Alliance & Leicester’s latest report has revealed that the average FTB has £5,860 of debt and the building society has warned that it is sensible to clear this first before committing to a mortgage.
“Our research reveals that while many first time buyers are diligently saving for their deposit, some are not being as financially frugal as they could be,” said Stephen Leonard, director of mortgages at Alliance & Leicester
“Whilst buying a house can seem like a top priority, those looking to buy for the first time will find it worthwhile to pay off their outstanding debts first.”
Earlier this year, a Bradford & Bingley survey also warned that a large proportion of FTBs are saddled with as much as £16,000 debt upon taking out a mortgage.
Mr Leonard added that it is wise to clear debt before taking on a mortgage for if financial circumstances change and debt adds up, missed repayments can result in the loss of a house.