A 100% mortgage is where the mortgage lender lends you the full amount that the property costs. (So if the house costs £100,000 you borrow £100,000).

In other words you don’t have to put any money down

Usually you’d only get a loan to value mortgage between 75% to 95% (eg if the house cost £100,000 a 75% mortgage means you would borrow £75,000).

 

The problems with getting a 100% mortgage are:

 

• It will probably cost you a lot more than necessary – you’ll be charged a higher interest rate.
• You may get tied in – which you want to avoid.
• You’ll be relying on property prices continuing to rise. If they fall you’ll be in a right old pickle called negative equity.
• You’ll very likely have to pay a mortgage indemnity guarantee policy. This is only good for the lender and doesn’t help you.

 

However if, like many, you don’t have enough spare cash and a 100% mortgage is your only realistic option, the good news is that there are some reasonable deals out there.

You’ve got to shop around to find one. This may be a drag but shouldn’t be as difficult if you use an expert see ways to find your mortgage.

Read about Mortgages over 100% LTV

 

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