Help to Buy – but be careful

A survey of more than 2,000 people has shown that most of them do not understand how a mortgage through the government’s Help to Buy scheme may affect their future credit applications.

In Scotland, 24% of those surveyed said they would consider using the scheme to purchase a property with the year, but nearly half of them intended to take out further credit within a year, even though many of them had no deposit savings. A further 21% had less than £5,000 saved.

42% of those applying for a mortgage had never checked their credit report and seemed unaware that such a thing existed, so it will come as a shock when hire purchase applications are turned down and overdrafts refused. There is a real danger that the government scheme will entice people into loan-shark borrowing that they cannot repay. It is no way to ensure secure ownership of any property so be careful!