31 Jan

Financing a mortgage is a tricky situation

Financing a mortgage is a tricky situation

Getting a mortgage has been difficult for the past few years since the market in the UK crashed way back in 2007. While this saw house prices dive, it also saw banks and other lenders put up the shutters, refusing to give mortgages to many.

Even those who were still able to get an approval for their financial products after the time when the market ran into difficulties will have seen their deposit hit disproportionate levels.

Since the market experienced its crash, those heading to an estate agents to purchase a house will have had to stump up somewhere in the region of between 20 and 25 per cent of the cost of a house, a reality that saw the average deposit rocket in price to hit more than £65,000.

However, there have been some lights at the end of the proverbial housing tunnel that have made it easier to obtain a mortgage in recent times. The government's Funding for Lending scheme, for one, introduced in August last year, will have encouraged more banks and building societies to take more of a risk, handing more money down to those who need it.

With this in mind then, your focus in the housing market may have changed. Where renting may have previously been your only option, the increased lending power may see you turn back to the idea of buying a home, meaning that you need to come up with the finances to pay your deposit.

There are many different ways to do this, with the bank of mum and dad, an old favourite for many in need of that final boost, still being the first option that many will turn towards. The benefit this can have is that you will often get a loan with no interest, and less pressure to pay it back.

However, there can be issues with borrowing from family, and if there is a disagreement between loved ones over a loan, it can make for difficulties.

Other options you might look at could include sharing a property for the time being. If you are renting, it can be nice to have a space all to yourself in which to live. However, at the same time, it is expensive. For those who are saving up, moving in with a flat mate can be ideal.

Taking this option will allow you the chance to half the cost of living essentially. All gas, electricity and water bills will be halved, while rent is automatically sliced in two, giving you much more power to put money away for the future and your purchase.

Finally, you might consider getting a second job to pay for your mortgage deposit. This can seem like a drastic move, and for many it might be too stressful, but for those who are desperate to get their hands on their first piece of UK property, going down this route allows you the chance to purchase a home much sooner.ADNFCR-1222-ID-801532583-ADNFCR

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