What are 100% Mortgages?

Hot Topics

Will I Have To Pay An Arrangement Fee And How Much Will It Be?: The Arrangement Fee is also known as an Administration or Application fee and it’s designed to cover your lender's administrative costs for setting up the mortgage.
Do I Need a Guarantor?: If your lender is concerned about your ability to meet your mortgage commitments, they may ask you to provide a Guarantor.
Where Can I Buy a Mortgage?: Many, but not all financial services companies offer mortgages. If you are looking for a mortgage the traditional approach is to speak to you bank or a building society. However, you are most likely to find the cheapest deals by speaking to a Mortgage Broker.
What Are Redemption Penalties?: Redemption penalties are your lender’s way of getting extra money out of you when you decide to cancel your mortgage agreement early.
Equity Release: Equity Release is a means of using the value of your home to receive either a lump sum of cash or regular monthly instalments.

Most mortgage lenders will only offer a 90% loan to value, that means that they will only loan you 90% of the properties value. First time buyers find this particularly problematic because they need to save up there 10% of the properties value before they can complete on their mortgage.

However, many lenders have available a 100% mortgage, this means that they will allow a 100% loan to value i.e. The lender will loan you the full purchase value of the property. 100% mortgages are particularly popular with first time buyers because they don’t need to save up 10% of the properties purchase price

Even though 100% mortgages have advantages, there are also some serious disadvantages you need to be aware of before taking out a 100% mortgage.

Negative equity

Negative equity is when the value of your home is less than the value of the outstanding borrowing on your mortgage. 100% mortgages are particularly in danger because if house prices fell you would immediately fall into negative equity. Mortgages with a lower loan to value have a smaller chance of falling into negative equity because you have only borrowed some of the properties value.

High Interest Rate

In order to secure your 100% mortgage you may have to pay an above-average interest rate. With 100% mortgages the lender is at much greater risk of losing their money in the event of a house prices crash, by offering a higher interest rate the lender can protect themselves against the increased risk.

Mortgage Indemnity Guarantee

A mortgage indemnity guarantee is an insurance policy which insures the lender against the properties loss of value. Mortgage Indemnity Guarantees can add several thousands of pounds to your mortgage loan.

Uk 100% mortgage quotes

Do i need a guarantor ?

1st Time Buyer - Buy to Let Mortgages - Capped Rate Mortgages - Discount Mortgages - Fixed Rate Mortgages - Flexible Mortgages - ISA Mortgages - Low Setup Cost Mortgages - Self Cert Mortgages - Tracker Mortgages - 100% Mortgages Cashback Mortgages - Adverse Credit - Buy to Let - Commercial Mortgages - Company Directors - Equity Release - Fixed Rate Mortgages - Income Multiples - Interest Rates Explained - Mortgage Glossary - Mortgage Variations - Mortgages Explained - Previously Declined - Refinance Mortgages - Repaying Mortgages - Right to Buy Mortgages - Self Employed - Unusual Properties - Variable Rate Mortgages

-- Please Note --
This web site is owned by Andromeda Webs Ltd. Andromeda Webs Ltd, is an Appointed Representative of Web Publishing House Ltd. Web Publishing House Ltd is authorised and regulated by the Financial Services Authority for insurance mediation.