We read recently that first time buyers are apparently more interested in the amount they can borrow, rather than the fees associated with their mortgage.
Basically, this means that a first time buyer would be more interested in being able to borrow more, rather than being offered a mortgage with no arrangement, solicitors or valuation fees.
Our View
Whilst we believe these comments are true, the underlying message is very dangerous for any buyer, not just first timers.
Whilst the usual lending amount is three times your income, some lenders offer up to five times your income. This is fine whilst interest rates are low but what happens when they rise? Could you really afford to make the monthly repayments.
Our view is very simple. If you can only just afford the repayments now, and the deal is not a long term fixed rate, what will you do when interest rates rise? You run the risk of mortgage arrears, losing your home and having your credit history affected.