Debt clearance ‘essential for young buyers’

It is essential that young buyers clear any existing debts when making plans to purchase a property, it has been revealed.

Nationwide Building Society has released its top ten tips for graduates looking to get on the property ladder with being able to clear debt outlined as the main priority for young buyers.

The building society confirms that existing debts are taken into account when applying for a mortgage so it is crucial that first-time buyers aim to become debt free before taking that first step on the property ladder.

Expensive debts with high interest rates should be cleared first, for example credit card debt should come before student loan repayments.

Other tips featured in the list include working to a budget, saving for a deposit and shopping around for the best mortgage deals.

Abbey Mortgages also released figures this summer showing the average first-time buyer as having a mortgage of £130,000, almost twice the amount the average first time buyer loan was four years ago in 2003.