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100% mortgages are back for first time buyers! Plus, the return of Help to Buy?

Updated: Aug 9, 2023

One of the biggest hurdles for first time buyers is saving up the big deposit needed to buy your dream place.

If you’ve moved into rented property, building up those funds can be tough, even for a 5% deposit mortgage.

And with increasing gas, electric, petrol and food prices – not to mention unexpected costs like car repairs – many with money in the bank have had to dip into it to keep them afloat.

Good news has been announced though! It seems as if lenders have been listening to the needs of a generation stuck in the renting cycle, and a brand new 100% mortgage has been launched.

To find out if you're eligible to apply, and how much you could potentially borrow, give us a call on 01934 204841 or click here.

Read on for more, and to find out about the government’s potential plans to revive the Help to Buy scheme, giving first time buyers a helping hand onto the property ladder again.

What is a 100% mortgage?

100% refers to the amount of money you’ll borrow in relation to the property price. A 90% mortgage would mean putting down a 10% deposit, and in the last couple of years 95% mortgages have become available too, with a 5% deposit.

But, on a £200,000 property, a 5% deposit would still be £10,000, which can be hard to save if you don’t have a lot of disposable income.

So for those who don’t, the option of borrowing 100% of the property price and paying no deposit is the perfect way to buy your first home!

How can I get a deposit-free mortgage?

Contact your local Beewise mortgage advisor! We’re experts at helping first time buyers move from renting to buying, and can let you know if you’re eligible.

We’ll chat through your current situation, calculate how much you could borrow, and let you know what mortgage deals and schemes are available to you.

Plus, Beewise advise on other costs involved in buying a home, such as future monthly payments, solicitors fees and surveys. And we’re on hand up until you get your keys to guide your through your homebuying journey!

Buying your first place can be intimidating, so we’re here to make it as stress-free as possible, as well as saving you time and money. Click here to read more on why you should use a mortgage advisor, and here for our essential guide for first time buyers.

Are 100% mortgages here to stay?

It’s hard to say for sure. Often when one lender brings out a new product, others follow, so we’d like to think this positive change in the mortgage market is here to stay.

15 years ago, 100% loan-to-value mortgages were readily available to first time buyers, and you could even borrow 110% of the value of your new home, giving you extra money in the bank for furnishing your home and renovations.

Following the financial crash in 2008 though, lenders saw these levels of borrowing as too high-risk, and dramatically reduced the maximum percentage they’d loan against a property’s value.

Even the reintroduction of 5% deposit mortgages is relatively new. But, it shows banks and building societies are becoming more optimistic about the UK property market.

However, there’s no guarantee deposit-free mortgage options will be around permanently, so get in touch with your local Beewise advisor today and take advantage while you can!

Do you have to rent to qualify for deposit-free mortgage?

At the moment, having a 12 month history of renting is one of the conditions for a 100% mortgage. This might seem unfair if you live with family, friends or similar, but banks and building societies are still cautious about offering deposit-free mortgages.

By showing you have a history of paying rent and bills on time, a lender can be confident you’d also pay similar monthly mortgage payments with no issues.

If you’re not renting, there could still be options to get on the property ladder though! From having a guarantor to adding a family member onto the mortgage, Beewise can advise on what’s available now, or give you ways to work towards your goals.

Tell us more about the return of the Help to Buy scheme!

The government’s Help to Buy scheme was hugely popular when it first launched, allowing first time buyers to put down 5% deposit and receive a loan for up to 20% of the property price.

So, your first mortgage could have been just for the remaining 75%, giving you lower monthly payments and the opportunity to buy at a higher property price than a standard 95% mortgage.

Since it closed to new applicants in October 2022, there have been other schemes put forward by new build developments, but none as popular as Help to Buy.

However, reports in national newspapers at the start of May suggested Prime Minister Rishi Sunak will be proposing a scheme to get more people onto the housing ladder.

While there’s been lots of speculation around this, sources have suggested this Help to Buy replacement scheme would be for both new-build homes and existing ones, giving first time buyers even more options than before.

What is the right option for me?

Without going through your individual situation, it’s hard to say for sure, but as award-winning mortgage advisors you can trust Beewise will give you the most suitable advice!

As well as working out how much you can borrow, any other costs involved, and potential monthly payments, we’re experts on the mortgage market so will go through the pros and cons of any schemes available.

It’s important to take your current and future circumstances into account too. A mortgage is a big commitment, so we’ll always talk through your options to make sure your homebuying choice is right for you.

Where can I find out about the new Help to Buy scheme?

There isn’t any information available yet, but your local Beewise mortgage expert will know as soon as it is!

It’s thought the new proposal will be announced in the Chancellor’s Autumn Statement. But, if you get in touch now we’ll calculate your current homebuying position, then be ready to advise on anything that comes up.

Or, follow our Facebook and Instagram pages to stay updated with all the latest mortgage news, and for more helpful tips and advice for getting on the property ladder.

To discuss 100% mortgages further, or to find out how much you could borrow towards your first home, call 01934 204 841 or email your local Beewise mortgage advisor.

We offer evening and weekend appointments, and were voted Best Mortgage Office in the UK 2022, so you’re guaranteed expert advice with Beewise FS Ltd.

And, check out our 220+ 5 star Google reviews for even more recommendations from our happy homebuyers!

Please be aware your home may be repossessed if you do not keep up repayments on your mortgage.

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