High LTV mortgages ‘may aid debt recovery
Mortgages with a high loan-to-value (LTV) ratio may aid debt recovery, it has been suggested.
For house buyers with no funds to put towards a deposit, mortgages with an LTV of 100 per cent cover the entire purchase price of the property.
Paul Davies of independent advisory service Mortgage Financial suggests the products may offer a short-term solution for debt recovery.
Recent graduates with substantial debt after paying for their university education could be a key group to benefit, according to the expert.
“They usually want a fixed rate so they have stability and they also struggle to have a deposit as they leave university with so much debt,” he claims.
“Quite often they know that they can get 100 per cent mortgages.”
However, he warns that anyone obtaining a mortgage could be well advised to consider the long-term implications of rising interest rates and changing financial circumstances.
With a long-term view of finances, the road to debt recovery could be made shorter.
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