Buyers may find it harder to obtain a mortgage for a new home

Brits looking to obtain a mortgage in order to purchase a new home may find it difficult to do so.

That is because the majority of lenders tend to offer low loan-value mortgages on new properties, meaning that prospective buyers will have to find more of their own money to purchase the home.

Vernon Pethard, managing director at newhomesforsale.co.uk, which is a specialist website dedicated to new-build homes, stated that prices are being restricted in the sector due to fragile confidence.

He said: "Lenders generally discriminate against new-build homes, by unjustifiably offering lower loan-value mortgages on brand new properties compared to re-sales, making it harder for many prospective buyers to purchase a new home, which holds back demand.

"This is despite the fact that new homes do not always command a premium in price, are generally far more energy efficient and cheaper to run than older homes."

Anyone looking for a mortgage, whether it is for a newly built property or an older home, may want to use a price comparison site to find a good deal.

For example, MoneyExpert.com lists the benefits and disadvantages of both fixed rate and variable mortgages, which may help people choose between them.

It will also give details of mortgage providers and their interest rates, plus any benefits that are on offer.

First-time buyers may find it easier to purchase newly built properties under a new government scheme announced in the Budget.

Chancellor George Osborne announced on March 23rd that first-time buyers earning less than £60,000 a year will only have to find five per cent of the deposit for the new house themselves.

The other 20 per cent will be borrowed from the government and the home-builder respectively.

People who take advantage of the scheme will have to repay the money in the form of a loan but no interest will be charged for the first five years.
 

Leave a Reply

Your email address will not be published. Required fields are marked *