Individuals looking to purchase their first property may find themselves getting into financial difficulty by taking out a loan to fund the venture, one expert has suggested.
Louise Cuming, head of mortgages at comparison site moneysupermarket.com, remarked that with 13 per cent of under-34s looking to get on the property ladder in the next year some could look to borrowing to pay for the initial deposit.
She said: “Taking out a loan to pay for a mortgage deposit is a dangerous move and must be avoided even if it means you have to delay buying your first home.”
Stringent lending criteria may be causing an increasing number of people to approach banks for a deposit, but providers will refuse applications if they learn it is for a first payment on a house, Ms Cuming added.
Her comments come after research conducted by the organisation found that 16 per cent of 18 to 34-year-old buyers looking to purchase a residence in the next 12 months are aiming to take out a loan.
Earlier this month, Helen Adams of FirstRungNow.com stated that first-time buyers should not be hit with expensive rates.
By Francis Finch