This is a tax that is payable on the purchase of land in the UK. This is in addition to the offer to help home buyers pay the taxes charged by the councils in different areas on the transaction of the sale of a home.

Not to be outdone by Halifax, other lenders entered the competition with deals of their own in order to attract first time home buyers as customers. Abbey cut the loan rate for those who could even make a small amount of deposit on the mortgage. This lender, which has Spanish ownership, cut the mortgage rate to 6.89% from 7.09% for those who could place a deposit of 10% of the purchase price. In addition, they cut almost £2499 to £995.

Even this slight decrease in the interest rate will mean a savings of £46 per month on the mortgage payment on a home costing £150,000, which is the current price of the average home in the UK at the present time.

Co-op Bank, which is planning to merge with the Britannia Building Society, recently announced that first time home buyers applying for a mortgage can have a co-signer on the document by using the income of a family member or friend who is willing to guarantee the repayment of the loan.

It was actually HSBC who initiated this competition in the mortgage lending business. It shocked the lending world by slashing its interest rates for first time home buyers to the low rate of 4.99% if they could make a 10% deposit on the loan. Experts in the industry were not impressed by this move.

This was not what buyers need at the present time, according to David Hollingworth of London & Country brokers, who stated “What first-time buyers need is better choice and better rates on loans for those with just small deposits. Incentives are fine, but you have to work out what they are really worth.”

The amount of deposit that first time home buyers can afford is what will determine the rate of interest that lenders charge for mortgages. Those who do not have the 10% deposit are still subject to the higher rates of interest on the loan. Lenders are still apply a rigid set of criteria in approving mortgages because in these uncertain economic times having a stellar credit rating remains an all-important issue in being able to receive a mortgage.

The number of mortgage approvals in January, 2009 was only a little less than 9000, according to the figures released by the Council of Mortgage Lenders. When you compare this to the number of approvals when the housing boom was at its peak it is only about 25% of the total number of approvals for the same month. At that time, first time borrowers needed to make a deposit of just over £12,000 whereas today, they need to have an average of £30,000.

Good News from Lenders for First Time Home Buyers is a post from: Glitec