1st time buyer req,s 100% mortgage

steve1_3

my son wants to buy his 1st home (hurrah) where can we go to get good advice on 100% mortgages

meanmachine_2

The usual good advice on here is that 100% mortgages are BAD and in the current climate could well put your son in negative equity, should there be falls in your area.

If you want to get rid of him, gift him 5% and he'll get a much better loan rate.

steve1_3

thanks for the advice - but 5% would you not consider a lodger

as400

The current market is seeing some houses loose their value slightly in some parts of the country. Buying a property is a long term thing over 25 years, you may well experience an initial negative equity with a 100% mortgage but so what?

Think long term, don't start freaking just because of the possibility of a brief period of time when some negative equity may occur.

To the original poster, most financial instituions will offer a 100% mortgage product, does your son have a relationship with a financial organization already that perhaps demonstrates his financial worth?

If not get some advice from at least 2 independant financial advisors.

Robert_Sterling_3

meanmachine wrote:

gift him 5% and he'll get a much better loan rate.

I agree.
If you can afford it.
It will save him any high loan to value fees he otherwise might have to pay.

meanmachine_2

as400 wrote:

The current market is seeing some houses loose their value slightly in some parts of the country. Buying a property is a long term thing over 25 years, you may well experience an initial negative equity with a 100% mortgage but so what?

.

In the context of the OP's post, that's terrible moneysaving advice.

A) You'll pay a higher loan rate
you might well pay a HLC
c) if you haven't got a deposit, how will you afford any other fees?
d) Presumably the OP's son isn't going to be staying in the same property for 25 yrs, that's why you put at least 10% into a property as a deposit, so that you have some buffer against neg eq and so you can move at some point. You do realise that neg eq can result in ther bank seeking funds from you to make up the shortfall?

100% mortgages have never been a good idea and in today's climate they're bordering on the insane.

madfrenchgirl

Well, i agree they are bad... tell your son to save on his rent for a year or two, and then get a mortgage!

Mind you you dont give us much info...

But anyway, give your son this website: https://www.charcolonline.com , I use it from time to time.

Joe_Bloggs

To echo madfrenchgirl give your son this website and have him explain what he has done with his earnings to date. Your son is lucky to have such a kind and thoughtful father but your son should also put some effort in to realising the financial consequences of a mortgage. You may be able to take in a lodger (tax free) to stop your son from coming back (In jest) and fund a deposit.
J_B.

sarah_elton

I'm in a similar position to OP's son. I'm currently thinking about buying but it would be with a 100% mortgage. To answer the question about fees etc, my mum is loaning me a few thousand to get me started in that respect. I am currently renting. I know I will pay a higher rate on a 100% mortgage, but in the time it takes to save a deposit I will have thrown away roughly another £15-20,000 on rent, and on that basis am considering a 100% mortgage.

I have a detailed monthly budget worked out both for rent and mortgage instances. I take the negative equity point entirely but would not be looking to sell for at least 5 years, and having tracked the market and the way it's slowed and has now stagnated, I believe it's been a controlled slow and we won't have an early 90s style crash. She says. )

As I said, am I nuts? I'm not looking to even make any money on the property - but even if it stagnates and I get what I paid for it, way I see it over the same period it's going to have cost me a hell of a lot less than I'm paying in rent....

Any advice? Timely as I've had a low offer on a property rejected and am sleeping on it over the weekend before going to my maximum.....

carl310166

My son and girlfriend are in the process of buying at the moment.

He came back from the mortgage advisor,and told me they would need NO deposit,and they could put the valuation fees,and solicitors fees on top of the mortgage....i was a bit concerned,so i went with them on their next appointment.

The advisor explained that with e.g Northern Rock,they would lend you 95% as normal,but they would lend you the rest as an unsecured loan at the same % rate.

It is a slight worry,but this is the only way for them to get on the housing ladder unfortunately.

YorkshireBoy

as400 wrote:

...most financial instituions will offer a 100% mortgage product...

We shouldn't forget though, that this is 100% of the valuation - not the purchase price. In the current "unsettled" climate I can imagine lenders being very careful not to expose themselves to potential negative equity should borrowers default.