100% & 95% mortgages, & Interest Only
Low Deposit & Interest Only
100% mortgages are available, but with strings attached. It is a guarantor mortgage, and in addition to your own property as security, 25% of the loan will also be secured against your parent’s property. The loan is assessed against your own income, and also against your parent’s income when considering affordability, and you must have a good credit record. Therefore this type of mortgage may not suit everyone.
95% mortgages are more commonly available, but again, lenders will look for a good credit record, and have strict criteria when it comes to accepting this level of borrowing. For example, the amount available for new build properties may be less than 95%. However, for new builds, with the Help to Buy Equity Loan Scheme, a 75% mortgage is all that is needed, with 20% coming from the government, and 5% by way of deposit. With this arrangement, the government own up to a 20% stake, which they will reclaim when the property is sold. These schemes are intended to help those onto the property ladder, who might not otherwise be able to achieve it on their own, and are subject to eligibility for both the scheme, and the mortgage.
Negative equity is more of a danger with higher levels of borrowing, because if property values fall, you could end up owing more than your property is worth. This can result in you becoming a “mortgage prisoner”, because it would not be possible to re-mortgage to another lender, or sell the property, unless you had savings you could put into it to reduce the loan amount.
Interest only mortgages are still available, but if you are only paying interest to the lender, it means that you must have some other means of repaying the capital at the end of the mortgage term. Some lenders will accept sale of your property or sale of a second property as a means of repaying the loan, or they may accept some form of savings plan. However, rules are much tighter than they used to be, and only lower loan to value loans are generally considered, and where there is a large amount of equity remaining in the property.
We can advise on the most suitable mortgage arrangement for you, the best lender and deal, and also point out all the issues you need to be aware of.
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As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
Think carefully before securing other debts against your home. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
For mortgages there will be a fee of usually £100, and we will also receive a payment from the lender.
For Commercial Loans we act as introducers only. The FCA does not regulate Commercial Loans.
The FCA does not regulate loans and some forms of Buy to let mortgages