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by Richard Vert
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istic.”
With over one in six FTBs turning to relatives and more high street lenders offering 100% mortgages, or even 102% from Lloyds TSB and Scottish Widows, to help buyers get onto the property ladder, some may be able to squeeze onto the first rung, but end up with long-term crippling debt in the process, fuelling the continued house prices inflation.
Various banks have come up with innovative methods to help facilitate the ability of FTBs to purchase a house which, whilst not addressing the real problem of house prices, will allow more people to own their own home.
A guarantor mortgage can increase the amount that can be borrowed, as long as the borrower’s parents have enough income to cover all their own debts, plus their child's mortgage each month; however the parent will not have to make any payments themselves unless their child’s mortgage goes into arrears.
An offset mortgage could mean that money from a parent’s savings account can be offset against their child’s mortgage. Although the parent would not receive interest on their savings, the reduction in the amount to be paid by their child could make a big difference, and they would not incur tax on the amount either.
A ‘Professionals’ mortgage is a possibility for certain workers, which allows them to borrow more than their initially low-pay career would usually make them eligible for, on the understanding that their future pay will increase rapidly as they become high earners.
Whilst some may urge for caution to prevent the possibility of building up financially crippling levels of debt, others see a need f |
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