One foot on the ladder to Home Ownership – Dec 2011

Getting a foot on the ladder to home ownership tends to need a decent sized deposit these days as a lot of lenders are still looking for you to have around 25% deposit to put down before they will consider offering a mortgage.

Some people seem to have been saving hard over the last few years while the housing market has been uncertain but quite often getting enough deposit together can involve help with contribution from a family member.

Bear in mind with deposits that your solicitor will need evidence and full details of your source of funds and your lender needs to consent to there being a third party contribution.

You also need to think in advance about whether this money is an outright gift or whether it is a loan or needs to be repaid and it is advisable to discuss this at an early stage with your solicitor so you can consider carefully what is right for you.

Sometimes a lender will refuse to consent to a third party putting money in unless the money is an outright gift. Other times, the money can be protected as a legal charge ranking second behind the lender. Another option might be to consider having a declaration of trust drawn up to record the agreement.

It is always worth discussing options with your solicitor so you have plenty of time to work out what suits your circumstances.

Currently, qualifying first time buyers are eligible for nil stamp duty land tax on purchases up to £250,000.00 but people will need to act quick in the new year to benefit – the first time buyer stamp duty land tax incentive is due to expire 24th March 2012.