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.

So you still need a 100% mortgage. What you need to be careful of is not overstretching yourself to far that you can’t afford to pay the bills. 100% mortgages are commonly used to help people get onto the housing ladder.

The obvious concern now is will you be able to afford the mortgage payments when you fixed rate comes to its end. Always consider a longer fixed period, this will hopefully give you time to adjust you finances to suit your commitments. 100% mortgages are still available and for someone with a long term plan and a well managed monthly budget they can still offer a way of purchasing your dream home.

100 % mortgages are a loan for the full purchase price of the property, lenders are not offering any more than this. 125% mortgages have all but dissappered for now.

100% mortgage choices are limited. Very few lenders offer 100 percent mortgages and the ones that do offer 100 percent mortgages have always charged a higher interest rate than they would for a mortgage covering a lower percentage of the purchase price. i.e. 97% or now more commonly 95% & 90%. 

As well as having to pay a higher interest rate due to the risk taken by the lender, you may be charged a larger higher lending charge premium (also referred to as mortgage indemnity guarantee MIG) than if you put some of your own cash towards the purchase. However, to help with your initial upfront fees, most lenders will allow you to add the MIG to your 100% mortgage. You have to consider that you will be paying interest on the MIG for many years.

There are now some mortgage lenders that offer 100% mortgages without charging a mortgage indemnity guarantee premium. These 100 percent mortgage lenders also can lend higher than standard income multipliers they are generally 4 times your income, however their interest rates for these 100 percent mortgages are again higher than a 97 & 95% mortgage.

If you are borrowing the maximum 100% mortgage, you should consider a fixed or capped interest rate mortgages, since these buy valuable protection against the risk of rising mortgage interest rates.

The Financial Services Authority has announced today that one in five people are worried about making mortgage payments in 2008. Many 100% mortgages deals and borrowers whose fixed rates will be coming to an end this year will be extremely concerned what their new payment will be.  

The FSA is so concerend that they will be launching a £2m advertising campaign. Northern Rock is only offering 100% mortgage borrowers the standard variable rate when borrowers fixed rates expire. Other lenders have not passed on all the rate reductions as they are struggling to make profits.

“Economic conditions are getting tougher, putting pressure on family finances,” said Chris Pond, FSA director of financial capability. fsa.gov.uk 

The poll of 2,011 people aged over 16, of whom 573 were mortgage holders, found that 19% of those asked were concerned about meeting the cost of their mortgage repayments.

Last month, the Council of Mortgage Lenders (CML) cml.org.uk/cml/statistics said repossessions rose by 21% in 2007 to 27,100 homes, the highest figure since 1999, which reached over 70,000.

Many 100% mortgage borrowers and people who’s fixed rate is coming to end would be wise to start shopping around and talking to a mortgage broker. If they are gtting into any difficulty they should talk to their lender as soon as possible, or contact a  free independent debt advice service.

For a long time there have been calls for free advice funded by levies from companies regulated by the Financial Services Authority. More so now with Bad credit mortgages and 100% mortgages being a regular topic in the news due to the current changes in the world economy.  

A report conducted on by Thoresen Review of Generic Financial Advice, commissioned by the government, suggests a £12m two-year pilot project.

It said a telephone; internet and face-to-face advice service should be funded by the government and by levies from the financial services industry. 

Otto Thoresen, the head of the financial services firm Aegon, was asked by the Treasury to design a national money guidance service. His review suggested that people would use such a sales-free service for significant life events that affect finances, such as starting work, buying a house, having a baby, divorce or retirement.

Many first time buyer mortgages now require a deposit of between 5 and 10%. Some lenders are insisting more stringent credit checks. A minor change in your credit report in the wrong direction like a late or missed payment on your credit card is likely to see you declined for any of the best mortgages available.

The Citizens Advice Bureau has gone on record saying there service is busting at seams. Good quality debt advice should be available to everyone.

Looking for a shared ownership mortgage. Many first time buyer mortgages are for a shared ownership mortgage which suits their needs?  Every one wants a cheap shared ownership mortgage deal at the best rates available.

Shared ownership mortgages are usually arranged on a 100% mortgage, 50% or 25% part rent part buy basis. For many people across the country this can be the only way to get a foot onto the housing ladder they are very popular with first time buyers.

When you buy a shared ownership property, you only buy a percentage stake in the property, usually 25 to 50 per cent – from a housing association. Although this can be affordable, as you only own a percentage of the property you will miss out on some of the equity growth if the housing market starts to rises again. You can, however, staircase which means buying another portion of the property later on. Many lenders insist that this option must be available.

Cheap shared ownership mortgage rates enable a borrower the following benefits, Low interest rates, easy repayment options. Remortgage loans replace the existing shared ownership mortgage with a new one from either the same lender or a new lending company. It helps to reduce monthly payments and release home equity. Competitive shared ownership mortgage deals help individuals become financially stable.

Getting a cheap shared ownership mortgage could be a way of reducing your monthly outgoings for other expenses.  Many lenders are now offering more competitive interest rates to attract new business, ask your broker to source different deals from different lenders to compare which is the cheapest shared ownership deals

Once you have registered for with an affordable housing company you will be assessed for eligibility. If you are accepted remember to enquire what the rent will be for the share you will be renting as your broker will need to know when applying to a lender for a decision in principle.