1st Time Buyers

1st time buyers are in one of the most precarious positions when trying to purchase their first property. Banks and building societies are asking for high deposit to minimise their risk following the banking collapse.

One of the best options for 1st time buyers is the equity share option being provided by housing associations and house builders. The other party will usually take up to 40% equity share in your house which they would get back within 10 years or when you sell the house. In 10 years you should have repaid a percentage of your mortgage and will be better placed financially to remortgage to include the extra cost.

Benefits

- It can be an excellent first step on the housing market
- You can own your property instead of renting continuously
- Because your property is being backed by another party (i.e. house builders will pay a percentage up front) then the banks are more satisfied to lend and your mortgage would be lower.

Negatives

- The properties may be overpriced to start with (mainly because they are newly built). This can mean the home owner is left with a property which is expensive and difficult to sell in the future.