Costs may fall on 100% mortgages
February 28, 2007 by admin
Filed under News, News-Mortgages
The fact that many first-time buyers are taking out 100 per cent mortgages may be a good thing.
Many commentators and industry experts have warned that the mortgages are dangerous as youngsters are being saddled with large amounts of debt.
However, Ray Boulger, a senior technical manager at John Charcol, says with more people getting them, we will soon start to see 100 per cent mortgages that are value for money.
“Despite the furore surrounding the availability of mortgages reaching as much as 125 or 130 per cent of a property’s value,” he said.
“In actual fact, very few people qualify for that amount of money and the average plus size loan to value is more like 103 per cent.
“The good news for borrowers here is that as competition increases, the premiums usually associated with these kinds of mortgages should be reduced,” added Mr Boulger.
The rise on popularity of 100 per cent mortgages is down to an increased number of people going to universities, according to Mr Boulger, with more people coming away with debt which prevents them from being able to save up for a deposit.
It is predicted by the technical manager that the cost of borrowing on a 100 per cent mortgage will “come down by the year end”.
