First Time Buyer Mortgages
By: Francis Ghiloni

There has been a lot of talk recently about the difficulty that those seeking to buy a property for the first time are having doing so. This reflects continued growth in house prices which has outstripped growth in incomes.

Lenders have been doing their bit to help – there are now (1 October 2007) 160 mortgages available where the lender will lend 100% of the property value compared to 92 in April of this year. However, care should be taken in choosing a 100% mortgage. Some lenders allow you to add any initial fees to the mortgage amount. Whilst this may appeal at the time because you do not have to find a few hundred or a few thousand pounds, obviously you are increasing the amount of your mortgage to more than its current valuation. At a time when many people are predicting that in the foreseeable future house prices will not rise at the rates that they have in recent years having a mortgage amount greater than your property value may be a risk you should think seriously about.

Today there is a tracker mortgage available for a major high-street lender where the fees on a £150,000 mortgage are £4,954. Adding these fees to the loan would result in a mortgage equal to 103% of the property value. That means that you start off with a minimum of 3% that you have to make up. And consider what would happen if house values fell. Consider also what would happen if interest rates rose by 0.25% or 0.5% - would you still be able to meet your mortgage payments?

The best way to check this out is to use a mortgage comparison site that compares the whole of the market; one that is independent of all lenders; one that looks at the true cost of the mortgage over the term of the deal that you want.

Francis Ghiloni www.mform.co.uk

Article Source: http://www.ArticleJoe.com

Francis Ghiloni works as the Marketing Director at mform.co.uk. mform.co.uk allows you to www.mform.co.uk“>compare mortgages and www.mform.co.uk/mform/mform?contentKey=mortgageinformation/buyertypes/ReMortgaging.xml“>remortgages from every lender in the UK. mform is independent, free to use and enables you to apply for a mortgage from the whole UK market.

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