Subscribe to The Money StopNews Feed

Browse > Home / News, News-Mortgages / First-timer buyers ’should listen to Bank’s warning’

First-timer buyers ’should listen to Bank’s warning’

February 16, 2008 by admin  
Filed under News, News-Mortgages

Leave a Comment

First-time buyers who have taken out interest-only mortgages should reduce their loans following the Bank of England’s (BoE’s) prediction of economic depression, one financial expert has claimed.

According to Fool.co.uk, those who have taken out interest-free mortgages to get a first foot on the property ladder could face bleak financial times ahead, as lenders tighten their financial belts.

David Kuo, head of personal finance with Fool.co.uk, said that the BoE’s Inflation report should set “alarms ringing” in the ears of first-time buyers.

“In future, lenders may tighten the credit-scoring criteria and choose to reduce the maximum loan to value (LTV),” he warned

Mr Kuo added that: “This will put borrowers who have taken out 90 per cent mortgages at risk, especially if the value of their homes decline sharply when they remortgage.”

Fool recommended that making overpayments as, according to its calculations, every £1,000 of those will reduce the loan by the same amount and reduced the interest bill by £1,500 over 25 years.

Meanwhile, according to the Royal Institute of Chartered Surveyors, house prices have reached their lowest point since the crash during the 1990s.

Tags: financial belts, lenders, Chartered, GBP, Business Finance, inflation

Tags:

Related Entries

  • Deposit levels could shoot up further for would be buyers
    • Until the end of 2007 the UK, along with many other nations, had enjoyed around a decade of easy credit, and for many the sudden financial restrictions that came into play with the onset of
  • Caution advised for first-time buyers looking overseas
    • As recent studies reveal more and more first-time buyers are looking to make their first steps on the property ladder overseas, it is important they are aware of the possible pitfalls.A report from UK National
  • First time buyers could benefit if banks were protected with insurance
    • For many first time buyers in the UK the dream of homeownership is one that has slipped from their grasp completely, with lenders either demanding huge deposits that first time buyers simply don't have or
  • Have things improved for first time buyers?
    • Over recent years things have gone from bad to worse for many non-homeowners that may have been hoping to get onto the property ladder. After years of soaring property prices many would be first time
  • Boost your chances of getting a mortgage as a first time buyer
    • As many people are already aware getting a mortgage can be difficult for anyone these days, with the banks exercising extreme caution over who they lend to and putting a range of restrictions in place
  • Just 96 mins to choose a house
    • Home buyers are being warned to take more time over choosing the home of their dreams.New research shows that many buyers spend just 96 minutes viewing a property before taking out a mortgage on it.This
  • Warning issues over bank fraud committed by phone
    • Consumers are being warned to be careful about calls that they receive claiming to be from someone at their bank, stating that this is a common way for fraudsters to get information from accountholders and
  • Rate rise will hurt homeowners
    • The fallout from yesterday's (May 10th) interest rate rise is being felt today, with many organisations warning that the increase could leave homeowners in the red.The Bank of England announced that the base rate would

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!