Mortgage indemnity guarantee "a good solution" for FTBs
15th Nov 2011
The reintroduction of a mortgage indemnity guarantee (MIG) scheme could provide a "good solution" for many first-time buyers (FTBs), according to one expert.
Andy Pratt, chief operating officer at independent mortgage adviser Alexander Hall, said MIG has been a good solution for many buyers in the past and there is no reason why it shouldn't be the same going forward.
His comments followed the Confederation of British Industry's short-term recommendations to help the housing market, which include introducing an MIG insurance scheme to enable FTBs to take out low-deposit mortgages.
This would subsequently allow them to access savings locked up in their personal pension pots to boost their deposits.
Mr Pratt commented: "It has been mentioned in virtually every mortgage-related forum that I have been to in the last couple of years, when people are talking about the stimulation of the market."
He noted that this provides "a certain level of security" against a higher level of risk, so there is no reason why it would not work once more.
If there is a problem then it would be with the insurance companies, according to Mr Pratt, who noted that they stopped doing a number of lines for various reasons, but may need to be "re-engaged" to provide the supply of the product.
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