With house prices so unpredictable lenders are more reluctant to hand out money to people, afraid that if house prices drop it could put borrowers in difficulty if they defaulted and the home was detained and then the house or flat would be sold for a smaller amount that the value of the loan. The banks are also limited in the number of mortgages they are able to lend to people with a small deposit due to international regulations that gives lenders a hefty financial cushion if they lend with a small deposit.
The main attraction of the new scheme is that it offers over one hundred thousand potential new buyers the chance to buy newly built properties with the initial deposit at just 5% as opposed to the usual 20 per cent asked by lenders. There will also be a mortgage guarantee scheme which would protect lenders against their losses if the borrowers fail to repay the loans.
The scheme is good news for UK building firms as well who will be responsible for erecting new housing estates and providing the new houses for first time buyers to move in to.
This sort of mortgage would be virtually impossible to get without this new plan. Under the new scheme a 95% loan is possible because if the property falls below the 95% threshold then the lender can reclaim any losses incurred. The new scheme will move people in to these houses by offering deposits at a rate of only 5 per cent. So if a newly built flat was worth 100,000 then only a 5% deposit would be required.
The new scheme will move people in to these houses by offering deposits at a rate of only 5 per cent. So if a newly built flat was worth 100,000 then only a 5% deposit would be required. This sort of mortgage would be virtually impossible to get without this new plan. Under the new scheme a 95% loan is possible because if the property falls below the 95% threshold then the lender can reclaim any losses incurred.
The main attraction of the new scheme is that it offers over one hundred thousand potential new buyers the chance to buy newly built properties with the initial deposit at just 5% as opposed to the usual 20 per cent asked by lenders. There will also be a mortgage guarantee scheme which would protect lenders against their losses if the borrowers fail to repay the loans.
The scheme is good news for UK building firms as well who will be responsible for erecting new housing estates and providing the new houses for first time buyers to move in to.
This sort of mortgage would be virtually impossible to get without this new plan. Under the new scheme a 95% loan is possible because if the property falls below the 95% threshold then the lender can reclaim any losses incurred. The new scheme will move people in to these houses by offering deposits at a rate of only 5 per cent. So if a newly built flat was worth 100,000 then only a 5% deposit would be required.
The new scheme will move people in to these houses by offering deposits at a rate of only 5 per cent. So if a newly built flat was worth 100,000 then only a 5% deposit would be required. This sort of mortgage would be virtually impossible to get without this new plan. Under the new scheme a 95% loan is possible because if the property falls below the 95% threshold then the lender can reclaim any losses incurred.
About the Author:
Michael Fielding writes articles on behalf of Unit Plant Services. Unit Plant provide form work hire and scaffold hire for businesses or individuals who are looking to build structures or extensions to their homes.
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