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Boulger backing threeyear fixes for FTBs

Brokers should offer threeyear fixed-rate mortgages to first-time buyers in the current property market, according to John Charcol senior technical manager Ray Boulger.

He told delegates at the Mortgage Business Expo in London last week that there is a better case for taking longer-term deals such as three-year to five-year fixes in the current property market for FTBs wanting a high loan to value.

He also said that tiered rates are better than higher lending charges on shorterterm deals and are more in line with treating customers fairly but added that HLCs can often be cheaper on longer-term deals.

Boulger said that John Charcol has not seen any increase in the number of cases rejected for first-time buyers since the credit crunch took hold of the markets in August. He told delegates to make sure they place a case where it fits best first time.

He also said that he believes the shared equity market will see an increase in popularity. He said: “We already know that Yorkshire Building Society is planning to launch a shared equity scheme next year. I think the market will become increasingly popular over the next two years.”

Boulger said he does not see a problem with interest-only mortgages for FTBs. He said: “As long as the borrower is aware that they need to at some point pay the mortgage back, I do not see a problem with it. It makes sense to pay the most expensive debt back first, like credit cards.”

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