First time buyers urged to seek advice

09-Dec-2005

Many aspiring homeowners are unaware of how a tracker mortgage works and how it would affect their payments.

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Research carried out by Alliance & Leicester (A&L) indicated that potential buyers are not seeking out adequate information regarding the mortgage options available to them.

Figures showed that 61 per cent of first time buyers were confused over how a tracker mortgage works, while only 34 per cent of all homeowners realised that the rates are linked to the Bank of England base rate.

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Around 17 per cent thought the interest rates were connected with the FTSE 100 index, while four per cent admitted they thought the payments were fixed.

"Homeowners should ensure they fully understand what type of mortgage they have; they can then be financially prepared should their monthly payments rise," explained Stephen Leonard, director of mortgages at A&L.

"Tracker mortgages generally suit those who have a degree of flexibility in their budget and so stand to benefit from cuts in their monthly mortgage payments following a base rate cut, as well as afford any increases."

Mr Leonard urged anyone who was looking to get on the first rung of the property ladder to seek advice and to consider all the different options of financing their purchase before making a decision.

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