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 ?
And if you do get it would it not be the most friendly mortgage rate ? pls advice
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. | 01.11.11 @ 11:09
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. | 01.11.11 @ 11:49
It is becoming increasingly common for parents to help their children buy their first property as David said. But if your parents cannot help with a direct gift of money (from whatever source, although I wouldn't recommend equity release) then there are other options where they can act as a guarantor on a loan you take out to raise the deposit. That means you pay the loan repayments - remember these will be in addition to mortgage repayments - but if you cannot, then your parents would have to pay.
Very much depends on your parents financial circumstances and how much they trust you to be able to make the repayments.
It's a tough call because if you try to save the deposit house prices could go up while you're doing that and become further out of your reach. | 03.05.17 @ 10:02