12th May 2023
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Many renters have set a goal to become London homeowners; a goal that's coming into sharper focus in the face of rising rental costs. However, in an economy squeezed by a cost-of-living crisis, the deposit can be too high a hurdle for many first-time buyers to clear.
That's why the news of a 100% (no deposit) mortgage is making waves across the London property industry.
What are the requirements?To get this mortgage, applicants must fulfil the following criteria:
- Aged over 21
- Current renters who have never owned a property
- Pass an affordability assessment
- Evidence of 12 months of on-time rent payments and a good credit history (This means anyone who has not paid rent in the last year - those living at home, for example - will not be eligible.)
- New build flats are not currently eligible, however new build houses and non-new build flats are eligible
- There is a maximum loan of £600,000
Affordability is typically calculated by ensuring your mortgage payment will be less than or equal to the average of your last six months of rental payments.
The trade-offThe interest rate on this mortgage is secured for 5 years at 5.49% so you will need to make sure you plan to stay in the property for that amount of time, otherwise you may face an early repayment penalty.
Get in touch with Alexander HallThe advisors at Alexander Hall can help you understand your budget and talk you through the options in a free consultation, including telling you more about the Skipton no-deposit mortgage.
If you do choose to apply for a mortgage, your Alexander Hall advisor will help you gather the right documents, assist with making and submitting the application. Then they will monitor your application through to completion, communicating with the lender, solicitors and agents, while reporting any updates back to you. This way, you can focus on the other tasks around buying your first home with peace of mind that an expert is looking after your mortgage application.
Explore your options with a free consultation
Even if you don't qualify… First-Time Buyer Guide'What's an agreement in principle?'
'When do I hire a solicitor?'
This handy guide will help you navigate buying your first home in six steps.
There are other 100% mortgages available where you don't have to prove a history of rental payments, however these will require a family guarantor. If you do have a deposit then 95% loan to value products are also available.
Launching this sort of product demonstrates that lenders have confidence in the housing market; there is a wider commitment to getting first-time buyers on the property ladder. So, talk to an advisor and prepare for your property search.
Want to see what's out there? Browse our homes on the market or register your search to be among the first to know when we list a new property.
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Foxtons Group plc published this content on 12 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2023 15:20:52 UTC.