How does the 100% mortgage work?
We have seen the introduction of a new 100% mortgage product that means as a buyer you will not need to provide any upfront deposit towards the purchase of a property.
This could be great news for renters that are struggling to save for a deposit, as there has not been the option of a 100% mortgage in the UK since 2008.
The mortgage product is called ‘Track Record Mortgage’ and is aimed at first-time buyers. As the name suggests it will be based largely on your track record of rental payments.
Usually, the minimum deposit required to buy a property is 5%. Using this product can help you get out of the rental cycle and onto the property ladder without having to find a large deposit payment upfront.
Based on a purchase price of £180,000 this would be a saving of £9,000 deposit. (If we were working with the minimum deposit of 5%).
Am I eligible for this mortgage product?
The amount you can borrow will be based on the lenders affordability which will include a full assessment of your current income and outgoings. They will also use the amount you currently pay in rent each month to help assess the affordability. The new mortgage payment will have to be equal to or lower than your current rental payment.
Not everyone will be eligible for this mortgage product, and it will be based on individual circumstances. We will be able to talk you through the criteria and help establish if it is something that might be a good fit for you.
Some of the key eligibility criteria includes:
- Each applicant must be a first-time buyer
- Each Applicant must be aged over 21
- Must have proof of 12 months consecutive rental payments made in the last 18 months
This is just a few criteria points that must be met, as we can talk you through the full list if it is something you wish to explore further.
If you are interested in this mortgage product and think it might be something that can help you get on the property ladder, then get in touch today to see if we can help.
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.