is it possible to get a 100% mortagage as a first time buyer?

Question

If so, are there any disadvantages to this?

Answer 1

Yes, it is

Watch out for high interest rates and/or points on your mortgage. Avoid adjustable rate mortgages & balloon payments too.

Look into first time home buyer programs, ask your broker or check out your states website, or HUDs website (hud.gov). You may find programs that will help you with closing costs and low interest rates, and only a small percentage down (like 3%) rather than getting a 100% mortgage.

Good luck!

Answer 2

You can get a mortgage up to 125% through Northern Rock's Together Product. If you want to buy a house which is worth £100,000; Northern Rock will lend you up to 95,000 in the form of a secured loan and up to 25,000 in the form of an unsecured loan at mortgage rate. In this example, to get a 100% mortgage - you'd simply request 5,000 from the unsecured facility. Northern Rock will also lend high multiples of your income.

Natwest also do a 100% mortgage, as do other lenders. Natwest also lend high multiples of salary.

Some lenders will charge you a higher interest rate and/or an insurance premium designed to protect the lender should you default.

The advantages of 100% mortgage:

1. You can jump straight on the property ladder without a deposit.
2. When property prices are rising quickly, you can act quickly - sometimes, property might go up quicker than you saving a deposit.
3. As you've got nothing to sell, your offer will be very attractive to a seller (providing you've got a mortgage decision in principle) - as there would be no chain.

The disadavantages of 100% mortgage:

1. If property falls in value, you'll be the first one in negative equity.
2. Higher interest rate and/or special insurance premiums.
3. Difficult to move for a period of time, unless your property goes up in value.

One obstacle you may encounter is when it comes to exchanging contracts on a property. The seller will normally require a 5-10% deposit, especially if they are buying a property themselves. Your mortgage won't release any funds until completion. If the seller is top of the chain, and not buying anywhere - then they may accept a far lesser deposit, especially if they want to move quickly. Otherwise, you may have to get a bridging loan, or a deposit guarantee scheme (an insurance product which your solicitor may be able to arrange).

Answer 3

Yes, it is possible for a first time buyer However, you will need to research and discuss with several mortgage lender companies and brokers in order to find the best interest rate. IF you are looking for a 100% loan, make sure you get a fixed interest rate.

The downfall for not having the 20% downpayment, is PMI. Look below for info on PMI. Basically, you have an extra fee tacked onto your monthly payment.

"PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a large down payment".

Answer 4

Yes there are 100% financing options for first time home buyers...

You wont find them at your typical bank though..

To get 100% financing you have to work with a specialized lender.. I work with Providential Bancorp.. We are a nationwide mortgage lender geared more towards the non conforming market (low credit, 100%finance, bankruptcy's, etc.)

There are a few stipulations though that you have not indicated anything about... Do you know your credit? Are you currently employed? If so how long? Do you have 24 month rental history?

These are things that will make a big difference..

What you need to do is have a LICENSED mortgage officer take a look at your credit, and give you an analisys.. From there you will know what you qualify for, and if you can get into a house with 100% financing...

My name is Jason Fry, i am a licensed Mortgage loan officer.. I would be hapy to advise you on the best option, and assist you with purchasing your first home... Feel free to call me at 312-264-6448, or email me at [e-mail]

Also, feel free to check out my profile here..I have helped many people here both purchase a homw, and refinance existing mortgages..

Look forward to speaking with you!

Jason Fry
Licensed Mortgage Consultant
Providential Bancorp
312-264-6448

Answer 5

Ally H right, i recently went to see about a 100% and the guy told me about Northern Rock, they do have a few deals on the market. I was quoted on a 100K mortgage about £650 not including all the extras ie insurance etc. That was a fixed rate for 3 years. Find yourself an independant mortgage advisor to advise you on whats best for you as picking the wrong mortgage would be like buying the wrong house and then your stuck. Also check out your credit score before you go at experian.

Answer 6

To add to the other answers. Ask your local council as some local authorities used to offer 100% mortgages with interest rates set lower than that of other lenders. Might be worth investigating.

Good hunting!

Answer 7

Yes, you can even get 110% mortgages so you have money for a deposit. Just watch out for the interest rate though, usually be extremely high.

Answer 8

absoluteley most major bulding societies are desperate for the first time buyer. just be careful the interest rate does not climb drastically in the second year

Answer 9

i believe you can but the interest rates charged are considerably higher. There may be some additional conditions too (e.g you may be tied to that mortgage for a certain number of years)

Answer 10

Yes, it is possible. It is also possible to get low interest rates and low closing costs as well.

Check out the great free report at:
http://www.first-time-homebuyers-loans.com
and it will point you in the right direction.

Best wishes,

Greg