100% mortgage vs deposit loan

Penny_Less_6

I'm a first time buyer looking to buy this year. It has been pretty much impossible for me to save a deposit.

Looking to borrow under £100k, as a fixed rate repayment.

Can anyone advise on 100% mortgages and the lenders that provide them?
Or is it worth getting a loan to cover a deposit? - I would need £5000, but already have other loan repayments.

I would be very grateful for any advice!

sarah_elton

People on here will be sick of hearing me say this, but I'm getting a 100% mortgage from HSBC, so worth a chat with them. Provided what you want to borrow is within what they'll lend (4.25xsalary for graduates, not sure what for non), they don't mind what percentage it's up to, and there's no additional fee for it being 100% which some lenders charge I've heard.

Not sure who else do them - speak to a broker (search through the forum for tips on what to look for in them), who can search all lenders and see what's available. One thing is HSBC don't deal with brokers for some reason (unless the broker I tried was lying about being whole of market), so chat to them separately. They'll do a quote of what they'd lend you, what repayments would be etc, without doing a credit search. What you want to avoid is approaching lots of lenders who do quotes including a credit check, to avoid searches appearing on your credit file, so check before they do anything.

If it helps in working out figures at all, when I got my mortgage (Nov 2005), I got a fixed rate of 4.99% from them. At that time, the cheapest interest rates were around 4.39%, which I could have got if I'd had a deposit instead....

You need to check with someone (broker maybe?) as I thought I'd heard you couldn't pay for a deposit with a loan or credit cards, since it's not your money, but not sure about that - anyone else know??

Obviously you need to think about a 100% mortgage carefully, as in say 2 years you'll barely have paid anything off, even on a capital repayment one. (*Definitely* wouldn't go for interest only payments). With the market being very stagnant, I'd only go for it if you're planning on staying put or keeping the property at least 5 years. And if worst comes to the worst and there is any form of crash, you can get in trouble quickly....