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Shared appreciation mortgages 'can be useful'

A new type of home loan has been developed which may be beneficial for people struggling to get on to the property ladder, it has emerged.

The shared appreciation mortgage has been labelled as "quite useful" and an interesting alternative to conventional mortgage products by financial advice firm Zen Financial Services.

Not to be confused with shared ownership schemes, shared appreciation mortgages are "creative" products which work by allowing the lender to take a proportion of the profit which a house makes, providing a method of purchasing a home for people who might otherwise struggle.

Spokesperson for the firm Mike Prendergast said that such mortgage deals are useful "for first time buyers … and particularly in areas where it can be more expensive for first-time buyers to get on the market".

He also said that shared appreciation may be an option for people with credit difficulties who are looking to buy a home.

Statistics from the Council of Mortgage Lenders recently revealed that the number of mortgages taken out by first-time buyers fell by seven per cent from June to July this year. Personal loans can help homeowners' finances.

See how much you could borrow with a home loan from Lombard Direct.
© Adfero Ltd

27/09/2007 17:54:08

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