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Waiting for secured loans could save money, expert suggests

Waiting for secured loans could save money, expert suggests

Category: Loans

Updated: 31/10/2008
First Published: 29/10/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Those hoping to obtain their first secured loan may benefit from waiting to see if prices continue to fall, it has been suggested.

Recent figures from Halifax show that house prices have declined by 13.4 per cent over the last year, Moneyfacts.co.uk noted.

And should that trend continue, first-time buyers could secure a cheaper mortgage by waiting a further 12 months.

Head of mortgages at the site Alan Harper explained that a drop in price coupled with a larger deposit leads to a lower loan-to-value (LTV) being available, which represents a lesser risk for lenders.

"For first-time buyers, falling house prices are a godsend, as up until now many have been priced out of the market. By requiring a lower LTV product, you can get a much more competitive deal," he said.

However Mr Harper added further falls are not guaranteed and waiting does represent a gamble.

Last week the British Bankers' Association found that the number of secured loans granted in September had risen, although they are still at a significantly lower level than a year ago.

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