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Want to get on the property ladder and don’t fancy sharing with your folks? Here’s some help…

The number of younger first-time buyers is dropping, while the amount of deposit they need to buy a home is rising, according to the Office for National Statistics.

Added to which, the number of homes where two or more generations are living under the same roof are apparently soaring.

But if you don’t fancy moving in with your parents and grandparents, there are schemes that can help if you’re looking to buy a house. First though, mortgage basics:

1. What is a mortgage?

A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer.

The loan is ‘secured’ against the value of your home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it so they get their money back.

When buying a property, you will also need to pay a deposit. This is a chunk of money that goes towards the cost of the property you’re buying. Generally, you need to try to save at least 5% to 20% of the cost of the home you would like, so if you want to buy a home costing £150,000, you’ll need to save at least £7,500.

The bigger deposit you have, the lower your loan interest rate could be.

2. What schemes are available to help me buy?

There are a number of government schemes which could help you.

One of the better known is the Help to Buy scheme for those who have a small deposit. If you have at least a 5% deposit, you could use the Help to Buy scheme through equity loans, which are available if you are buying a newly built home; or mortgage guarantees, in which the government undertakes to cover any of your mortgage lender’s losses as a result of any problems you may have in paying it back.

Both these schemes are for homes costing up to £600,000 in England, £250,000 in Scotland and £300,000 in Wales. Northern Ireland has a different equity sharing scheme called co-ownership.

Other schemes include Right to Buy, which allows tenants in England, Wales, Northern Ireland and Scotland who rent their home from their local council or housing association to buy their home at a discount; and shared ownership schemes where you buy a proportion of the home from the landlord.

3. How much can I afford to borrow?

Before applying for a mortgage you’ll need to think about more than just whether you can afford the monthly repayments.

Mortgage providers will be looking at your income and outgoings to see if you can keep up with repayments if interest rates rise or your circumstances change. See how lenders assess what you can afford

Are you looking to buy a house, or have you already bought? What help did you have, if any, to get on the property ladder?

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  • yvonne / 16 February 2016

    Lets Come Down to 1995 Prices, then We could Probably Pay Cash OUTRIGHT again

  • Processor / 12 February 2016

    The property market is pumped very high by international buyers. The morgage is very cheap. (interest rate) The question is ? how long? When you buy now you can expect interest rate rise in 2- 3 years or even quicker. Educate yourself, do not trust main stream media. Property rise stimulated on cheap loans and central bank decision will overheat the prices. Economy build on consumers debt will not work in long term.

  • John Goulty / 5 May 2015

    Save hard, cut out all unnecessary personal spending then look for a property with more than one bedroom. Rent the other room/s to help with the mortgage costs. Buy a property in a cheaper area than you would prefer, something run down that you have to work on to add value. Learn the skills and trades you need to to do the work yourselves to save a lot of money. Buy building materials from salvage yards/second hand. Work hard, look for opportunities, sell the property on when the time feels right, buy another, do it again and so on. Then you're on the property ladder. There is no easy way to do this (unless it's been handed to you on a plate). Never borrow money on credit cards/payday loans and don't buy things you don't need unless you can pay for them without borrowing. Rough it for some years and it may well work out for you.
    Avoid high street banks and talk directly to mortgage brokers. Finally, in my view, there is no substitution for hard work.

  • James / 4 April 2015

    I have my own business I own my vehicle I have saved 25 grand to put down on house , my company has been going 4 years but last year my business partner had a knee op so we earned a little less than usual tried to get mortgage for 70 grand. But because I haven't girlfriend or loads of debt and have paid for things up front my credit score is low?? I have never took of the state earned my way but it seems in this country the harder you work the more you are condemned., but I'm staying positive saving still ill buy house even if it's cash. I wouldn't mind if our tax money was helping pensioners and people in real need but instead it goes too illegal wars and people who use children as money coupons to benefits,the government are so blind 😯

  • Danielle / 30 March 2015

    You may want to do a bit more research on this one to actually answer the question. Your audience will already know all of the information you have provided.

    And my direct answer to the question (from experience) would be 'don't live within a commutable distance on London'. Unless you have a very good wage you're not going to have much spare cash after rent and transport costs.

  • margaret Clark / 25 March 2015

    Useless pathetic article! Tells you nothing!
    Q." What is a mortgage?"
    A.Look it up on google,stupid! Doesn't give any help to youngsters at all- they need 5% deposit for these schemes and even if they have saved that( like my daughter has, through years of saving hard).they still can't afford to buy.!! What with the other costs like gas, electric, insurance, council tax, food, transport and repaying the original loan,they can't afford to live in the place they are buying. Chances are , they are very low paid anyway, ( because it seems acceptable for so many millions of workers to be on minimum wages due to this scum labour government policy ), these people will NEVER have the chance to buy their own place. Tragic.

  • gk / 21 March 2015

    Everything here is good advice. I brought my first house in 1990 - prices had peaked! Interest rates were 7% and rising to 15% . The price was 75k my deposit was £15k. I was 27 years old.
    Today to do the equivalent you need 50k deposit for a £250k house. Good Luck.

  • Ryan balmer / 21 March 2015

    I feel like buying a house now

  • Alison / 6 March 2015

    While housing prices are as high as they are, it is a real struggle to afford your own home when you're paying rent, whatever your class and upbringing. I agree with Christine-this article feels like a let-down. I already knew what a mortgage is and had some idea of what kind of deposit to put down and how big. I also knew of the right to buy (only of use to those in council tenancy properties) and the housing association part ownership schemes. Anyone looking to buy a house would have already been able to look this kind of thing up on the internet. What I would have liked to know about are savings methods that would help you get the deposit together, which banks offer good mortgage deals to first time buyers, and what to watch out for in the small print. It is well known that commercial rent is often higher than a mortgage would be on a monthly basis, so a lot of people could probably save money by owning their own home.

  • Dene Mitchell / 4 March 2015

    This great new I still cant adored a house it's call national minimum wage when it should be called the slave wage or povity wage. I only earn 6 and a half grand a year, with paying rent to my parents I can't save anything let alone 5% for a deposit. Once again help for the middle classes and the rich but no help for th epeople that need it. What a waist of time

  • Lisa / 3 March 2015

    How are people (young or not) meant to save ridiculous deposits in the first place if they are paying rent etc. Rubbish article not well thought out at all & doesn't address the question in the title at all.

  • alfie / 3 March 2015

    no to shabby

  • Christine / 20 February 2015

    Well have to say the title got me intrigued but what a let down! Didn't mention the only way hotel services provided by mum and dad could be avoided was if Bank of mum and dad funded the deposit! This is a tax payer funded advice service. Really if that's they best they can come up with it's time they were scrapped and saved us all some money!

  • k bhat / 18 February 2015

    Thank you very much for this advice.
    I am retired and was toying an idea for buy to let under sixty thousand pounds property.

  • Joe / 18 February 2015

    Well, at least five minutes of research went in to this article.

  • Lisa / 15 February 2015

    Is this what passes for advice these days?!

  • Natasha / 14 February 2015

    How does this answer the question posed in the title? Weak, weak article. Should have been entitled: How to patronise twenty-somethings.

  • Salman / 7 February 2015

    Extremely useful information. Thanks for sharing.