If you do not have saving and yet want to buy a small flat, what would be the best way forward ? is 100% loan difficult to get ?
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And if you do get it would it not be the most friendly mortgage rate ? pls advice
Aarav08
1 year ago
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
100% loans are not just difficult - they are impossible, I'm afraid. So you will need a deposit of at least 10% of the purchase price, though with a (relatively!) small deposit, you will not get the best (ie cheapest, with good features) products.
It really is not easy for the first-time buyer, nowadays. Some people take a gift from parents, who may have savings or who may be able to increase their own mortgage a little, or who (if elderly) can take an 'equity release' product to help you out. If such a gift is available and is readily offered then you should seriously consider it.
Other than this, you need to start a regular savings plan, making sure that you stick to it by regarding the money saved as 'not available' and the monthly savings as simply a reduction of your income. A final, really important, point is to maintain excellence in your credit history: pay all bills regularly and by standing order, so they don't get overlooked and avoid any blemishes. If you don't have a credit card, do obtain one (this will improve your credit score) but don't get carried away and use it more than minimally.
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It really is not easy for the first-time buyer, nowadays. Some people take a gift from parents, who may have savings or who may be able to increase their own mortgage a little, or who (if elderly) can take an 'equity release' product to help you out. If such a gift is available and is readily offered then you should seriously consider it.
Other than this, you need to start a regular savings plan, making sure that you stick to it by regarding the money saved as 'not available' and the monthly savings as simply a reduction of your income. A final, really important, point is to maintain excellence in your credit history: pay all bills regularly and by standing order, so they don't get overlooked and avoid any blemishes. If you don't have a credit card, do obtain one (this will improve your credit score) but don't get carried away and use it more than minimally.
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
In addition to David's comments I would also add that you need to allow for purchase costs. Even if there were 100% loans available (which you now know there are not) you would need money for solicitor fees, survey, application fee for the lender, stamp duty, on a property where stamp duty is due, all the above can add at least £2500 to your initial outlay but in reality over £3000 as most lenders wont allow you to add the mortgage fee to the loan when you are borrowing a high %, they will want it up front.
perhaps you should consider shared ownership / shared equity as a first step once you have sorted out your initial savings.
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perhaps you should consider shared ownership / shared equity as a first step once you have sorted out your initial savings.