Combined Mortgage And Personal Loan Option Flexible For First-Time Buyers

Wed, 22 Aug 2007

First time buyers in the UK should consider the option of combining a mortgage with a personal loan for its flexibility, a mortgage lender has revealed.

Alliance and Leicester has entered the combined loan market by allowing buyers to borrow up to 125 per cent loan-to-value (LTV) and found that three in four brokers believe that first-time buyers will be the main beneficiaries of a combined mortgage and personal loan deal .

A survey carried out by the bank, which interviewed 208 mortgage intermediaries, also found that 21 per cent of brokers believe the extra money available through a 100 per cent plus loan to value (LTV) mortgage can increase the value of a house as the cash can be spent on refurbishments and improvements.

Loans that offer 100 per cent plus LTV are a popular choice as can they allow first-time buyers to get into the property market without saving for a deposit .

Jeremy Claridge, head of specialist mortgages at Alliance and Leicester, commented: "When innovative products come onto the market, it’s important they actually fill a gap and help those who need it most."

"Rising interest rates and house prices has changed the cost of borrowing, with first time buyers needing a bigger helping hand to get onto the housing ladder," he explained.
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