First time buyers are facing higher and more costs than before.
Just over 2m people aged 34 or below plan to borrow four times their salaries to buy a home. 828,000 of them plan to borrow more than five times their income, with 290,000 about to borrow over six times, so research from Mform.co.uk confirms.
Current Bradford &Bingley figures reveal that 68% of first time buyers are about to pay stamp duty, with 1 in 9 reducing their deposit to cover the tax. Another 1 out of 11 use a loan or credit card to pay for stamp duty, with 1 in 14 unaware how they are going to make this payment.
With property prices rising and wage inflation failing to keep in line with this, lots of young people seeking to get on to the property ladder are going to take on massive debt .
A huge number of people take on interest only mortgages as they are not able to afford to repay the capital on what they have borrowed, and will be highly affected by interest rate increases.
Many parents are even having to help out their children on the property ladder.
Over a third of parents withdraw money from savings , change lifestyles, remortgage, take retirement later or take out an equity release product to assist their children. This could of course affect their financial future.
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First Time Buyers Face Higher Mortgage Costs
Fri, 27 Jul 2007
Recommended links
First Time Buyers Spend Their DepositsFirst Time Buyers Opting for Fixed Rate Mortgages
First Time Buyers Forking Out More Than GDP 150,000
Apply For a First Time Buyer Mortgage
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