Abbeys move to retain its share of the mortgage market by increasing homeowners borrowing power must be kept in perspective, according to broker My Mortgage Direct.
Paul Hearnden, managing director of My Mortgage Direct, says: The current climate of must-have-it-now has led even the most clued-up borrowers into believing that this kind of offer from a trusted name like Abbey must mean its OK to borrow up to hilt.
Abbeys offer may be interpreted as somewhat reckless at first, but we should remember where the responsibility for sensible mortgage lending really lies.
Borrowers must take a realistic attitude to how much debt they can manage and advisers must ensure that their clients are fully aware of the consequences of overloading themselves with a huge mortgage.
Remember that other credit commitments will reduce the amount of loan available and that how a borrower conducts their credit file will be a very important consideration.
With affordability checks and thorough credit searches, this move should not, in theory, result in homeowners getting into deep water