A few 100% mortgages lenders available
Many people still want a 100% mortgage. Many people still think you can borrow over the value of your property; these mortgages were available up to 125 % of the value of your property. 100% mortgages are still available, but the market is extremly limited.
The two deals that are available have a strict lending criteria. You have to be over 21, your income must be more than 25k you can only lend on repayment basis and it’s only for people who are buying. They will only lend you up to 100% of the mortgage. 100% mortgages have very strict credit rating criteria. Squeaky clean is the phrase that comes to mind. The other 100% mortgage lender is similar to a guarantor mortgage, except the property is the security for the 100% mortgages lender. The lender requires security of 25% of your parent’s mortgage.
What you need to know about 100% mortgages:
Apart from charging higher interest rates for 100% mortgages the other risk for the lender is possibility of negative equity. As no equity is placed within the property value, because there is no deposit, if house prices instantly decrease after the property is bought then no equity exists as a buffer. This means that if you need to sell your home the 100% mortgage taken out on the original value of the property would outweigh the property new value.
