Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Mortgage Glossary
- Mortgage Glossary Choices:
- 100% mortgage
- Arrears
- Buy to let
- County Court Judgements
- Defaults
- First time buyer
- Flexible mortgages
- Individual Voluntary Arrangements
- Keyworker mortgages
- Let to buy
- Non status
- No deposit mortgage
- No proof of income
- Self build
- Self certification
- Self employed mortgage
- Underpayment
No deposit mortgage
These days you don't need a deposit to get a mortgage.
An 100% mortgage is usually granted to first time buyers and this attraction is obvious. When house prices increase, the amount of money you need to make a 10% deposit also increases.
This type of mortgage can also be considered if you have outstanding debts. However, you should be aware that this action could result in you paying more over the total term of the mortgage in interest (as the original loan term may be increased to fit in with the mortgage).
Please also note the following disadvantages:
• There is a greater potential for negative equity, if the value of the property falls below the amount still owed to the mortgage lender. Negative equity may make it difficult to sell the home.
• It is very likely that the borrower will have to pay a higher lending charge.
• This type of mortgage will cost more than a 90% mortgage as the borrower will be charged a higher interest rate.
In many cases the amount required for a deposit is increasing faster than people can save. Therefore a 100% mortgage gives you a chance to break out of this spiral.
- There is a greater potential for negative equity, if the value of the property falls below the amount still owed to the mortgage lender. Negative equity may make it difficult to sell the home.
- It is very likely that the borrower will have to pay a higher lending charge.
- this type of mortgage will cost more that a 90% mortgage as the borrower will be charged a higher interest rate.