How to get a mortgage with no deposit.

If you want to get a mortgage with no deposit then you're probably looking for the elusive "100% mortgage" product. There are actually a lot of these products out there, but the reason we cal them 'elusive' is simply because they're difficult to get.

Now more than ever first time buyers don't have a large enough deposit to put down on a home. Many buyers don't have any kind of deposit at all, so they opt for 100% mortgages, or something similar.

However, the criteria to get a mortgage with no deposit varies from different lenders but could leave you back where you started anyway. In general, most lenders will request:

  • A perfect or good credit score. If you have bad credit you may not be able to get a mortgage with no deposit, despite what people have told you. Opt for professional regulated financial advice if you have adverse credit but want a mortgage with no deposit.
  • A traceable history of residential homes in the past 3 years.
  • Applicants are in employment and earning a respectable amount, or three years accounts if you're self-employed.

If you're not sure whether you meet the criteria to get a mortgage with no deposit you should speak to an independent financial advisor; avoid speaking with mortgage providers direct as they won't give you the full market option and will instead recommend their own products they may not be suitable.

However, you should try to avoid a 100% mortgage if you can't find the money for a deposit because you finances are tight.

  • When you get a mortgage without a deposit you'll paying back monthly payments for the whole value of the home; with other mortgages, the deposit takes a considerable sum off the loan value and allows you to make less payments. If money is tight then don't opt for a 100% mortgage as this can be more expensive.
  • Up to 95% of the property is secured as a loan, the rest is an unsecured loan, with the same interest rate as the mortgage itself. So, in actual fact, you're paying pack more than 100% of the property's value, sometimes nearly 125%.
  • Interest rates for 100% mortgages are not competitive compared to other providers.

If you really want to get a mortgage with no deposit you should speak to a financial advisor first and consider all market options, including 80% mortgages and other products which could help your situation.

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