100% Mortgages do they still exist?

Caroline_Anne_2

Hi im a new user so firstly, hi to everyone, I hope you can help.

My partner and I are currently on a joint income of Just over £50000 and are looking to buy iur first home together so both of us will be first time buyers. We have seen our dream home and are really keen. However here is the problem we have no deposit, we have a small amount of money to cover associated fees but I was just wondering if such a mortgage exists. We have both got got good credit and the property is 150000 3x our income.

Can anyone help/advise?:money:

mitchaa

Yes they do still exist.

Google Bristol And West

minimike2

Bristol and West are the only one - But its a special scheme where you have a "sponsor" who goes on the mortgage with you. This person must be a parent or very close relative of one of the applicants. The rates are high too. The product is pretty worthless to be honest IMO. You are better off saving up a deposit first.

rozzy_2

welcome to the site,

I think it will be difficult to find a 100% deal in the current credit crunch.

I would just hang tight and try to save a decent deposit. I went down the 100% route, I now need to overpay and save money to pay of the 10% unsecured loan part of the deal to ensure im not in negative equity when I come to remortgage.

mitchaa

minimike2 wrote: »

The rates are high too. The product is pretty worthless to be honest IMO. You are better off saving up a deposit first.

The current rate is 7.39% which i think is very reasonable. Even if they had a 10% deposit i think they would struggle finding something under 1% lower than that without a huge arrangement fee. The mortgage lending market is bonkers at the moment, i am sure you'll know.

10% deposit on 150k would be savings of £15000.

If you are on a tight budget, who isn't with the cost of living today, how on earth does someone save up £15000? It would take them a few years i would imagine.

£50000 is only 2 x average wage so i doubt they can save a lot if any, as rental/council tax and the general cost of living is sky high and doesn't leave much over.

This product IMO is not worthless. It beats taking a loan out to pay for the deposit also.

It may leave you in negative equity if prices slump but if you are going to keep hold of your home, then it shouldn't matter to you as in the long run, houses will rise.

But the answer to your question is yes, they do still exist. Its upto you how bad you want it.

A quick calculation on £150000 mortgage....

£150k @ 7.39% = £1097.78
£150k @ 6.25% = £989.50

7.39% being a ''bad'' rate and 6.25% being a today ''good'' rate. Difference of only £108.28pm

Not that bad considering you dont need any deposit or savings.

IMO anyway, but im not a mortgage advisor

dmg24

When making any financial commitment, you should take advice from a relevant finance professional. If you look at the MSE guide, this will give you an idea of your best starting point.

Personally I think that 7.69% is a horrific rate, even in the current market (I have just remortgaged and seen my rate rise considerably, but to nowhere near that level). But I am not a mortgage professional, so my opinion only counts as much as that of the next informed person.

I really would take professional advice before making any commitments x

minimike2

Sub Prime borrowers can borrow at less than 7% with unlimited defaults...some as low as 6.1%. Even with CCJs some can borrow at 6.3%. Sure the 7.39 is priced for the risk of the 100%....but that should tell you something...........its almost like they are expecting people to have payment dissiculties.


I will not apply for a First Start product for any clients - if they wish to apply for the product I tell them to do so either directly or through another broker as I personally wouldnt touch it with a barge pole.

rozzy_2

mitchaa wrote: »

It may leave you in negative equity if prices slump but if you are going to keep hold of your home, then it shouldn't matter to you as in the long run, houses will rise.

I think this is the problem though, Im currently part the way through a 5 year fixed term at 5.79%. Using myself as an example, If at the end of the fixed term say I happen to be in negative equity I will struggle to remortgage and possibly end up being switched to my current providers variable rate which is over 7%.

narced

Caroline_Anne wrote: »

Hi im a new user so firstly, hi to everyone, I hope you can help.

My partner and I are currently on a joint income of Just over £50000 and are looking to buy iur first home together so both of us will be first time buyers. We have seen our dream home and are really keen. However here is the problem we have no deposit, we have a small amount of money to cover associated fees but I was just wondering if such a mortgage exists. We have both got got good credit and the property is 150000 3x our income.

Can anyone help/advise?:money:

My advice would be to save as much as you can towards a deposit over the next couple of years. If you manage to get a 100% mortgage now, you will be in negative equity pretty soon. Is it worth the risk?

Conrad

The criteria on the Firststart product make it very difficult to get an acceptance. I had a perfect case where the Father, a high ranking Police professional with almost no debt was alomst declined on all sorts of spurious grounds.

meanmachine_2

mitchaa wrote: »

The current rate is 7.39% which i think is very reasonable.

WORST. ADVICE. EVER.

Save AT THE VERY LEAST a 5% deposit and go with a lender like the post office - 3yr fix @ 5.89%.

In the meantime that 150,000 property will have dropped in price by 10 grand.

Seriously, that's the only moneysaving advice you should listen to.

Anyone pushing 100% mortgages in the current climate should be banned from this site for good.