| Non-professionals have been advised against being | | | | cent-plus mortgages]," Mr Mansley said. |
| over-reliant on loans to fund any house purchase, | | | | However, he added that the financial consultancy |
| according to a financial consultancy, as costs other | | | | would be "less comfortable" recommending the |
| than the mortgage itself mount up for | | | | same secured loans to a non-professional, with |
| homebuyers in the UK. | | | | the problem that it may result in the person |
| With the price of extras such as lender fees, | | | | taking on the loan getting themselves into "heavy |
| stamp duty and a deposit all adding to the overall | | | | debt". |
| spend of purchasing and moving into a new | | | | The managing director also suggested that |
| house, Key Financial Consultants has suggested | | | | first-time buyers avoid lending in the form of an |
| that taking on more debt is not the best course | | | | unsecured loan or credit card to help them pay |
| of action for all potential homeowners. | | | | for stamp duty, lender fees or a deposit, |
| According to Dominic Mansley, the managing | | | | suggesting that the interest paid on such lending |
| director of Key Financial Consultants, first-time | | | | means would be larger than on a mortgage of |
| buyers are often guilty of misjudging the cost of | | | | 100 per cent or more. "We wouldn't really advise |
| buying a house: "Since the introduction of | | | | that as a preferred method, because typically you |
| regulation in November 2004 there's been an | | | | will find that the rate of interest on a credit card |
| increase in lender fees, specifically. We also find | | | | or a loan is going to be higher," Mr Mansley said. |
| that they underestimate the costs for legal fees - | | | | Research carried out by GE Money Home Lending |
| searches as well as the conveyancing - and for | | | | in September warned homebuyers of the need to |
| deposits and stamp duty." | | | | be prepared for the associated costs that come |
| Mr Mansley continued by discussing a trend that | | | | with buying a house and moving into a new |
| has recently grown - that of taking on a 100 per | | | | property. According to the research, stamp duty, |
| cent mortgage. While the managing director said | | | | moving-in costs, mortgage fees and utility bills |
| that a larger loan is suitable for certain first-time | | | | comprise 30 per cent of the average Briton's |
| buyers, he implied that only when there is a | | | | annual income, at a total cost of 11,372 pounds |
| future career path planned with increased earnings | | | | for new homeowners. |
| should people look to borrow above the 100 per | | | | The company's head of mortgage marketing |
| cent barrier for a mortgage. | | | | advised people looking to purchase a new home |
| "Where we see people with an expected career | | | | of the importance of a "financial buffer", |
| progression which will result in a higher income at | | | | suggesting that there has never been a more |
| later stages in their life - perhaps they're a newly | | | | important time to have a detailed plan of how |
| qualified professional going through the process of | | | | much different things will cost and how they will |
| building up their career - then we certainly don't | | | | be covered. |
| feel uncomfortable recommending [100 per | | | | |