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First time buyers are being warned that the financial crisis will not result in cheaper mortgages. Despite the housing market taking a dive and placing the power with the buyer rather than the seller, those looking to climb the housing ladder will find it increasingly hard.
Banks and financial companies are now more interested in sizable deposits and equity then interest rates when deciding to offer an individual a loan or mortgage agreement. This kind of old style lending has been spurred on by the onslaught of the credit crunch. It is estimated that a buyer would need approximately 10% of the total cost of the house in order to secure a loan or mortgage. This means that for a first time home valued at £150,000 the buyer would need around £15,000 to secure their purchase.
This means that a great many will be priced out of owning their dream house until they can save enough for this kind of deposit. It is good news however, for those who have the means to offer a good-sized down payment. With the market in its current state an individual should be able to snap up a bargain.
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