The 100% Mortgage

Written By Peter Clarkson

Since the financial turmoil that was caused by the credit crunch in the late noughties, lenders have been insistent on First Time Buyers having a deposit to fund their first purchase.

One such group of people who have struggled most with this situation are those in rented accommodation whose income is taken up by their rent and monthly bills which severely impacts their ability to save a deposit. You could almost argue these First Time Buyers have been stuck in a rental trap.

The mortgage market in the UK has always been highly competitive, and out of this competitiveness come innovation and here we are with one lenders ‘Track Record’ Mortgage, which is designed to help these buyers get onto the market without the need for a deposit. 

100% mortgages are not for everyone and if you can save up a 5% deposit for your purchase then you are better placed to be paying your mortgage down sooner, and you will get a slightly better interest rate.

However, if you are in rented accommodation and can prove a track record of paying your monthly rent and bills then there is a new option for you. How does it work? 

  • You (both) need to be a First Time Buyer

  • In rented accommodation and paying monthly utility bills etc

  • Over 21 years of age

  • Clean credit history

  • Buying up to £600,000

The new monthly mortgage payment can be no more than the recent average of your monthly rent

This is no lurch to irresponsible lending but a sensible approach to help those stuck in rented accommodation with little chance to save for a deposit. it is not for everyone however and there are risks and downsides to balance, should house prices drop for example then you will be in negative equity.

Considering the risks against the benefits and how they apply to you personally is important and we are here to guide you on your options and how these break down for your own circumstances.

Get in touch HERE to arrange a no obligation mortgage advice appointment.

 

YOUR HOIME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT.

Peter Clarkson
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