Taking out a mortgage 'could have dire consequences'
Those thinking of taking out a mortgage following the help announced for banks this week have been urged to consider the potential consequences.
New aid from the government is intended to increase the availability of loans by giving financial institutions greater confidence.
But Fool.co.uk has warned that although buying a home now may seem like a cheap option, this is unlikely to remain the case.
"When interest rates rise, as they surely will, those mortgage repayments could quickly become unaffordable resulting in dire consequences," noted financial expert at the site David Kuo.
He added that personal debt is Britain is currently over £1.4 trillion, meaning consumers may wish to avoid owing further money.
Those hoping to live in London but avoid such pitfalls may prefer to rent a house or flat instead.
The Council of Mortgage Lenders recently found that first-time buyers were spending 18.2 per cent of their income on mortgage payments in November.
Published 21st January, 2009
© 2009 Estates IT Limited
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Those thinking of taking out a mortgage following the help announced for banks this week have been urged to consider the potential consequences.