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HOME TRUTHS.

QI'M looking to buy my first home and have seen a new flat I'd like in the west end of Glasgow.

The problem is the selling price is pounds 150,000, which means I'd need a mortgage bigger than three and a quarter times my salary, which my dad says is the standard loan.

With interest rates so low, I could easily afford the repayments on a larger mortgage. Would any lender consider this?

AQUITE a few firms have been allowing single people to borrow up to five times their annual income.

Although these loans might seem affordable at today's interest rates, our mortgage experts London & Country, warn that you may be taking a big risk.

Could you still meet the payments if rates rise? You might want to consider a joint mortgage with a partner or friend.

QBECAUSE of the poor performance of my endowment, I have now switched to a straight repayment mortgage.

I know that I lost my life assurance cover when I gave up the endowment and will now have to take out a new policy.

I've been told that something called "term assurance" would be cheaper. Could you explain what this is?

ATERM assurance pays out a lump sum if you die during the term (the number of years) of cover, hence the name.

There are two types of cover available. The cheapest and most suitable cover for a mortgage is called Decreasing Term.

With this policy, as the sum you have borrowed on your repayment mortgage decreases, so does the life insurance. Most companies say that as long as mortgage rates don't rise above 12 per cent, they guarantee that decreasing term will pay off the mortgage.

The cost of this depends on your age and general health. For example, a 35-year-old non-smoking woman would pay pounds 6.40 a month with Norwich Union for pounds 100,000 decreasing term cover.
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Publication:Daily Record (Glasgow, Scotland)
Date:Sep 11, 2001
Words:317
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