Are you financially prepared for a rate rise over the next two years?

Are you financially prepared for a rate rise over the next two years?

Many first time buyers engage the involvement of family members when it comes to purchasing their first property.   Either parents look to act as Guarantors to the mortgage, so giving the lender additional financial security.  Or it could be that they are ‘gifting’ the deposit towards the new purchase.

Gifted deposits can come from immediate family members, this can include step family, aunts and uncles and is acceptable for first time and subsequent buyers.  The money must be a transparent gift that has originated in the EU and can be easily traced back to the originating source.   A letter from the family member will usually be required and needs to advise the gift amount, relationship the person gifting the monies is to the applicant, confirmation that it is a gift and not a loan and therefore is not repayable, confirmation that they do not currently own the property being sold and that they will not live in the property or have any interest in the property post completion.

The average first time buyer purchase price climbed 16% over the last year, hitting a record high of £155,832, according to the latest First Time Buyer Tracker from LSL Property Services.  The average first time buyer deposit has also increased to £27,519.

Nationwide’s House Price Index has reported that UK House prices increased by 0.6% in February and were 9.4% higher than February 2013.  The average house price now sits at £177,846 across the UKand £345,186 in London.

Legal & General have found that two thirds of consumers are not financially preparing for a rate rise over the next two years.  Their Mortgage Mood quarterly survey highlighted that many borrowers are missing an opportunity to secure a long term low rate now, rather than regret later.

Finally, AToM was delighted to be recognised in the latest Mortgage Strategy Awards.  At an event deemed ‘The Mortgage Oscars’, held at the Grosvenor Hotel on Londons Park Lane and attended by over a 1,000 guests, AToM were placed second in the ‘Best Specialist Mortgage Distributor’ category.  Thank you to all who voted for us and well done Team AToM!