Who cares about first time buyers - why you must care and what to do about it!
According to a statement from Motley Fool [1] First Time buyers are once again being left unaided when trying to get on to the property ladder. With Lenders trying to protect themselves from what many consider ‘uncertain times’ financially, the recent Bank of England base rate cut is only benefiting the lenders. Motley Fool reported:
‘This week, Nationwide became yet another lender to tighten the screws on its customers, after telling new borrowers that, unless they have a deposit of at least 25%, they will face higher mortgage rates.
Until last Friday, those with a deposit of 10% qualified for the best deals. But now, the bank which prides itself on offering competitive rates to all its customers, and not just to ‘brand new customers only’ has dealt a blow to many new borrowers. It has announced that rates will rise by 0.2% on mortgages between 75% and 95% of the value of a home.
The changes will virtually wipe out the impact of this month’s earlier base rate cut. It means that someone taking out a new deal with Nationwide will now have to stump up a mighty £50,000 deposit if they want the best deal on a £200,000 mortgage.’
Given that most mortgages in London are more like £250-300K+ this means first time buyers will have to stump up over £60K in order to qualify for the best rates available.
Quite frankly, how many people do you know under the age of 40 with £60K+ sitting in their bank account? I guess it’s just Lottery Winners and a few lucky others that will benefit from the recent rate cut!
References:
[1]www.fool.co.uk
