First time buyers could benefit from loophole
A loophole has emerged which could be advantageous for first time buyers.
People who borrow 90% of the property’s value are subject to higher lending charges from lenders.
Research conducted by Fool.co.uk indicates that this leads to an typical cost of £26,296 for an individual who pays a 5% deposit on a fixed two year deal upon taking out the policy.
However, it has become apparent that borrowers who take out over 95% of the property’s value are exempt from higher lending charges.
Therefore, Fool.co.uk calculates, a lower charge of £25,206 would come into effect for someone placing only a 4% deposit for their property.
David Kuo, the website’s head of finance, remarked that lenders appear to have been caught napping and created an opportunity for first time buyers.
Over the last six months the proportion of first time buyers in the market has fallen by a fifth, according to MoneySupermarket.com.
Category: Home Insurance News, Insurance News
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