First Time Buyer Mortgage

Written by Jeremy Horelick
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A first time buyer mortgage is specifically suited to young people and families just starting out in life. That doesn't mean that lenders discriminate against older buyers, but rather that the terms of a first mortgage tend to be tailored to those who can assume long-term debt. But is it really worth taking the plunge, knowing full well that you could still be making payments in 25 years?

Look at it this way--what do you truly gain by renting? Sure, there's the freedom to move about as you see fit, as well as the detachment from day-to-day ownership worries. While such freedom can be appealing to university students and young adults, more mature buyers would likely welcome the permanence that comes with ownership. This is especially true when you consider the difficulty of paying rent when your pension is your primary (or only) revenue source.

What a First Time Buyer Mortgage Can Offer

The goal of a first time buyer mortgage is to entice young buyers to enter the market, even if it means assuming a huge burden, which it usually does. You can mitigate this burden by placing more money into your deposit, thereby lowering your monthly cost. Most people, however, do not have hordes of cash lying around, which is why the first time buyer mortgage is so inviting.

In exchange for the higher interest rates you pay, as well as the MIG, stamp duty, and solicitors' fees, you lay claim to your very own property. As more first time buyers enter the real estate market, more money flows into the local economy, neighborhoods improve (as a consequence of that cash infusion), property values increase, and everybody benefits. Once you have a foothold in the real estate market, it's much easier to justify additional expenditures since you have the assurance of a sound long-term investment that will one day pay dividends.

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