New Loans May Not Help First Time Buyers

Fri, 09 Jul 2010

An industry expert has claimed that the difficulty experienced by first time buyers in obtaining mortgages is unlikely to wane despite the re-emergence of higher loan to value loans . Ray Boulger, senior technical manager at John Charcol, suggests that most lenders will continue to exhibit a reluctance to lend to most first time buyers, given that this group of borrowers are among the least likely to have a big deposit or a history of responsible borrowing.

Boulger also points out that banks are more likely to reject applications for 90 per cent loan to value mortgages than for the 75 per cent equivalents given the greater risk of lending a higher portion of the equity. The market consultant also notes that the absence of a borrowing history leaves lenders without any means of verifying that the borrower can be trusted to meet repayments. Boulger recommends joint ownership as a potential means of instilling greater confidence in the lender.

Boulger’s comments are supported by recent figures from the Council of Mortgage Lenders, which revealed that first time buyers account for the lowest proportion of house purchase loans since September 2007.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

 

 

Income Protection Insurance
Get an instant quote with the award winning company

Paying Too Much?

7 out of 10 people are paying too much for their mortgage. To find out if you're one of them click here or fill out a FREE no obligation enquiry form