Beware the negative equity trap
Shopping around for the very best mortgage deal and setting a realistic budget is more important than ever at the moment.
Data from the Council of Mortgage Lenders shows that more than 23,200 people who took out a 100% mortgage in the year to 31 March could face negative equity. This is when the amount borrowed on a property is greater than the value of the property.
Figures like these are causing banks to impose stricter requirements on borrowers. But, on the upside the people who've taken out these 100% mortgages represent only about 2.5% of the total mortgages given out in that period, and a much smaller percentage of the overall number of mortgages in the UK.
And, even if your house does lose its value it only becomes a problem if you have to move, or cannot afford to pay the mortgage.
So the message is, don't discount buying property at the moment, just make sure you shop around and know exactly what you're signing up for.