First time buyers get some good news
Earlier this month struggling first time buyers in the UK received some good news after Abbey, which is owned by Spanish bank Santander, accounted that it was scrapping the legal fees on some of its mortgage loans.
The news comes just as many first time buyers may have given up hope given that more and more 10 percent deposit deals are disappearing from the market and house prices have been rising over recent months. The scrapping of legal fees on these mortgages will give first time buyers a little more leeway when it comes to affordability.
However, there is a snag. The new Homebuyer Plus mortgages from Abbey vary in terms of interest rate depending on how much deposit the borrower is able to put down, and in order to qualify buyers will need a deposit of at least 20 percent of the property value, which for many could prove to be a big problem.
For those that are able to raise this deposit there is the opportunity to get a mortgage that does not charge for legal fees or for valuations.
Industry officials have said that first time buyers that do qualify for these mortgages stand to save up to £1000 on the cost of buying a home.
One official said: “These mortgages should save first-time buyers typically around £800 to £1,000. Legal work costs about £500 while the valuation depends on the price of the property, but is around £295 for a property worth £200,000.”
Whilst many first time buyers have been struggling to get onto the property ladder and afford a mortgage some officials have said that they are now better off than they were a couple of years ago.
This has been put down to the fact that property prices are now far lower than they were at their peak and stamp duty has been suspended on properties up to £175,000, whereas the previous threshold was just £125,000.
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