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Mortgages -
How to raise funds for that mortgage deposit
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Raising money for a mortgage is hard enough at the moment and with banks only lending to those with sufficient capital for a large deposit, the last thing anyone needs is paying hundreds of pounds to a landlord when trying to save.
The first thing to do would be to try and renegotiate your fee by checking letting agents' shop windows or searching online to establish if you are overpaying. If this is the case, and you can provide examples then you have a solid platform to negotiate cheaper rent.
Matt Pilkington, a caseworker at the housing charity shelter who specialises in advising clients who rent privately said: "What all landlords want is consistent, decent, quiet tenants. Remind your landlord how you fit the bill and highlight the advantages of keeping you. Tell him how much you can pay and take it from there."
Landlords lose a lot of money through void periods and although it isn't wise to tell him you want lower rates to help save for a mortgage, you should point out that if you renegotiate your rent at a lower rate you will be less tempted by the better deals out there.
If they won't budge, then other options to generate income include sub-letting, although you will need the landlord's co-operation for this and be prepared to take into account they he may want a cut of any arrangement made with a third party client.
Sometimes real sacrifices have to made if you want that mortgage and if your rental living expenses are really hindering your long-term mortgage prospects and you have no other obligations, then it may be best to move back home with relatives. It may seem an obvious choice but too many people hinder their long term independence by moving out at a time when they work within range of parents and workplace. Such a move will also remove your liability for council tax, although it is expected and good etiquette to make a contribution to the household.
Ludicrous as it sounds even squatting is muted as a potential option to those desperate to get a home. It is not illegal and although you may be arrested if the landlord obtains a court order, if you refuse to budge or forced entry is carried out. Shelter indeed offers advice people looking to squat via their Advisory Service for Squatters (Squatters.org.uk), with full legal advice, information or tips for finding a suitable building.
That is possibly rather extreme even for the most frugal of savers, but a shared ownership scheme might be a more realistic proposition. Shared ownership schemes allow you to gradually buy a percentage of a home, while a third party owns the other percentage. The government runs such a scheme to get more key workers and first time buyers onto the ladder, with a mortgage only obtained against the percentage that you want to own.
Such buyers are even exempt from stamp duty until they own 80% and it offers greater flexability towards expenditure. You can eventually own the property, but when you own it is down to when you want to pay a greater percentage towards ownership. Unfortunately as you only own a percentage you can only sell that percentage and the government will only let you sell it to someone who is deemed suitable under the key worker scheme.
So if you are struggling to get that mortgage and you do not fancy living with your parents or living in an abandoned residence waiting for the legal notices to rain in, a key worker scheme might just be a viable option to obtaining your own home with a cheap mortgage. Only problem is, you might have to become a teacher, nurse or police officer before you qualify. Still you never know your landlord may give in and drop his rates but if house prices fall he will hardly want to see his assets depleted further.
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