More Tips to Get the Right Mortgage Deal

As we have promised, we are continuing with the tips for choosing the right mortgage plan. The 2 scenarios, which were left out yesterday are first-time buyers and larger loans. First-time Buyers Lenders are becoming more welcoming towards first-time buyers at the moment. For instance, last week Abbey offered its new 4-year fixed deal at 5.84%, which also involves a 15% deposit and a fee of £495. Cheaper deals are also available for first-time buyers given they can provide at least a 25% deposit, which now constitutes approximately £40,000 for an average house. Homebuyers who cannot provide any cash can apply for a governmental support scheme, one of which is HomeBuy Direct. The scheme combines a traditional bank/building society loan and a joint governmental loan, and allows buying a new-built property. Another support scheme available for first-time buyers is NewBuild HomeBuy, which allows buying a share of the property from housing associations. Large Loans Lenders have become tougher on borrowers, who require large loans, by pushing up the cost of such loans. Best-buy market deals are now available for sums that do not exceed £500,000 or sometimes even £250,000. For instance, The Cheltenham & Gloucester has regrouped its offers; now, best deals are available for loans of up to £499,000, which are being offered as a 2-year fixed deal with 60% LTV for 3.89%. If the buyer needs to borrow more than £500,000, the interest rate increases by 1% and constitutes 4.89%; deals over £1 million are priced even higher. One more option is turning to private banks such as HSBC Private Banking or Kleinwort Benson. They usually offer tracker deals at an average of 2% above base rate, but the borrower might be stuck with ERCs. Another disadvantage of private banks is their reluctance to provide mortgage financing for first-time clients unless they transfer a significant amount of investment to the bank.