This could be good news for those renting who wish to buy their first home in Bolton or Bury.
Mortgage lenders are expected to start offering 100% mortgages for the first time since 2008. This is a loan used for the purchase of property in which no deposit is put down by the buyer and all the purchase funds are provided by a mortgage lender, often a bank or building society.
It looks like Skipton Building Society are going to be the first movers in the market place, to launch the loan which is thought to be specifically for first time buyers who do not have deposit savings. Other lenders may soon follow so there could be a wider choice as we progress through 2023.
The aim of a 100% mortgage is to help more people be able to get a foot on the property ladder.
Although precise details are yet to be announced, it is expected that the interest rate would be fixed for a period of two years. Importantly borrowers will almost certainly be required to demonstrate a history of paying rent at a similar level to a mortgage repayment for up to two years. It is hoped that this type of mortgage may create a way around the roadblock often faced by first-time buyers who have regularly paid rent but cannot get a mortgage due to being unable to save up for the minimum of 5% deposit required frequently needed.
Hopefully this may be a helpful solution for those wishing to buy their own property who have been in rented properties. However it must be remembered that 100% mortgages will leave borrowers at a greater risk of negative equity if the value of their home falls. Prior to the 2008 financial crash, all large lenders including Lloyds and HSBC offered no-deposit mortgages. These loans were withdrawn from the market following the crisis amid a crackdown on risky lending.
If you are thinking of pursuing a property purchase using it may be helpful to speak to an independent financial advisor, Cardwells Estate Agents Bury and Cardwells Estate Agents Bolton can introduce you to professionals who may be able to help. If we can be assistance with this or with the sale or letting of your property in Bury, our number is 01617611215, [email protected] or perhaps pop into our town centre office on Market Street. If we can help with the sale of your property in Bolton or if you are looking to move home in Bolton, call Cardwells Estate Agents Bolton on 01204381281, [email protected] or visit www.Cardwells.co.uk
