First Time Buyers Sour On Mortgage Deposits

Retired By Retired, 22nd Jun 2010 | Follow this author | RSS Feed
Posted in Wikinut>Money>Making Money

First time home buyers are finding property more and more available and affordable, but this new period of potential has not been without its hitches. While monthly repayments remain quite reasonable for most buyers, the initial deposit is another matter. Hovering at roughly 20% to 35% of the overall cost of purchase, for a typical $100,000 home this still translates to over $25,000 at minimum. which many folks still see as just too much.

First Time Buyers Sour On Mortgage Deposits

$25,000 is a lot of money, for anyone, and it just drifts further out of reach when rent is factored in. This private rent, oftentimes equaling the mortgage repayments themselves, has been just another gigantic hindrance, not to mention that lowering it, by getting into council property, is usually a prohibitively long procedure, given the enormous waiting lists for such things.

The recession HAS lowered housing prices; first time buyers on average will pay out around $133,700, but nonetheless, when the initial deposit is running you roughly $29,400, assistance becomes necessary in almost all cases. But whereas it used to be the case that parents would aid their kids in purchasing their first home, helping them complete that difficult step, today, the extra money just doesn't seem to be there, with those very same parents struggling with their own mortgage payments, and concern about their own future.

Regardless of lower overall prices, first time home purchases, the Council of Mortgage Lenders recently announced, are at their lowest point in 2 years. And the frustration of prospective buyers seems almost palpable; so close to nabbing that dream home, but stymied at every turn by those huge deposits, with no assistance, for that, in sight.

Sellers seem to be disappointed as well. Possessing what would undeniably, any other time, be considered a hot property, and knowing there are buyers out there for it, who love it and do want it, but who just can't get over the hump of that deposit. In addition, sellers looking to upgrade, who have found their own new location, and who need to sell very promptly, also are being boxed in; unable to sell, and thus unable to raise the equity for their potential new property.

So what to do? The search is on for viable alternatives in finding buyers. Sellers looking to sell and sell fast, have been turning to some extent to companies offering a simple fast cash sale. Using this avenue, the company assumes the property in just weeks, and furthermore, applying online for a fast sale of this type, and actually getting an answer in a day or two, has become easier and easier. And as a strategy to keep that home from sitting on the market for months and months, it's also becoming more and more common, although as with anything involving such important financial matters, sellers must weigh all the facts and examine every opportunity, before finally coming to a conclusion of what's best, and ultimately what will make the most money, for them, given their specific case.

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author avatar C. Michael Davis
23rd Jun 2010 (#)

The sad thing is that the mainstream media won't mention these facts. Another sad thing is that the present administration claims to be such heros in helping home owners. Banks haven't bought into the program because the way it is structured it is still to risky for bankers.

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