I'm looking to buy my first property, early 2008,with a 100% mortgage, is this a mistake or not. HELP?

Question

should I, or Shouldn't I, i need some good advice on the housing market.

Answer 1

According to statistics it's a buyers market and therefore a good time for you to buy and get the best deal. As an agent, I encourage my clients to buy when they find the "right" house for them. Most clients walk into a house and immediately know it's right for them. Don't put too much into statistics and the market, buy when it feels right for you. If you need a realtor in your area, let me know, I'd be happy to refer you! :) Good luck and happy house hunting!

Answer 2

You don't say where you are located, and because the answer is going to depend on the local market, then you should really go back and edit your question to include this information.

Whilst buying with a 100% mortgage is never the greatest idea, I do understand that in some situations, it's the only way you'll ever get onto the property ladder.

If you're in the UK, this is going to be a HUGE mistake in early 2008. In some parts of the country, house prices are already declining so that people with 100% mortgages now have negative equity, and this trend looks set to continue to an even greater extent. Whilst I don't think there is going to be a major decrease in prices ever, especially not in London and the South East, if you have a 100% mortgage even a drop of, say, £10,000 is enough to severely impact you.

However, don't ask me; ask the bank. If they think it's a bad idea then they simply won't give you a 100% mortgage. End of.

Answer 3

It is a buyers market and that will continue into 2008. It is a good time to buy as prices have fallen (not values). Rates should remain steady in the low to mid 6's depending on the loan program (todays 30-yr fixed is at 5.875 w/ 5% down). 100% financing may be in the upper 6's but that is still a good rate.

Take a careful look at your personal finances and be sure the mortgage payment will not break you. Get a fixed rate mortgage so your payments will remain the same. Home ownership is always better than renting - rent goes into the landlords pocket while the mortgage payment is an investment in your future (home equity).

Answer 4

The average price decline throughout 08 is expected to be around 6-7%. Some markets such as CA, FL, MI, NV are expected to be in the 20% range. You would be better advised to wait and save up for at least a 3% downpayment and go through FHA. You do realize that with 100% you will be paying PMI which can be expensive. Early 08 is when the next set of ARM's are due to reset so expect many more foreclosures, thus adding to the glut in homes. Best advice I can give is to start reading the business sections on the net to keep abreast of what is going on in the housing markets. Make your decision from there.

Answer 5

UK house prices have peaked and in many places are now on the slide. If you take out a 100% mortgage you'll risk putting yourself in negative equity and having a mortgage which is worth more than your house. That's not a good situation to be in, especially if the economy gets any worse. Prices are falling for sure, which means there are bargains to be had out there, but a 100% mortgage is a huge risk. I'm not sure many borrowers would even lend such an amount. They're really starting to tighten the screws on this sort of thing now - getting people into mortgages they can't afford - if they think it's a bad idea, they won't lend.

Answer 6

It is a positive thing to get a mortgage rather than renting, but make sure you do your sums properly first.
Allow for the fact that mortgages may rise. Even if you get a fixed rate to start with you will have to adjust for highs and lows in the rates on your later payments. Take into account council tax, insurance, energy bills, etc. Get your mortgage with an established lender.
I bought 22 years ago and have no regrets, but you must be aware that for the first few years this is where your money will go.
Don't buy because you want an investment, buy because you want a home.

Answer 7

I would wait we are heading for a recession and prices will fall...

100% mortgages may be pulled by then...the lenders are pulling products all the time..and 100% is seen as a high risk by the lender...have a plan B......

I would wait and buy someone elses repossessed property on the cheap...

We have problems that no one wants to discuss esp Brown

1. high oil prices...will be passed to higher prices elsewhere
2.banks are not lending to each other
3.the banks have been hit harder than they thought by the US subprime fiasco
4.prices are already falling in commercial property and a recession in the housing market is unaviodable
5.Fiscal policy...revenues have been lower than forecast and spending higher than forecast...

the housing market has been over valued for a while and its time for readjustment...prices have to come down there are more sellers now than buyers....

Answer 8

It's always a mistake to take on 100% mortgage. Wait for property prices to fall which they are starting to do and save your deposit.

Answer 9

It depends on the numbes and you ahve not given us enough numbers to work with to give you a decent answer.
What is your gross income, tax rate, amount of assets, job stability, family situation, location, education in this type of transaction, and what team members do you have on your team to evaluate the deal?
What is the location, condition, crime rate, schools, population growth, job growth, tax enviorment, appreciation rate for the area the property is in?
Is this property for primary residence or rental or commercial? What are your goals for the property and what research have you done to determine the short and long term affects of holding the property?
I can't give you a solid answer until you provide solid information. And anybody who gives you an answer will be wrong because they can't know everything they need to know to give a correct answer.

Answer 10

The days of 100% LTV financing are nearly history, unless you have stellar credit and a good asset portfolio to back up your request for such a loan.

As far as housing values are concerned, it's anyone's guess as to how much farther, if at all, values will fall. Too many variables sitting out there right now.