100% mortgages?

droiderm

Or, overpay a 160,000 mortgage by £200 per month for 3 years , at a rate of 5.48 and the balance would be 142,402. Without overpayment it would be
150,244

rebeccasykes1989

So would the parent only be a guarentee until 25% of the LTV is paid? I definatly agree that just saving for a deposit is better in long run....

droiderm

No idea about your question.
But there is a balance in my opinion between saving longer to get a larger deposit, or getting a house quicker, not paying rent and overpaying the mortgage.

rebeccasykes1989

droiderm wrote: »

No idea about your question.
But there is a balance in my opinion between saving longer to get a larger deposit, or getting a house quicker, not paying rent and overpaying the mortgage.

Yes good point, although fortunatly i'm in a good position to save as I live with my mum and only pay a small amount of board each month

R_P_W

I did have a 100% mortgage back in 2007. Selling my house now I am just going to break even to pay the outstanding mortgage.

However in that time I got married and we jointly we able to save a 15% deposit to buy a flat in London.

If I was offered a 100% mortgage again, would I take it - no. Is it the root of all evil - no. But since they are not available and probably never will be it doesnt really matter.

ACG

There are 2-3 100% deals im aware of.
The lenders have different ways of working it. As kingstreet says, i think its only the 25% they would be liable for should you stop paying.

You would only be in negative equity if house prices dropper. If you stayed te same you would slowly gain the equity as you pay it off. If houses prices went up then you would gain equity quicker.

It all depends where you buy, some places houses are increases in value other the opposite can be said.

I dont see a problem with 100% mortgages in general - but i dont think theyre for the masses.

I bought my house, i have no intention of moving in the next 3-5 years so as far as im concerned i couldnt care less if my house was valued at £5 or £500,000 - so long as when i do come to move its valued at more than is outstanding (preferably with some profit in it).

rebeccasykes1989

Thanks for your response ACG, this thread has been very helpful getting peoples opinions. There are so many different mortgages/deals etc I just wanted to find out a bit more about ones I wasnt too sure on!

kidmugsy

rebeccasykes1989 wrote: »

Thanks for your response ACG, this thread has been very helpful getting peoples opinions. There are so many different mortgages/deals etc I just wanted to find out a bit more about ones I wasnt too sure on!

Just for some perspective - the classic US mortgage deal before WWII was that the purchaser put up 50% of the purchase price and took a mortgage that had a much shorter life than we expect nowadays.