100 per cent-plus mortgages safe
September 25, 2007 by admin
Filed under News, News-Mortgages
A predicted slow down in house prices should not dampen the optimism for 100 per cent plus mortgages, experts have claimed.
Bestinvest, a financial advice firm, claim that even if house prices stabilise, 100 per cent borrowers will not be at risk of negative equity.
However, the company maintains that this type of borrowing is not for everyone and advice should be sought before taking up such a loan.
Peter O’Donovan of Bestinvest said: “Eventually house prices will continue to increase. And hopefully as they pay off their mortgage, of course, they reduce that burden on the loan-to-value.”
He added: “It’s down to affordability – speaking to a client, getting to know them properly and being able to recommend these sorts of products knowing that you aren’t putting them in any sort of danger.
“Lenders themselves do say ‘no’ if they don’t think its right. They don’t want to have to repossess in a year’s time, it’s not good business.”
However, the Royal Institution of Chartered Surveyors warned that there may be a one in ten chance of a housing market crash in the UK.
