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Mixed News for Consumers Looking for First Time Buyer Mortgages? A Dizzying Look at 2009 So Far.

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January this year, and the news was all good for first time buyer mortgages, speculating that first time buyers were in for a brighter future during 2009, according to a review by Halifax.

Then, we were told that with house prices dropping and the difference between prices and salaries improving, that first time buyers were starting to gain a more favourable position on the home market.

Moving along to June, and it was a different story. According to more current research there was then a slump reaching 97% as first time buyers were not able to fork out larger deposits for their mortgages, and were paying the price. First time buyer mortgage rates also increased to an average high of 6.23%. In turn increasing the difficulty and strain on consumers.

Ray Boulger, of John Charcol, said, 'The cost to the lender of making one 90% LTV loan available can be four or five times the cost of offering a mortgage at 60% LTV. We're in a situation where the more lending a lender does at 90% the less lending they are able to do overall.'

David Hollingworth, of London & Country added on the issue saying, 'A secondary problem to the lack of mortgages available at 90% is that these deals are extremely hard to qualify for. Lenders are looking for people who can pass their credit score with flying colours.' One statistic showed that first time buyers were at a two-in-three chance of having their loan rejected.

It was also said by Ray Boulger, the news that 75% and higher LTV mortgages being found by first time buyers, came as a surprise, and was 'one of the best indicators of confidence we've got at the moment.'

News now of September, with more incentive for first time buyers to take the plunge with Alliance and Leicester having announced an LTV mortgage available exclusively to first-time buyers at 85%.

But an emerging trend, most likely to affect first time buyers with small deposits, is the fall in available number of mortgages by 17% since January.

Time will tell what is to happen for the near future of first time buyer mortgages. But with the roller-coaster ride we've already had this year, who can blame us for feeling a little dizzy?

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