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Home / Family / No deposit, no problem: 100% first-time buyer mortgages are available right now — but there’s a catch

No deposit, no problem: 100% first-time buyer mortgages are available right now — but there’s a catch

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”They were a common feature in the residential lending market before everything went belly-up with the financial crisis: 100% loan-to-value mortgages.” data-reactid=”22″>They were a common feature in the residential lending market before everything went belly-up with the financial crisis: 100% loan-to-value mortgages.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”In fact, some lenders went over 100%, helping to cover things like fees and stamp duty, anticipating that house prices would continue to rise strongly.” data-reactid=”23″>In fact, some lenders went over 100%, helping to cover things like fees and stamp duty, anticipating that house prices would continue to rise strongly.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”That, of course, was profligate. In today’s more cautious times, 100% mortgages are no longer commonplace or as easy to secure.

” data-reactid=”24″>That, of course, was profligate. In today’s more cautious times, 100% mortgages are no longer commonplace or as easy to secure.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”But they are re-appearing in the mortgage market, albeit with significant risk-minded changes to the product terms.” data-reactid=”25″>But they are re-appearing in the mortgage market, albeit with significant risk-minded changes to the product terms.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”a href=https://uk.finance.

yahoo.com/news/five-tips-on-how-to-make-an-offer-when-buying-a-home-050000543.

htmlstrongREAD MORE: Five tips on how to make an offer when buying a home/strong/a” data-reactid=”26″>READ MORE: Five tips on how to make an offer when buying a home

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”In January 2019, Lloyds Bank unveiled its new 100% mortgage product for first-time buyers called “Lend a Hand.”” data-reactid=”27″>In January 2019, Lloyds Bank unveiled its new 100% mortgage product for first-time buyers called “Lend a Hand.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”It’s a three-year 2.99% fixed-rate product with a maximum term of 30 years and a top property value of £500,000.

There’s also £300 cashback.” data-reactid=”28″>It’s a three-year 2.

99% fixed-rate product with a maximum term of 30 years and a top property value of £500,000. There’s also £300 cashback.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”However, here’s the all-important catch: A member of the applicant’s family will have to secure the mortgage by depositing 10% of the property’s value in a Lloyd’s savings account, which comes with a guaranteed 2.5% interest rate for three years.

” data-reactid=”29″>However, here’s the all-important catch: A member of the applicant’s family will have to secure the mortgage by depositing 10% of the property’s value in a Lloyd’s savings account, which comes with a guaranteed 2.5% interest rate for three years.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”This deal is intended to make it easier for families to use their savings in support of relatives who are first-time buyers because they are not locking the cash up in the equity of a property.” data-reactid=”30″>This deal is intended to make it easier for families to use their savings in support of relatives who are first-time buyers because they are not locking the cash up in the equity of a property.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Barclays has a similar product called the Family Springboard Mortgage.” data-reactid=”31″>Barclays has a similar product called the Family Springboard Mortgage.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”This offers 100% loan-to-value with a three-year fixed rate of 2.95% if a family member or other helper secures the borrowing with a 10% sum held in a Helpful Start account, which carries a savings rate of 2.

25%.” data-reactid=”32″>This offers 100% loan-to-value with a three-year fixed rate of 2.

95% if a family member or other helper secures the borrowing with a 10% sum held in a Helpful Start account, which carries a savings rate of 2.25%.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”a href=https://uk.finance.

yahoo.com/news/uk-property-how-to-make-money-from-from-your-home-without-selling-up-050000884.

htmlstrongREAD MORE: UK property: five lucrative ways to make money from your home without selling up/strong/a” data-reactid=”33″>READ MORE: UK property: five lucrative ways to make money from your home without selling up

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”The Post Office also has a five-year fixed-rate “Family Link Assistor” product which offers 100% of the lending needed to buy a home up to a top value of £500,000.” data-reactid=”34″>The Post Office also has a five-year fixed-rate “Family Link Assistor” product which offers 100% of the lending needed to buy a home up to a top value of £500,000.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”This product is structured so that 90% of the lending is to the first-time buyer, and the remaining 10% is a second interest-free mortgage secured against the home of an assistor, such as a parent or grandparent. That home must be mortgage-free, however.

” data-reactid=”35″>This product is structured so that 90% of the lending is to the first-time buyer, and the remaining 10% is a second interest-free mortgage secured against the home of an assistor, such as a parent or grandparent. That home must be mortgage-free, however.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”For the first five years, you will make two payments. The first will be on the 90% portion, which carries a 3.

89% interest rate. The second payment will be zero interest and on the remaining 10%.

” data-reactid=”36″>For the first five years, you will make two payments. The first will be on the 90% portion, which carries a 3.

89% interest rate. The second payment will be zero interest and on the remaining 10%.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”With these products and a handful of others in the market, it is possible for first-time buyers to step onto the property ladder without a deposit — but they’ll still need help from family or friends to do it.” data-reactid=”37″>With these products and a handful of others in the market, it is possible for first-time buyers to step onto the property ladder without a deposit — but they’ll still need help from family or friends to do it.

.