Trying to get your foot on the first rung of the property ladder can be harder now than ever before. Prices although lower now since the onset of the recession are still at extremely high levels, this coupled with the new lower loan to values or LTV's being offered by mortgage lenders makes obtaining your new home that extra bit harder.
The best way to get your first mortgage is to save up a substantial deposit, this is the amount of your own money you would need to put down together with the mortgage to secure the purchase of your property. On average most mortgage products available today have a LTV (loan to value) of 85%. In real terms this means that for a property with a current worth of 100,000.00 you would need to save a deposit of 15,000.00.
Before the onset of the credit crunch there were loan products or mortgages which enabled you to borrow more than the current value of your property, some by up to 120%, although these products may have been a mix of mortgage and secured loan.
We have in the last few weeks seen the emergence of 90% LTV (loan to value) products which is a sure sign that the housing and loan markets have started to stabilise.
This still cause a problem for people that have been saving hard for some time and are only a few thousand pounds away from that all important deposit value.
There is a solution; a Guarantor Loan could be used by the borrower to boost their deposit and give them the extra funds they need to make that important leap onto the property market.
Using Guarantor Loans as deposit loans can also work in the tenant market space, more often than not a tenant can find it difficult to pull together the necessary funds to put down a deposit but by virtue of the fact that these people may already have a guarantor the product could fit in quite nicely to their needs.