100% Mortgage
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A mortgage is a contract between the lender and the borrower. It allows people to buy property (residential or commercial), without paying the complete money upfront. The payment is made over a period of time in installments. The payments are blended payments comprising principal and interest and are usually monthly.
When approving your mortgage, the lender expects you to make a down payment, which is usually 10% of the value of the property. However, if you are planning to shift residence or re-mortgage or buy the house but lack the money for deposit, you can opt for 100% mortgage or ‘no deposit’ mortgage. For re-mortgaging or shifting residence you can get 105% of the value of the house and for buying the new house, you can get 102%.
The good thing about 100% mortgages is that you not only get the entire value of the property but also the expenses incurred in buying the property. This ensures that you are stress free during the critical period of buying new property. It also ensures that you need not bear any expense while buying your dream home. Anybody except the self employed, having at least 3 years of work experience, of which 3 months should be with the present employer, can apply for this loan. This it is relatively simple for you to obtain loan through 100% mortgages. The self employed need not think that they are at any disadvantage. They can avail self-employed mortgages that specifically suit their needs and demands.
The minimum age for applying for 100% mortgage is 21 years and the maximum age is 70 years. The mortgage comes with various options: repayment, endowment plans and pension-linked/PEP/ISA. The maximum tenure for repayment option is 35 years, for endowment plan it is 45 years and for pension-linked/PEP/ISA it is 45 years. If you are applying singly, you can get 3.75 times your annual salary and if you are applying jointly, you are eligible for 2.75 times the total of the annual salary of each applicant.
There are no higher lending charges even if you take 105% of the property value. You can pay any amount you like and if needed, take payment breaks. The documents to be submitted for 100% mortgage are bank statements and salary slips of the last three months and 12 months’ mortgage statements or references from tenants. Even if any of these documents are missing, certain lenders will accept the bank statements.
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