100% Mortgages for Teachers

snow48

I recently came across the Teachers building society, they offer a deal to teachers which results in a 100% mortgage. As a young teacher trying to buy for the first time this offer looks amazing.

From what I understand (and this is very little as mortgages confuse me) you apply for an 80% mortgage as normal, the teacher's building society will then provide a further 20% mortgage to you. (catch is you have to be a teacher who has worked for more than 1 year in a school)

to find the website just search 'teachers building society'

This seems too good to be true and the whole process is confusing, any help or advice would be greatly appreciated.

CharlieBilly

http://www.teachersbs.co.uk/home.aspx

ViolaLass

http://www.trinityfinancialgroup.co.uk/smaller-lenders-look-to-offer-100-ltv-and-low-deposit-mortgages

Not that straight forward - there's a surprise.

gratefulforhelp_2

In the 90s I did this, the 100% mortgage was provided by Northern Rock.

It is not too good to be true, as a teacher you have (or had before Cameron became PM) an almost guaranteed steady income, with incrememnts each year as your experience grows if you are a young teacher.

The rate is likely to be less competetive than a 75% mortgage, say.

In effect there is a second charge on your property, so if you get reposessed, you owe for both these mortgages before you get anything. Also if property prices drop, you are in negative equity immediately.

That said, if you have your eyes open, it can be useful. Look out for portability, and early redemption charges. Also, consider whether you should fix/cap it.

I bought a home for 40k, lived in it for just over 3 years and sold it for 80k...maybe those days are gone, maybe not.

grholden

ViolaLass wrote: »

http://www.trinityfinancialgroup.co.uk/smaller-lenders-look-to-offer-100-ltv-and-low-deposit-mortgages

Not that straight forward - there's a surprise.

Are you referring to the securing of 20% from the Home Buy scheme here? Is the scheme just available to first time buyers, or current owners?

opinions4u

I think the post code restriction is important to consider. It's also restricted to new build.

Please note that this mortgage is currently available to educational professionals and people purchasing or remortgaging in the BH and DT postal areas.

http://www.teachersbs.co.uk/Libraries/PDF_s/FirstBuy_Flyer_V1_Jul11.pdf

jimjames

Also see this thread

https://forums.moneysavingexpert.com/discussion/3451383

ViolaLass

grholden wrote: »

Are you referring to the securing of 20% from the Home Buy scheme here?

That and "The Tipton’s 100% offering will require a family member to give permission for a collateral charge to be taken on their home and the property must be in the Midlands counties."

So you're geographically limited and you need to have a relative who doesn't mind a charge being put on their home. And, as opinions4u pointed out, it's new build only.

That's a lot of restrictions.

By the way, gratefulforhelp,

"It is not too good to be true, as a teacher you have (or had before Cameron became PM) an almost guaranteed steady income, with incrememnts each year as your experience grows if you are a young teacher."

is just as true now as it was before Cameron became PM. All they've done is stop increasing each pay point each year but you still go up them according to experience. The offer isn't 'too good to be true' once you see the whole picture (as you can tell, I would argue that it's not that good).

GavB79

You don't go up every year automatically now, increments can be withheld subject to satisfactory performance the previous year - though in practice of course virtually everyone just goes up a point.

originalmiscellany

And there's been a pay freeze for the last and next year removing the "with inflation" increase of ones salary.

ViolaLass

originalmiscellany wrote: »

And there's been a pay freeze for the last and next year removing the "with inflation" increase of ones salary.

Except it's the tiers that have been frozen, not people's progression up them.