lenders start granting higher LTV contractor mortgages.
According to unbiased.co.uk, 40% of people seeking mortgage advice last month were first time buyers, the highest number for 14 months. A number of mortgage lending companies, offering loans to people with deposits as low as 5%, have returned to the market in recent months.
Last week, Grant Shapps, the housing minister, encouraged lenders to follow the example of Lloyds TSB and offer mortgages to buyers if they were guaranteed by parents or other family members.
He also proposed that potential first time buyers should be allowed to club together with their friends to raise a deposit for a ‘mates mortgage’.
Meanhwile, the government is running a joint scheme with house builders whereby first timers who only have a small deposit can get a loan to top up their equity. The loan would then be paid back when the buyer sold the new build home.
The chief executive of unbiased.co.uk, Karen Barrett, said confidence appears to be returning to the mortgage market. We are witnessing fast paced changes as mortgage lenders make products more available by reducing deposit requirements and offering attractive terms. First time buyers are looking to take advantage of this and more are now seeking mortgage advice.
She also said it was good to see that they do seek advice in order to get a comprehensive overview of the range of products that are available and help them select the best product for their financial situation.
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