Abbey in trouble…
*** WARNING! Before we start this post I should advise you that italics may contain sarcasm! ***
In possibly the most ill advised move possible considering the current Northern Rock crisis, Abbey have decided that the best way to increase confidence in the mortgage market is to launch a mortgage for 125% of a properties sale price.
This instantly plunges your average house buyer into £25,000 debt as well as having a house mortgaged to the hilt, which could of course go down in value considering the slowing housing market. And should you miss a payment, it could be bye-bye house as it is all secured on the new home.
However Abbey are limiting the extra amount that you can receive with this scheme to £25,000, so if you were to buy a £200,000 house you would only be able to borrow an extra £25,000, or 12.5% of the homes sales price. Well I guess they are looking out for all us little people after all!
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