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Mortgage squeeze

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Mortgage squeeze Empty Mortgage squeeze

Post by Mr007 on Sat Nov 12, 2011 5:43 am

Former schoolmates Neil Tippett, Andy Jones, and Sam Jones, decided to take the plunge when they bought a house together in Oxted, Surrey.
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Tips for joint ownership

* Draw up a contract in case of a change of circumstances
* Shop around for mortgages
* Keep paperwork in order and in everyone's name
* Consider a joint bank account for paying bills
* Draw up an inventory of non-shared items

Source: National Association of Estate Agents

Fifteen months later, the trio say they have no regrets, with washing up rather than their financial welfare leading to the only arguments.

"Just make sure you think through what is going to happen in the worst case scenario," says Mr Tippett, a 28-year-old software engineer.

"As long as you think through those situations, and find the correct information on how to go about it, I would highly recommend it."

All three were looking to "spread their wings" by moving out of their parents' homes. But the barriers facing them will be familiar to many young people looking to set up home in the past couple of years.

Firstly, there were few homes available for young professionals to rent in their area.

Then, after ruling out the rental option, they found mortgage providers were rationing loans for all but the most affluent and safe of potential buyers.

"Being self-employed meant that getting a mortgage was very difficult. Getting a first-time mortgage was even harder," says Andy Jones, a 28-year-old landscape gardener.

Then there was the deposit. In 2010, the average deposit, according to the Council of Mortgage Lenders (CML), was 23%. Just five years earlier, it had been 10%.

The most recent figures from the CML, for March 2011, show the average deposit in the UK was 21%.

In actual terms, this means that even now - with house prices continuing to fall - a typical deposit would be £33,809, based on the Land Registry's average house price in England and Wales.

No clear figures are compiled that give any official picture as to whether more potential buyers are tackling these issues by teaming up to buy a home.

However, anecdotal evidence suggests that - as when house prices were exploding - more and more friends are considering joint ownership as an affordable option.

seo perth
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