Press Release

DOES HELPING OUT WITH THE FIRST MORTGAGE RISK PARENTS' CREDIT RATING?

Equifax provides advice on the implications for guaranteed mortgages and deposit assistance

www.equifax.co.uk

London, 26th May 2009 - Leading instant online credit information provider, Equifax, has welcomed the most recent developments to help first time buyers get onto the property ladder. "It is hugely encouraging to see a number of lenders develop new products for the first time buyer market which is key to stimulating the UK housing market", confirmed Neil Munroe, External Affairs Director, Equifax. "This sector has had difficulty meeting the large deposit requirements that have become de facto, so products like the Lloyds TSB 'Lend a Hand' mortgage that requires assistance from parents for the initial deposit are a really good sign.

"But parents do need to be aware that if they undertake to guarantee one of their children's mortgages their financial history will be linked with that of their child. Whilst I am sure that in the majority of cases this won't be an issue at all for the family, if the child does hit financial difficulties in the future it could have a detrimental affect on the parents' ability to get credit.

"We don't want to discourage this sort of activity to help the next generation get on the property ladder. But we do want parents to be fully aware of the implications of taking on linked financial agreements with their children. After all, in this new era of reduced availability to credit right across the consumer marketplace, it's vital to ensure that you have the best possible credit rating to ensure your application isn't declined, and you get the best deal available. Any detrimental information, including defaults on a linked financial agreement, will count against someone for new applications."

To be clear on how a financial link can affect their credit file, Equifax recommends parents get a copy of their credit report both before and after the new mortgage has been set up. The new Equifax Credit Report provides the facility to access credit information for the first 30 days free.

Accessible simply by logging onto www.equifax.co.uk it is designed to help individuals understand their credit file and see what lenders see to assess new credit applications. It also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life's challenges. If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.

Equifax Top Tips for First-Time Buyers

Before you do anything get a copy of your Credit Report - www.equifax.co.uk.
When calculating what you can afford, make sure that you factor in all expenses including conveyancing, stamp duty, solicitor fees, and Estate Agency fees.
Shop around for the best mortgage deal- get at least 3 quotes to compare.
When shopping around ensure enquiries are logged as 'quotation' (soft) searches rather than 'application' (hard) otherwise it could impact on your credit rating
Ensure you take account of all the costs, as some deals look good on the surface, but can be more costly once you have added in the arrangement fee, etc.
Always take an experienced home buyer, such as a parent or a home-owning friend, when looking at property - you don't want to miss anything that may cost you dearly in the future to fix
Set out a monthly budget as it all adds up! Remember to include expenses such as council tax (check which band you are in), gas and electricity bills, house/building insurance, travel expenses, boiler servicing, ground/maintenance rent (If leasehold)
Don't lie on your application, such as increasing the amount you earn or saying you have a perfect credit history - you may be found out and it could jeopardise your chance of getting a mortgage!
If you find it all a bit confusing or you don't have time to re-mortgage consider consulting an independent mortgage advisor

ENDS

For further press information please contact: Elinor Puzey, Louise Fowler, Cecile Stearn or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: elinor@harrisonsadler.com