The recent withdrawal by lenders of the 100 per cent mortgage and the current lack of cheap mortgages has hit means that first time buyers. People now need to raise a bigger deposit for their house purchase, which is leading them to seek other methods for raising funds. According to a recent survey online almost a third of all first-time buyers are using borrowings, unsecured loans and credit card debt to raise the deposit they need. Doing this can be risky in the current uncertain market because even a small change in circumstances or shift in prices could put these buyers in danger of negative equity and could possibly even lead to them losing their homes. The only way this is not a problem for them is when they are in a very secure financial position and have other assets that they can fall back on,which is not common for most first-time buyers. A survey of 250 first time buyers showed that 13 per cent were raising the deposit of 10,000 to 15,000 pounds through a cheap unsecured loan or credit card, while 17 per cent were borrowing the deposit from family or friends.
Related reading: Cheap Unsecured Loan
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