by Mark Johnston
Mortgage Rates Fall Below 4 Per Cent for First Time Buyers.
If the mortgage market is to see a bumper 2013 then first time buyers are crucial and therefore lenders need to recognise that they have a crucial role to play.
It seems then that for the first time since before the financial crisis many lenders are now offering first time buyers mortgage rates at below 4 per cent.
The cuts in mortgage rates have come as the governments funding for lending has now finally begun to filter down the mortgage market.
Paul Smee, director general at the Council of Mortgage Lenders (CML), suggested “first time buyers, in particular, have benefited from the effects of better funding conditions , with the number of new people moving into home ownership reaching its highest level for five years”.
Recent data has shown that in the last three months of last year one in forty first time buyers took out a 95 per cent loan to value (LTV) mortgage compared to less than one in a hundred just a year earlier. Also around one in five first time buyers borrowed at 90 per cent loan to value (LTV) or more within the same time frame.
Mortgage experts have stated that first time buyers who have a minimum 5 per cent deposit now have more options than they did last year.
Ashley Brown, director at independent mortgage broker Moneysprite, stated “rates are starting to get more competitive at higher loan to values and this coupled with a more sensible approach to underwriting, is the key to breaking the deadlock in the market”.
The returning confidence in the property market has been spurred on by various factors which include falling mortgage rates, wider availability of products and not forgetting enhanced lender confidence.
Current research appears to show that competition is again hotting up among mortgage lenders as yet another has launched a 2 year fixed rate deal for those borrowers with just a 10 per cent deposit, at a rate under 4 per cent.
Marsden building society has recently slashed its borrowing rate for those with a 10 per cent deposit, their particular deal offers a rate of 3.99 per cent for a two year fixed rate deal with a fee of £1,098.
However, Yorkshire building society launched a two year fixed rate mortgage in January this year with a rate of 3.79 per cent and a low fee of just £995.
Topping the 90 per cent loan to value (LTV) best rates table currently is Chelsea building society who offer a 2 year fixed rate mortgage deal at 3.69 per cent or 3.94 per cent depending on whether borrowers want to pay a £1,825 or £1,025 fee.
In conclusion the appetite to lend appears to have returned to the market and therefore many potential borrowers who a year ago may have all but given up hope of getting a mortgage will now find that not only can they obtain a mortgage, but they can do so at a good rate as well.
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