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100% plus mortgages on the up.

The number of first-time buyers taking out a mortgage greater than the value of their home has risen by 50%, it was claimed this week. Brokers at the Mortgage Advice Bureau said homebuyers opting for a 100% mortgage rose by 21% in 2006, while those opting to borrow more than the value of their property grew by a half.

Research also indicated that about one in 10 borrowers are now choosing to borrow the entire value of their property or more.

The Mortgage Advice Bureau said the rise in the amount being borrowed highlighted the growing necessity of 100%-plus mortgages in the face of rising house price inflation and interest rates hikes. It said that many first-time buyers find it impossible to save towards a deposit and that 100% mortgages were the only way to get on the housing ladder.

But the news is likely to heighten concern that some homeowners are stretching their finances too far and overburdening themselves with debt. Research found that some maiden homebuyers were choosing to take out a 100% mortgage so that they could use saved capital to fund additional costs such as furnishing a new home.
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Publication:Western Mail (Cardiff, Wales)
Date:Feb 28, 2007
Words:194
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