One foot on the ladder to Home Ownership – Feb 2011

One foot on the ladder to Home Ownership – Feb 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 looking for you to have around 20 – 30% deposit to put down before they
will consider offering you a mortgage at the moment.

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 at an early stage so you have plenty of time to work out what is
right for you.

As a point of note, the first time buyer
stamp duty land tax incentive is due to expire next year. Currently, first time
buyers are eligible for nil stamp duty on purchases up to £250,000.00.