Use the right, which makes it possible to buy a house without any savings. But do not make a mistake, otherwise you will pay twice.
The purchase of the first property is not an easy task. The lack of real estate in the UK affects the prices, which continue to grow. According to the latest data, prices have increased by an average of 2.7% over the past 12 months, which means that the average cost is almost £228 thousand.
As the cost of living increases, and the incomes of the British remain practically unchanged, it becomes more difficult to receive a deposit. A study conducted by Nationwide earlier this year showed that buyers are forced to save money for eight years to receive a deposit.
Not surprisingly, young people see the purchase of their own housing as an unrealizable dream.
Mortgage for those who buy property for the first time.
Post Office launched two mortgage loans, which, they said, are specifically designed to help thousands of British people buy their first property.
The first mortgage is called Family Link. The person who first buys real estate can take 100% of the value of a house or apartment by dividing a mortgage into two properties - 90% of the mortgage to be purchased and 10% of the loan to the parent's house.
Both loans must be paid by the buyer, with 90% of the mortgage paid at a reduced rate of 4.89% and calculated for five years with a cashback of £500. The remaining 10% is an interest-free loan, which must be repaid within five years.
Another option - the mortgage First Start, in which the income of one of the family members can be included in the payment of the buyer. Thus, the parent becomes a co-borrower, is responsible for the overall loan and makes monthly payments. At will, the parent can become a co-owner of the acquired property.
This type of mortgage is suitable for those who do not have large incomes and the chances of obtaining a mortgage are low. Due to First Start, the borrower's income is added to the income of his relative, which allows him to get a larger loan.
Is there a risk?
These types of mortgages have some drawbacks.
With a mortgage loan Family Link, if the main borrower lags behind his repayments, then he not only can lose the acquired property, but also puts at risk his parents' accommodation.
As for the First Start mortgage, for many buyers using it, there will be much more tax costs due to an additional 3% Stamp Duty. For example, for a house worth £ 200,000 it will be necessary to pay £ 7,500 of the Stamp Duty tax instead of £ 1,500 if you buy it alone.