100% mortgage

gareth1979_2

I know the title of this thread will send shivers down most peoples spines, however, I am currently renting a property and considering moving 'back home' to a cheaper area. I've found a 3 bed house for £75000 and after looking at my finances if bought I will be £500 a month better off than I am now. At the moment, due to rental costs I have been unable to raise a deposit to buy a house. I've checked rental prices in the cheaper area and they are in fact higher than the property purchase prices at this moment in time - which wouldn't allow me to save if I stayed on the rental route.

I've seen a 100% mortgage at Northern Bank but can't find if these are only available in Northern Ireland - certainly it looks like I'd need to apply in branch (nearest of which is Belfast - I'm in South Wales)This new house would be a home for life and I have no intention of ever moving on so the negative equity issue is not really going to be much of a problem. Also, I realise how the market is at the moment, if the Northern Bank Morrtgages are only available in Northern Ireland - are there any simlar products available in Wales. Thanks.

Person_one

How about house sharing or being a lodger for a bit to raise a deposit? Better to 'suffer' in the short term and start your home ownership on a more stable footing. You might think its a home for life now but nobody ever knows what the future may hold.

Also, I haven't seen any 100% mortgages around, and even if they were the interest rates would be so astronomical I wouldn't be at all confident that you'd be better off than renting.

beecher2

Northern Bank mortgages are only available in NI.

Move to cheaper rented accommodation - as Person-one says, a house share would presumably be cheaper. Go onto the debt free wannabee forums for help in saving for your deposit - you'll get good help there.

gareth1979_2

Thanks for the reply. I'm married with 3 kids so the sharing thing is outers. I'm trying to get my kids settled in school and would have no intention of moving until at least after they have left school - youngest is 4 weeks old. Northern Banks interest rates (less than 6% on 100% ltv) are lower than 95% rates I've seen with Ulster Bank etc.

Person_one

gareth1979 wrote: »

Thanks for the reply. I'm married with 3 kids so the sharing thing is outers. I'm trying to get my kids settled in school and would have no intention of moving until at least after they have left school - youngest is 4 weeks old. Northern Banks interest rates (less than 6% on 100% ltv) are lower than 95% rates I've seen with Ulster Bank etc.

The problem is that a lot of people have no 'intention' of moving, but circumstances change and your hand can be forced. With a 100% mortgage you have no wriggle room whatsoever.

gareth1979_2

I see what your saying - if I was to take out a 95% mortgage on the above property I would still only have £3750 of equity (assuming I paid full price). As I will have an extra £500 a month disposable income on 100% mortgage I was going to use this to settle my outstanding unsecured debt of £7000 which would in turn give me a further £250 a month disposable income. The £750 could then be used to make overpayments on my mortgage. Obviously though I see your point about circumstances changing before I'm able to fully realise this.

beecher2

I think you need to focus on saving up the deposit - you can get help on Debt Free Wannabee with upping your income or decreasing your outgoings.

beecher2

gareth1979 wrote: »

I see what your saying - if I was to take out a 95% mortgage on the above property I would still only have £3750 of equity (assuming I paid full price). As I will have an extra £500 a month disposable income on 100% mortgage I was going to use this to settle my outstanding unsecured debt of £7000 which would in turn give me a further £250 a month disposable income. The £750 could then be used to make overpayments on my mortgage. Obviously though I see your point about circumstances changing before I'm able to fully realise this.

As you've also got £7,000 in debt, I can't see you getting even a 90% mortgage at the moment. Pay down the debt, save up a deposit and take it from there.

gareth1979_2

ok cheers for all the replies will do.

paulmcerlean

Northern is for NI only.