100% mortgages makes a comeback to the UK Marketplace ....
Mortgages that cover the entire cost of a home loan return - Few! say most first
time buyers.
Three years after being dumped in the credit crunch, the first UK bank is bringing
back the mortgage that allow's first-time buyers to get on the housing ladder without
saving a penny.
These 100 per cent mortgages were quickly phased out after many lenders were criticised for making inappropriate loans for people that just couldn't afford! - This move caused major problems for young people who had relied on them to buy without having a deposit. And it forced the masses to rent at a time when the cost of tenancies has reached an all-time high.
Yesterday September 6th 2011 - Aldermore said it will become the first bank since 2008 to offer a ‘deposit-free’ deal… The new financial arm was set up mid 2009 and they promise ‘a fresh perspective’ on mortgages. If successful, its pilot scheme launched this week could be copied by rivals, in a very short space of time. But the offer comes with a significant catch - Buyers need generous families ready to put their own home on the line to help their offspring.
For, if disaster strikes, and the home is repossessed, the guarantors also face losing the roof over their heads.
The managing director - Charles Haresnape (Aldermore) said: ‘First-time buyers have become disenfranchised from the housing market because of the large deposit demanded by most lenders.
‘This is the single biggest issue facing first-time buyers. It needs to be addressed head on if the UK’s housing market is to have a chance of recovery.’
Young buyers can borrow up to 100 per cent of the property’s value, with a maximum loan of £250,000, without a deposit. But their parents have to guarantee up to 25 per cent of the property’s value by putting up the family home as collateral. Step-parents, grandparents and legal guardians can also act as guarantors if they are ready to take the risk. If the child ends up facing repossession, the parents would have to sell their home or find another way of paying the debt.
