100% mortgages
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100% mortgages
There’s a lot that goes into buying a property and though much of the process can be overwhelming, nothing creates stress quite like having to save for a deposit. After all, money doesn’t grow on trees. With house prices on the rise and the increasing cost of living showing no signs of slowing down, saving a hefty deposit is out of reach for a lot of people. But, have you considered a 100% mortgage?
Saving a deposit of 10% or 15% isn’t easy, but a low deposit mortgage takes away that burden.
At Everest Mortgages, we know the ins and outs of no deposit mortgages, and we’ll find the perfect one for you.
Get on the property ladder without a deposit
Don’t make the mistake of assuming that you need a large deposit to get on the property ladder, as that’s not always the case. With a low deposit mortgage, you can secure your dream home without having to pay much upfront at all.
How does a 100% mortgage work?
A 100% mortgage is when the lender stumps up the entire value of the property, meaning there’s no need for you to have a deposit. Unlike traditional mortgages, where you contribute a percentage of the property value in the form of a deposit, 100% mortgages allow you to buy a property using just your income and affordability.
There’s no need for you to have a deposit, which is why 100% mortgages are especially popular with first time buyers, who don’t necessarily have savings or existing property equity to use.
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4 reasons to choose a no deposit mortgage
- You Don’t Need a Deposit – The biggest (and arguably the most obvious) benefit of 100% mortgages is that you don’t need to save for a deposit. This means you can jump straight into becoming a homeowner.
- You’ll Enter the Property Market Sooner – As you don’t need a deposit, you can buy your first home sooner and start building equity immediately. There’s no need to wait around so you can save 15% of the property value.
- It’s Ideal for First Time Buyers – A number of first time buyers struggle to save large deposits at the same time as paying rent and covering living costs. But, 100% mortgages give you a chance to buy without needing a large savings pot.
- Reap the Rewards of Property Appreciation – Buying sooner means you can benefit from property prices increasing as soon as possible, rather than waiting years and potentially missing out.
What’s the catch?
There isn’t a catch, but there is a downside or two that comes with choosing a no deposit mortgage. For example, you might find yourself faced with higher monthly payments and slightly less favourable interest rates. Lenders also expect you to have a good credit score, proof of income and financial stability before they approve you.
However, for buyers who meet the lending criteria, a 100% mortgage is an effective way of getting on the property ladder as soon as possible.
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Why no deposit mortgages are great for first time buyers
Many first time buyers face a set of unique challenges; high property prices, competition from other buyers with bigger budgets, and the time it takes to save a deposit. Try as we might, we can’t do anything about house prices and property market competition, but a 100% mortgage removes one of the main barriers to ownership, by:
- Helping you to move into a property without years of waiting.
- Allowing you to start building equity sooner.
- Making you a homeowner sooner, so you avoid the increasing cost of rent.
- Ensuring you benefit from property price growth as soon as possible.
For many first time buyers, a no deposit mortgage is the fastest way to get on the property ladder, and Everest Mortgages can make that dream a reality.
Streamline the process by working with a mortgage broker
As lending criteria tends to be stricter with 100% mortgages, and there are fewer no deposit mortgage options available, it’s best to work with an experienced broker. This is where we come in.
At Everest Mortgages, we find the lenders most likely to approve your application and we compare deals to get the best interest rate. Whether you need advice on eligibility requirements, or you need someone to guide you through the process, we’re on hand to help.
By working with us, you save time and maximise your chances of being approved, without the stress that often comes with finding a mortgage.
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Zero deposit mortgages: From application to approval
The journey to getting a no deposit mortgage and buying a home might not be as complicated as you think:
- The first thing you need to do is check your credit history and ensure your credit report is accurate. You don’t want to be turned down based on incorrect information.
- Work out what you can afford and make sure your income can comfortably cover the monthly repayments. You don’t want to be scraping by each month, desperately trying to stay on top of your mortgage.
- Get all of your paperwork and documentation in order. This includes payslips, bank statements and ID, and proof of your income or trading history if you’re self-employed.
- It’s a good idea to work with a mortgage broker. We’ll give you expert advice on the best lenders for 100% mortgages and their criteria, and we’ll find the best one for you.
- You’ll need to get a mortgage agreement in principle, which shows sellers you’re financially ready and serious about buying.
- Submit a full application to purchase your chosen home, and make sure to include all required documentation and details about the property.
- The lender will confirm the property value and complete the legal side of things.
- You’ll then receive a mortgage offer, exchange contracts and prepare to move into your new home.
Frequently asked questions
Do I need a guarantor for a 100% mortgage?
Not always. Though some lenders do require a guarantor, depending on your circumstances, many offer no deposit mortgages without one.
Can I get a 100% mortgage and remortgage later?
Yes, of course. Once you’ve built equity, you can usually remortgage to access lower interest rates.
Are 100% mortgages riskier as a buyer?
100% mortgages can be more financially demanding because repayments and interest rates tend to be higher. But, as long as you keep up with the payments, there aren’t any additional risks of having a no deposit mortgage.
Is it better to have a deposit?
Though having a deposit can bring monthly repayments and interest rates down, a no deposit mortgage helps you to get on the property ladder soon.
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