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Renting and saving a deposit v buying with 100% mortgage
Shellbob83
Posts: 10 Forumite
Hi
Me and my husband are currently renting and have recently cleared all our debt and are now saving a deposit to buy a house. I was just looking at mortgages however and I notice that there are some companies doing 100% mortgages again. I know starting a mortgage with no deposit isn't the ideal as the interest charged is higher however my thoughts are that we would be paying the same in mortgage repayments (if not less) as we are in rent (currently £700 a month) so would it be better to take out a mortgage with higher interest initially and keep saving so that when we remortgage in 3 years we will have a lump some to put towards the remortgage. Rather than carry on saving and renting for 3 years and pay our landlord over £25,000!
With our current saving ability we should have £6000 by the end of the year so potentially £18000 after 3 years when the mortgage would be due for renewal.
My husband isn't sure and worries that we wouldn't be able to just put a lump sum down when it comes to the time of remortgaging as this might be classed as a massive overpayment.
What are people's thoughts? Am I being ridiculous and have missed something really obvious as to why we can't do this?
Thanks for you help in advance.
Me and my husband are currently renting and have recently cleared all our debt and are now saving a deposit to buy a house. I was just looking at mortgages however and I notice that there are some companies doing 100% mortgages again. I know starting a mortgage with no deposit isn't the ideal as the interest charged is higher however my thoughts are that we would be paying the same in mortgage repayments (if not less) as we are in rent (currently £700 a month) so would it be better to take out a mortgage with higher interest initially and keep saving so that when we remortgage in 3 years we will have a lump some to put towards the remortgage. Rather than carry on saving and renting for 3 years and pay our landlord over £25,000!
With our current saving ability we should have £6000 by the end of the year so potentially £18000 after 3 years when the mortgage would be due for renewal.
My husband isn't sure and worries that we wouldn't be able to just put a lump sum down when it comes to the time of remortgaging as this might be classed as a massive overpayment.
What are people's thoughts? Am I being ridiculous and have missed something really obvious as to why we can't do this?
Thanks for you help in advance.
0
Comments
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Good luck finding a 100% mortgage these days.0
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The only "100%" mortgages available today involve a relative tying up their savings or their home as additional security.
There are no true 0% deposit products available today.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thank you kingstreet. This is the not so 'obvious' bit I was missing then.
Back to saving then!0 -
Shellbob,
Me and my mate were buying our first homes a few years ago. I bought what ever I could which ever way I could ASAP. My buddy is still 'saving for a deposit' and I made about 150k profit since then. I would recommend you buy ASAP instead of wasting 700/month in rent specially if you live any where in SE.0 -
Buying and selling is expensive and there are many costs to owning a property which you don't have as a tenant.
I hope you don't live in the SE or London where house prices are stupid.
Save hard and open Help to Buy ISA,s and Lifetime ISA,s when they are available.0
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