100% LTV mortgage

arteh

I'm thinking of going to speak to a broker about a 100% LTV mortgage, and I was wondering if anyone had constructive advice for me?

The situation is that we are a late 20s/early 30s couple with decent, stable incomes, but not much chance of saving up a deposit for 3+ years.

I know that the 100% mortgage will be more expensive than even a 95% one, but we live in an area with a very strongly rising market, and also high rents, so it feels like getting on the ladder as quickly as possible might be a better idea than waiting say 5 years before we can get a better deal on a mortgage.

The plan would then to be to remortgage as soon as possible after the initial term of the first mortgage, to get onto a better deal with a decent % equity as a deposit.

I realise this relies on the assumption that the market will keep going up, and recent experience has shown that isn't always the case. But for various reasons I don't feel that this is a risk in our chosen area, so maybe you could humour me on that one if you have any advice

amnblog

Which 100% mortgage would this be?

This is not going to happen unless you have relatives that will offer up either cash or property as additional security (in which case there are about 3 specialist arrangements on the market).

If you cannot put together a 5% deposit I would suggest you should not be buying in the current market as you perhaps cannot afford any rises in future livings costs.

The Help to Buy Scheme is designed to assist people such as yourselves with a 5% deposit from savings or family gift.

csgohan4

100% don't exist anymore, for good reason


Define decent?? As you cannot save up for a deposit for 3 years at least.


Debt? if so hit the debt free wannabee forums to hit it as well as try to reduce your outgoings




Owning your own has it's own responsibility and you have to sort out repairs and they might not be cheap

AnotherJoe

If you can't save for a deposit how would you deal with maintenance costs? Would a mortgage cost less than rent to help you out in that respect ? Or if more, that would seem to be problematic.

arteh

Thanks for the replies guys. Well the current rent is about £900/month, and the mortgage would be around £1100/month (based on some online calculators, I haven't had this confirmed).

Some providers that offer 100% mortgages for first time buyers (with a parental guarantor) are Bath Building Society, Barclays Bank, Vernon and Tipton & Coseley (just looking at first few results for 100% ltv first time buyer, but there are more), though I'd obviously like to speak to a broker about this.

Basically we'll need £15k to £20k cash deposit saved, which will take a number of years. We can still save this amount while paying the mortgage, which would act as a buffer for rate increases or big maintenance issues.

As I mentioned, it's a very buoyant market, where experience has shown a sustained ~£25k a year price increase for the sort of house we are interested, and it doesn't show any sign of letting up.

We don't foresee any major future rises in living costs, and our salaries are only going to go up, which would also help with future rises/maintenance issues.

Thanks for the comments so far guys, much appreciated!

arteh

Also if past performance was an indicator of future performance (I realise that is not necessarily true, but might be a reasonable best guess for the purposes of this), in 4 years time, we would need approx £5k more in cash for a 5% deposit than we would now.....

Smevchenko

Some of the comments are not very helpful. For whatever reason, a person may right now only have a bit of money available for fees etc, and cannot wait 2-5 years to save up a reasonable deposit. Even 5% for a modest family home could be £7.5k. If you have someone to help you, then the 100% mortgage options are a great idea, and can help someone on to the ladder much sooner than might otherwise be possible. That doesnt mean they cant save up for unforseen issues whilst paying the mortgage.

It is my hope to get a Barclays springboard mortgage, as with a young child, the mortgage payment is cheaper than what we currently pay in rent, and we would like our own home to live in. We have some money saved up that could pay for fees etc, and we could stretch to 5%, however, then we would have no money available to us for these unforseen expenses that home owners invariably have to pay for.

davidwood681

Smevchenko wrote: »

Some of the comments are not very helpful. For whatever reason, a person may right now only have a bit of money available for fees etc, and cannot wait 2-5 years to save up a reasonable deposit. Even 5% for a modest family home could be £7.5k. If you have someone to help you, then the 100% mortgage options are a great idea, and can help someone on to the ladder much sooner than might otherwise be possible. That doesnt mean they cant save up for unforseen issues whilst paying the mortgage.

It is my hope to get a Barclays springboard mortgage, as with a young child, the mortgage payment is cheaper than what we currently pay in rent, and we would like our own home to live in. We have some money saved up that could pay for fees etc, and we could stretch to 5%, however, then we would have no money available to us for these unforseen expenses that home owners invariably have to pay for.

That's the problem with society today.

sammyjammy

Smevchenko wrote: »

Some of the comments are not very helpful. For whatever reason, a person may right now only have a bit of money available for fees etc, and cannot wait 2-5 years to save up a reasonable deposit. Even 5% for a modest family home could be £7.5k. If you have someone to help you, then the 100% mortgage options are a great idea, and can help someone on to the ladder much sooner than might otherwise be possible. That doesnt mean they cant save up for unforseen issues whilst paying the mortgage.

It is my hope to get a Barclays springboard mortgage, as with a young child, the mortgage payment is cheaper than what we currently pay in rent, and we would like our own home to live in. We have some money saved up that could pay for fees etc, and we could stretch to 5%, however, then we would have no money available to us for these unforseen expenses that home owners invariably have to pay for.

And your comments are very naive and somewhat dangerous if the safety and comfort of your family are a priority.