Corry’s Molly and Tyrone aren’t just unlucky in love these days. Having been forced to take sex tips from Jack and Vera last year to spice up their love life, they’re now struggling to leave no.9 and find a place of their own.
It’s a situation familiar to thousands all over the country. The young couple just can’t find somewhere to build their own love nest – and it’s not just Jack’s bad back and Vera’s dickey foot that’s stopping them.
Thousands of young couples all over the country are struggling to get the cash together to buy a home for the first time. And if you’re anything like Molly or Tyrone and you’re stuck sharing a property or living with your parents, it won’t be long before things become very frustrating indeed.
With Tyrone not making a packet as a mechanic and Molly scraping by on a dog trainer’s salary, they’ll be lucky to clear £35,000 on a joint salary. The couple might be able to borrow four or five times that amount – £175,000, but they’ll need a deposit of at least 5% – nearly £9,000. And unless they can show they’ve got the burger van debacle out of their system, banks might not be keen to lend them much more.
If you’re like Molly and Tyrone and are struggling to buy a home for the first time, MoneyExpert looks at what options are open to you:
1. 100% mortgage
A 100% mortgage is the way to go if you can’t scrape together a deposit, making them ideal if you’re a first-time buyer. The amount you’ll be able to borrow will vary from provider to provider, and it’s worth noting that if you borrow over 90% of the value of a house, you may be charged a Higher Lending Charge (HLC).
2. Interest-only mortgage
Molly and Tyrone could keep their monthly costs down initially by opting for an interest-only loan. On a £100,000 mortgage at 5 per cent over 25 years the interest-only monthly payment is £416.66 compared with £591.27 on a repayment basis. That’s a saving of £176 a month. But with interest-only you’re not paying off your debt and at the end of the 25 years you’ll still owe £100,000. So it should only be a temporary measure.
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3. Get your debts in order
If you can’t save for a deposit it’s probably because you’re struggling to make ends meet from day to day as bills and everyday essentials eat into your pay packet. If you’ve got lots of debts, the best way to get them under control is to consolidate them into a loan and reduce your monthly outgoings. See below for the cheapest loans going:
|Provider||Typical APR (fixed)|
|Alliance and Leicester||6.4%|
APRs based on borrowing £7,500 over 3 years
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4. Start saving
Interest rates are still rising and that means cheap mortgage deals are disappearing. If you’re not yet on the property ladder, now is a good time to stop and think. The more rates rise, the more your finances will be stretched if you’re on a variable rate deal, so not having a mortgage isn’t necessarily a bad thing.
But as interest rates are high, saving money is a good idea – why not try setting aside a regular amount and setting yourself a target of a 5% deposit? By the time rates settle again, you could be ready to climb the property ladder…
|HSBC Online Saver||6.0%|
|Abbey E Saver||5.85%|
|Citibank Flexible Saver||5.83%|
All savings accounts quoted are instant access savings accounts – minimum £1 to open account
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Click through to MoneyExpert for more money saving hints and tips