A 100% mortgage is where the mortgage lender lends you the full amount that the property costs. (So if the house costs £100,000 you borrow £100,000).
In other words you don’t have to put any money down
Usually you’d only get a loan to value mortgage between 75% to 95% (eg if the house cost £100,000 a 75% mortgage means you would borrow £75,000).
The problems with getting a 100% mortgage are:
- It will probably cost you a lot more than necessary – you’ll be charged a higher interest rate.
- You may get tied in – which you want to avoid.
- You’ll be relying on property prices continuing to rise. If they fall you’ll be in a right old pickle called negative equity.
- You’ll very likely have to pay a mortgage indemnity guarantee policy. This is only good for the lender and doesn’t help you.
However if, like many, you don’t have enough spare cash and a 100% mortgage is your only realistic option, the good news is that there are some reasonable deals out there.
You’ve got to shop around to find one. This may be a drag but shouldn’t be as difficult if you use an expert see ways to find your mortgage.
Read about Mortgages over 100% LTV
- Intro / What You’re Getting Into
- Process / Flow Chart Of What Happens
- Buying Your First Home
- Be Careful Out There
- Don’t Just Grab The First Mortgage You Can
- Problem: Having Enough Money
- Guarantor Mortgages
- 100% Mortgages For First Time Buyers
- Should I Borrow Five Times My Income?
- Having Problems As A First Time Buyer? Read Some Solutions
- UK Government Help, Homebuy And Key Workers Schemes