Prior to the 2008 financial crash, 100% mortgages were common place for securing finance on a single asset. However, they became too risky for banks because if the market dipped, the borrower would be in negative equity and unable to repay the loan.
Now there are a number of ways to secure a 100% mortgage, for example by offering a second asset as security on the loan.
The main reason people want a 100% mortgage is because it enables them to purchase a home, without saving a deposit. Although the traditional 100% mortgage was deemed too risky in the current market, there are still ways to go about it if you are willing to offer other assets as security.
For parents who wish to help their children onto the ladder, some lenders will accept a parents’ property as security on the child’s mortgage, meaning the parent doesn’t need to dip into their savings to provide a deposit.
Some lenders will also allow a borrower to use their savings or existing property as security. They can be ideal for helping those who have fallen into negative equity – as a result of property prices falling – who might otherwise be ‘mortgage prisoners’ in properties which no longer suit their lifestyle or on a high interest rate.
We are often approached by homeowners who currently own a property with a mortgage and are looking to purchase a new residence for their family. More often than not, this is an upgrade to their current home to accommodate their growing family, or to help their children on to the property ladder.
Thanks to our vast number of relationships with lenders – private and high street banks, and private and institutional investors – we have the connections to be able to assist clients with these types of mortgages.
We understand no case is the same and are committed to spending the time to understand each one, sourcing the most beneficial solution for each.