| When
you're looking to get your foot on the housing ladder, it can
seem like a daunting task. A 100 percent mortgage
could be the answer. You could wait until you have at least
a 5% deposit or you could aim to get on the housing ladder now
before property prices move too far out of your reach.
As
raising a deposit can be the stumbling block, a number of
lenders provide access to a 100 percent mortgage
to overcome this problem.
Some
of the mortgages on offer can even lend beyond the value of
the property by offering additional funds on an unsecured
basis, but at the same rate of interest as the mortgage secured
on the property. This is very useful if you need to add the
costs of your solicitor, stamp duty, land registry, and valuation
fee. Alternatively if you wished to borrow additional funds
to help furnish the new property, then funds could be raised
for that as well.
Please
be aware that you may have to pay an above average interest
rate for a 100 percent mortgage. This covers the added risk
that the lender is taking. Another factor to cause the interest
rate to be higher is the lack of competition in the market,
with only a handful of lenders offering 100 percent
mortgage
Whilst
the interest rate is likely to be higher than that of a mortgage
where a 5% or 10% deposit is being provided, this does not
mean that the mortgage itself can not benefit from some of
the more desirable flexible features.
An
example of the criteria for a 100 percent mortgage
is:
- Mix
of secured and unsecured borrowing within maximum stated
Loan To Value limits - Max 95% secured loan + 30% for unsecured
loan.
- Overpayments,
underpayments, redraw facility and payment holidays
- Daily
Interest
- No
Mortgage Indemnity Guarantee (MIG)
- No
overhanging 'Early Repayment Charge'.
- Portable
To
calculate the maximum borrowing for a 100 percent
mortgage, the following calculation can be used to
determine an approximate level of mortgage. Please note that
mortgage lenders use different methods of determining the
maximum mortgage available, and so you should talk to a fully
qualified mortgage adviser for full details.
Maximum
Income Multipliers(dependant on credit score) of 5.2 x the
first salary + 1x the second salary or 3.8x the joint salary
less an amount for existing credit commitments.
Hire
purchase : Taken into account
Personal Loans : Taken into account
Overdraft : NOT Taken into account
Credit/Store Cards : NOT Taken into account
Child Maintenance : Taken into account
Child Education : NOT Taken into account
Extra
Income:-
other income - guaranteed : Add 50% to income before multiply
other income - regular : Add 50% to income before multiply
other income - irregular : No
investment income : No
mortgage subsidy : Add 100% to income before
multiply
large town allowance : Add 100% to income
before multiply
maintenance payments : Add 100% to income
before multiply
non contributory pension : No
car allowance : Add 100% to income before multiply
To
find out more about 100 Percent Mortgage
, simply complete either the Callback
Request form or the Mortgage
Quote form to receive details of the best 100 percent
mortgage to suit your individual circumstances. Alternatively
call 0800 801079 to speak
to a mortgage advisor.
100
Percent mortgage
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