100% Mortgages :
Finding the right 100% (one hundred percent) mortgage deal

The 100% mortgage has become somewhat sought after amongst the first time buyer community, as a means of affording to purchase a home.

Typically, you borrow between 75% to 95% of the property’s value from your mortgage lender. However, many first time buyers struggle to raise a deposit for the remaining amount. During the time it can take to save for a deposit, which given today’s prices is no mean feat, prices may have risen further making the situation even more impossible. When first time buyers don’t buy, the entire marketplace is effected. Thus mortgage lenders attempt to offer a solution with 100% mortgages.

With 100% mortgages, rather than raising a deposit, you borrow the full amount from the lender, ie. 100% of the property value. The previously impossible purchase now becomes achievable.

However, it would be unwise to enter into a 100% mortgage agreement without first considering the whole picture. There are a few pitfalls to consider:

1) You may be charged a higher interest rate for a
1) 100% mortgage, meaning that you will be paying
1) more each month than you would with a traditional 1) mortgage

2) If paying a higher interest rate, you may wish to bail 1) out and switch to a cheaper mortgage. However, you 1) may find with a 100% mortgage that you are tied in 1) by early repayment charges

3)It’s quite likely that you will have to pay the
1) mortgage lender a higher lending charge at the
1) outset. This is a one off charge paid to protect the
1) mortgage lender, not you, from the risk involved in 1) lending you the full property value

4) Which brings us to negative equity, a term meaning 1) that you owe more than the property is worth -
1) which could occur if house prices took a downturn. 1) Negative equity can result in losing your home.

These pitfalls are not listed in order to deter, but to increase awareness. 100% mortgages provide a viable means of buying a home - and for many borrowers are the only real option of doing so – and there are some credible deals to be found on the market.

100% mortgages highlight the benefits to be gained by consulting a reputable mortgage broker. A broker can not only seek out those hard to find deals, but if you are in any doubt about whether a 100% mortgage is for you, or about the details of a specific deal, then a mortgage broker can advise you.
A broker like CFS Mortgages can offer you expert advice – at a time when your finances will appreciate being kept to a minimum.