Can I get a mortgage without a deposit?

If you are struggling to get over the hurdle of saving enough deposit to buy because you are in a rental property and you want to purchase your own home, you may be able to with a 100% mortgage product. You will need to meet certain requirements and be financially stable - no missed payments on debts or credit commitments in the last six months, and you must be able to show you’ve paid rent for 12 months consecutively in the last 18 months.

What is a 100% mortgage?

Also known as a “track record mortgage” or a “no deposit mortgage”, this product is a 100% loan-to-value (LTV) mortgage where the borrow does not need to provide a lump sum of money as a deposit. This means the lender will provide the full amount of the loan up front to purchase the house.

Who can apply?

  • You haven't owned a property in the UK in the last three years
  • You are 21+
  • You haven't missed any payments on debts or credit commitments in the last six months
  • You want to borrow up to £600,000
  • You aren't looking to buy a new build flat
  • You are not looking to purchase a property in Northern Ireland.

Sole Applicants:

  • You've paid all rent for 12 months consecutively within the last 18 months. You may also be required to show proof of payments of household bills. 

Joint Applicants (up to four people):

  • You can prove that all rent has been paid either by one applicant or together for 12 months consecutively, within the last 18 months
  • If you've been renting separately, you can prove that you have paid all your rent
  • You may be required to show proof of payments of household bills.

Pros and cons

As with any product where you are borrowing a large sum of money there are going to be pros and cons. The biggest pro is that there is zero deposit required to enable you to get on the property ladder. Because of the high risk to the lender, the cons include a tougher eligibility criteria and limited availability as there are only a few lenders that offer this product meaning fewer options available.

 

Tips to increase your chances of getting a 100% mortgage

 

  1. 1)     Check your credit score

    A good credit score can help secure this type of mortgage as lenders will assess this to determine your eligibility

    2)     Put some money away for costs
    You may not need to have money up front for the deposit, but there will be other costs associated with the mortgage such as legal costs, stamp duty and valuation fees

    3)     Speak to an Independent Mortgage Advisor
    Our skilled independent mortgage experts at Mortgage Required have access to the whole mortgage market and can guide you through the best option for you, and help you through the buying process.

If you have any questions about 100% mortgages, or would like to discuss another product, please give our team a call on 01628 507477.

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