Credit responsibility key to first time mortgage

03-Feb-2012

Credit responsibility will become a bigger part of policy for mortgage lenders, as recent results show that half of all buyers with a ten per cent deposit are refused a loan.

First time buyers who have exercised good credit responsibility, by paying bills on time and paying back credit card debt, are more likely to get a five or ten per cent loan, according to industry experts. This has left many first time buyers struggling to take advantage of the more attractive rates.

Banking confidence is still low in the market, which is why the return of healthy mortgage rates has only just occurred. However, a recent McKinsey survey has found that confidence may be seeping back into the economy. Executives in financial services indicated that they feel positive over the future outlook of the economy, which is good news for fist time buyers as it shows that trust may soon return.

Until then, many first time buyers may find they have to prove that they are a safe investment.

Aaron Strutt, adviser at broker Trinity Financial, said: "Lenders have been offering more low-deposit mortgages. However, borrowers still need an excellent credit score to qualify for one of these deals."

It’s very important to seek impartial mortgage advice for first time buyers.

Published by Sam Franklin

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