As new home buyers try to take advantage of lower property values, they are finding it difficult to find a first time buyer mortgage. Although this is a buyer’s market right now, banks are simply too skittish thanks to the housing crisis. Many banks prefer not to take the risk of offering a first time buyer mortgage, while others have changed the LTV ratio to the point that home buyers are finding that they don’t have enough money for a down payment.In the past, it was common to get a 125% first time buyer mortgage but this has changed dramatically. As property values fell, many of these loans went into default as homeowners found that they owed more than the home was worth. Now, it is much more common to see a 75% to 85% first time buyer mortgage. For high ticket properties, this means that buyers will need to have a sizeable down payment, which can be difficult for first time buyers to achieve. The market should change however as soon as the housing crisis stabilizes and experts predict that first time buyer mortgages will soon be available again.
Related reading: First Time Buyer Mortgage
Comment on this article