100% mortgages?

rebeccasykes1989

Hi Guys this is my first post on here so sorry if this has already been spoken about.

I am not saying that I am intrested in a 100% mortgage, as i've read from previous posts you should save a deposit and do it the right way etc, and personally I don't expect anything for nothing, and have been bought up to save save save! And also know that 100% deposits helped ruin the housing market in the past....

My question is though, has anybody actually got a 100% mortgage, as I have seen a lot of people post that they dont exist, but I have seen ones offered through such places as Aldemore, with their Family Guarentee mortgage - where 25% of the LTV is guarenteed against a parents home.

Any response would be great, thanks guys

Suarez

Just save up the 10%. It's easy enough.

I would have hated to put my dad's property on the line when I applied for a mortgage.

kingstreet

The only 100% mortgages currently available are linked to schemes where family members put up their homes as additional security or allow a charge to be taken over their savings.

There are no traditional 100% deals available.

rebeccasykes1989

Hi Suarez,

Thank you for your response! I do intend to save a depsit (I have 5% but have been advised to save 10-15%) so I have abit more saving to do!

I just wondered if anybody had actually had a 100% mortgage, I just wondered why they were offered if nobody actually used them? And if more people used them would it help the housing market or make it worse?

I can see why people would want to use them as it gets you on property market fast...but in my opinion if you cant save for a mortgage, then you probably cant afford one....

rebeccasykes1989

kingstreet - is the family member responsible for just 25% of the LTV or will they have to foot the whole mortgage in worst case scenario?

Suarez

rebeccasykes1989 wrote: »

I can see why people would want to use them as it gets you on property market fast...but in my opinion if you cant save for a mortgage, then you probably cant afford one....

Hit the nail on the head.

The higher deposit you can get, the better rates become available.

kingstreet

No. AFAIK it's only the excess over 75% they guarantee.

rebeccasykes1989

So in your opinion is there any advantages for these 100% family guarentee mortgages? And are they going to help or hinder the property market?

GAH

Well the rate they are advertising is 5.48 for 2/3 year fixed. In the early part of paying off your mortgage your paying off big chunk of interest small amount of capital.

So I would say that you are more at risk of not be able to remortgage with a high street lender and potentially having to carry on with a higher variable rate with this lender aldermore.

So it will cost you more in the long run.

rebeccasykes1989

GAH wrote: »

Well the rate they are advertising is 5.48 for 2/3 year fixed. In the early part of paying off your mortgage your paying off big chunk of interest small amount of capital.

So basically this type of mortgage would mean the possibilty of being stuck in negative equity for a long time?

dimbo61

With the housing market being FLAT in many areas of the country you would have a 100% LTV now if you take a 2 year deal and only pay a tiny part of the debt off in the 2 years you would still be over 95% LTV when you look to change deals or move lender.
Unless you
1 overpay big style every month
2 have a short term of say 10/15 years