First Time Buyer

Being a First Time Buyer (FTB) is no easy feat in modern times. This is because house price inflation has risen at a far greater rate than First Time Buyer earnings, which can make is almost impossible for a First Time Buyer to qualify for a mortgage in order to buy the home in the first place.

But, these days, at least a First Time Buyer can receive a leg up onto the housing ladder through various schemes. For example, the government offers First Time Buyers the chance to buy a percentage of a home rather than the whole thing under a shared ownership scheme. The chunk that the First Time Buyer cannot afford is bought by a local housing association. Once moved in, the First Tine Buyer can 'buy back' chunks of the remainder of the property as and when they can afford to - a process known as 'stair casing.'

A struggling First Time Buyer could also look at shared equity schemes where the part they can't afford is bought jointly by the government and lender participating in the scheme. Although the First Time Buyer will never own 100% of the property, they will pay not interest or rent on the part of the home that is not theirs and with any luck, the house price will increase. This means when they are not longer a First Time Buyer, as they are looking to purchase their second home, they may have enough capital to put down on a home that belongs entirely to them.

Other means of house purchase that a struggling First Time Buyer could look at are 100 %and beyond mortgages, deals for professionals that boost borrowing capacity and guarantor schemes where a parent guarantors any shortfall between earnings and the amount the First Time Buyer needs to borrow.

See Also:

• Mortgage Centre
• Mortgage Calculators
• Buying Your Home

Last Updated: November 2007 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.