FSA launches debt test for first time buyers

27-May-2005

The Financial Services Authority (FSA) is developing a new online debt test to give first time buyers a better understanding of the cost of buying a house.

Click here for advice on first time buyer mortgages or to find out how much you can borrow and how much it will cost you, from the UK's leading High Street Brokers, Bradford and Bingley

Aspiring homeowners can take the test to find a clear indication of their credit position, so that they know what they need to be looking for when finding a mortgage.

It will also give them some guidance on what factors they need to take into consideration when finding a deposit.

And the test has been welcomed by the Council of Mortgage Lenders (CML), which has published a report revealing that two-thirds of first time buyers believe they will benefit from the test.

Click here to ask about the legal costs of house-buying or to ask a legal question specific to your own situation

"Evidence from the CML's consumer research clearly indicates that both current and potential home-buyers feel that the concept of a 'debt test' would be useful when they are assessing their ability to afford a new home and the associated repayments," explained Alex Solomon, policy advisor at the CML.

He added: "Problems faced by mortgage customers can be minimised by a combination of improved understanding of the risks associated with home-ownership and the availability of a co-ordinated and comprehensive safety net."

It is hoped that the new test will reduce the increasing levels of debt in the UK by informing aspiring first time buyers about the potential pitfalls of purchasing a property.

Click here for our first time buyers guide

Click here for further information on finding a deposit

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