First time buyers offered huge mortgages

For the moment first-time buyers may feel they’re really lucky, as most are offered a mortgage which will enable them to buy their first home - at a rate that is NINE times their salaries.

Alot of banks and building socities now use what is called ‘affordability calcultors’, meaning that they tend to offer huge amounts to people, without always needing proof of income, as revealed by an independant mortage broker.

Affordability is based on what is left of a person’s disposable income after all other commitments.

But, with some self-employed people, they can use another type of mortgage known and ’self-certification’ so they can provide an estimate of their earnings for the coming year, stating the amount of their income.

This works for people who earn a basic salary that is boosted by commision, or by people who can’t say a set amount for their salary, as they have not been trading for long enough.

As house prices continue to sky-rocket, most home buyers could find themselves tied up with enormous monthly repayments for their ideal home. But as long as people are realistic about their earnings and what they can afford, investing in property is still a safe bet.

It has resulted in some cases where although some people can pay hundreds of pounds in terms of rent, yet can’t do the same when borrowing for a mortgage.

But the good news is that now banks are lending on a basis of affordability and so they are being more realistic.

It seems that due to the current high rise in property prices, siblings and friends are all chipping in to buy a propterty, and even strangers meeting up to do the same thing.

But it is important to know that homeowners could have their homes repossesed by the bank, even by a minor financial crisis caused by missing mortgage repayments.

Basicially know what you can afford and be sure to handle the situation carefully, as any small mistake can push homeowners over the edge and into debt and reposession.

Although a spokesperson for the Royal Bank of Scotland said when someone is offered a mortgage more than six times their salary, only tends to happen in very rare cases, a staggering 284 people sought help from specialist debt advisors last year alone.

2.5 percent of them had their homes reposessed, and 2.8 percent had a warrant issued for posession for their homes.

And the average debt per person in addition to the mortgage they have is 16,218.08, with the total amount of debt tipping a massive 4,605,933.33, as told by debt specialists.

If your home is in danger of being repossessed and you need help contact us. We can discuss your options with you in detail so that the repossession may be avoided. Repossession can be stopped upto the day of eviction and we will always let you know if we can help. Contact us to discuss the options available to you.

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