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Life insurance could cover FTB debt

Date: Tue, 02 May 2006

Taking out a life insurance policy could help to cover first time buyers (FTBs) debt levels.

Almost 50 per cent of FTBs have gained over £8,000 in debt prior to buying their first home, according to a report by Bradford & Bingley.

The study shows that 46 per cent of FTBs have debts worth £8,000 or more, with 16 per cent owing in excess of £15,000, with the majority of the debt consisting of credit cards and student loans.

Despite such debt levels many people are keen to step on the property ladder rather than continue renting. However, FTBs are being advised to consider taking out a life insurance policy in order to cover any outstanding debts otherwise their families could risk an uncertain financial situation.

Duncan Pownall, Bradford & Bingley mortgage development manager, said: "Buyers who are already in debt should be wary about taking on additional loans such as 'buy now pay later' deals on furniture and electrical goods. Just as they get used to the mortgage payments as well as paying off existing loans they could be surprised by an additional demand on their budget."


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