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  • Writer's pictureThe Cedar Crest Team

SOLO FIRST-TIME BUYERS

Updated: Sep 20, 2021

Opening the door to owning your first home


“Buying a property is a big financial commitment and there are more costs to save for than you might imagine. As well as finding a deposit, you’ll need savings to pay for conveyancing, surveys, mortgage arrangement fees, moving costs and furnishings.”

FOR SOME PEOPLE, buying their first property can be a difficult and expensive journey whatever their circumstances, but for single people buying alone, it can seem almost impossible. If you dream of owning a home but don’t have help from family or someone to buy with, here are some of the options available.


 

COSTS OF BUYING A HOME ALONE


Buying a property is a big financial commitment and there are more costs to save for than you might imagine. As well as finding a deposit, you’ll need savings to pay for conveyancing, surveys, mortgage arrangement fees, moving costs and furnishings. If you are a first-time buyer you need to do your sums carefully to avoid any financial surprises. The average cost of buying a property will vary depending on where you live, but it will certainly run into thousands of pounds. There are a number of government schemes available to help you buy a home and the eligibility criteria has changed for some.


Which could you be eligible for in 2021?


 

GOVERNMENT SCHEMES


There are several government schemes designed to help you get on the property ladder. Your options include:


SHARED OWNERSHIP


This scheme allows you to buy a share in a property while renting the rest from a local authority. You may be able to increase your share over time, which is called ‘staircasing’. While your upfront costs, for example, your mortgage deposit, will be lower, your ongoing costs may be higher, as you’ll pay not only your mortgage but also rent, service charges and maintenance fees.


HELP TO BUY EQUITY LOAN

This scheme allows you to buy a property with just a 5% deposit, plus a 20% equity loan from the government (or 40% in London), which is interest-free for five years. You won’t need to repay the loan until the end of the term, or when you sell the property or finish repaying the mortgage.


HELP TO BUY MORTGAGE GUARANTEES


The latest scheme, thanks to new measures announced in the 2021 Budget, provides government guarantees on 95% loan-tovalue (LTV) mortgages for first-time buyers, making it easier to buy a property with just a 5% deposit.


APPLYING FOR MORTGAGES


Solo buyers may also find it more difficult to obtain mortgage approval, as they will need to meet the affordability criteria of the lender alone. But, while difficult, it is not impossible. For example, there are mortgages available that will take into consideration a friend or relative’s income as well as your own, even if they are not named on the deeds for the property. Or, if you buy a property with more than one bedroom, you may be able to find a mortgage from a lender who will consider the income of a lodger as well as yourself. Due to the government’s new scheme, there is now a higher availability of 95% LTV mortgages.


BEING FINANCIALLY SAVVY

For a first-time buyer, the prospect of getting on the property ladder can feel overwhelming and out of reach. So what should you consider to improve your chances of success?


Check your credit score Make sure your credit score is clean and pay down any debt and credit card borrowings as much as possible


Clean up your current account Your lender will carry out an affordability test based on your income and monthly outgoings. Go through your current account six months before you make a mortgage application and see for yourself where all your money is going.


Start building a deposit Aim to put down as much deposit as you can to avoid unmanageable mortgage repayments.


Professional mortgage advice Obtaining advice can make the difference between a successful mortgage application and being rejected. It may also lead to a significantly better value deal, potentially saving you thousands of pounds over the mortgage term.


 

>> LET US HELP GET YOU ON THE PROPERTY LADDER <<


Buying a property, especially for the first time on your own, can be a complex process and there are a number of costs that need to be considered in addition to the purchase of the property itself. With a range of government schemes that make home-buying more affordable, to discuss your requirements contact - UK +44 (0) 203 883 1017 Hong Kong +852 6017 4140 – email info@cedar-crest.co.uk.


Your home may be repossessed if you do not keep up repayments on your mortgage.

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