First Time Buyer Mortgage with No Deposit

First Time Buyer Mortgage with No Deposit: A

 Guide to Making Your Dream Home a Reality

First Time Buyer Mortgage with No Deposit

Introduction

Owning a house is a fantasy that many try to accomplish. For first-time Buyers, the possibility of setting something aside for a heavy store can be overwhelming and may appear to be an outlandish test. Be that as it may, there are choices accessible for the individuals who wish to get on the property stepping stool without a critical forthright deposit. In this article, we will investigate the idea of first-time Buyer Mortgage with no deposit, the public authority conspires that help this drive, and how you can transform your homeownership dreams into the real world.  
               

Understanding First-Time Buyer Mortgages

I want to discuss about the brand new product that's just come out which is the first time buyer mortgage which will lend up to a hundred percent of the property value on paper it sounds like a great product so if you're well this really works is if you're currently renting they will take the references from your rent but they'll lend up to 100 now that's something we haven't seen for many many years so you don't need to deposit you don't need any cash but let's just talk very quickly about some of the pros and cons of this product before we get too excited. To say you don't need any cash well you probably will because you're still going to have solicitors fees and things like that but it's not going to be significant but you should bear in mind a few important features firstly the mortgage repayment that you get must be less than or equal to your the average rent that you've been paying so the Lend is going to look to make sure that you can afford this new mortgage based on their normal affordability checks but also looking at what you've paid in the past.

Things to bear in mind 

You're on a low rent now or you're living at home this isn't going to work for you they're going to look at what you're paying now in rent and what you'll be paying on the new mortgage another thing to bear in mind is because you're going to between 95 and 100 loan to value Which is higher than a lender will currently do the rate's going to be a bit higher so expect to pay roughly 0. 5 more than you might on a northern ordinary mortgage so again that means that repayments are higher which means affordability is tighter so that comes in at a risk the lens is going to insist that you have a really good credit score that's really important you're going to have to have an A1 rent reference for the last 12 months not missed a payment and uh they'll they will work over a long longer term to help make the affordability fit so they will do the mortgage over a longer term than some mortgages but they've got the normal affordability calculations that they'll have to carry out so it could work for you if you are paying a high rent at the moment and possibly higher than higher than you might be looking to higher rent payments than the mortgage repayments might be on the proposed mortgage so that could work for you quite well and you've got a really clean reference but there's some other things to bear in mind and I think these are important firstly if you're borrowing to 100 loan to value then it doesn't take much for you to drop a negative equity so if you look at property prices at the moment are they going to go are they going to go down who knows but it doesn't take much for you to drop into negative equity now why is that important well is if you go in thinking that everything's going to be fine then uh you might not consider it a concern I. E well eventually properties will go up so we're on the property Market and it'll be all right because we will climb out of a negative equity situation but if you're in a situation where you're not on an uphill trajectory in terms of your income and things like that and affordability comes becomes a little bit tight let's say I don't know you're a couple and one partner one party is ill or something like that and your income reduces if you're negative equity you're in a position where you can't actually sell the property because you can't afford from the sale proceeds to pay off the existing mortgage think about new builds sometimes new builds are a good idea uh in a rapidly rising market but sometimes people pay over the odds for new bills because they want a brand new shiny property so if you're looking at new build and it's lovely and shine and you love it might not be worth what it was what you paid for it in two years time or a year's time if you have to get out if you have to sell it because it's no longer shining brand new so it depends on the market new bills can be a bit of a risky area so negative.

Negative equity 

Equity can lock you into your existing property and mortgage and if you can't get out and you're in the stressed position then you could end up let's face it you could end up with the lender saying right well you can't afford to pay the mortgage payments any longer we are going to take proceedings against you we might even repossess but if but the bare minimum is that potentially you're going to have missed mortgage payments or low mortgage payments that's going to affect your credit score and you're into a downhill spiral so you need to watch out for negative equity if I think in your personal circumstances if you're thinking right well we might have some Rising costs going forward which could put me under pressure I'm going right to the maximum of my affordability so I'm really stretching myself you're buying a property which could drop in value this is a really risky product so just be very careful with it if you're on an uphill trajectory you've got plenty of spare income and affordability then that's a different matter it could work quite well for you get you on the property lader now which is quite an important thing so if you do go for this sort of mortgages with the Skipton by the way Skipton Building Society if you do go for this uh this type of mortgage expect your application to be scrutinized uh go in with your eyes open make sure you run an appeal trajectory be confident in the property that you're buying that it's not going to drop in value which drops you into negative equity uh so don't overpay but on balance it's going to be a good product for some people it's going to be a tempting product for a lot of people but I think you really need to get advice on it so talk to a mortgage advisor and tell them your circumstances and there's a strong chance certainly if you came to us for some customers I'm sorry but we'd probably say to you know what yes you can probably get this mortgage but is it a good idea in your circumstances it's high risk so that's what we might be telling you anyway I hope you found that useful Information.


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