100% Mortgage ?
Rising property prices, make first time buyers struggle to save enough deposit for there first property.
If you are on a tight budget you may need a 100% mortgage for the full purchase price of the property. The problem is that your choices are limited. Few lenders offer 100% mortgages and the ones that do charge a higher interest rate than they would for mortgages covering a lower percentage of the purchase price. Some lenders have even started to offer 125% of the property value.
You will also find that as well as having to pay a higher interest rate on your 100% mortgage, you will be charged a bigger mortgage indemnity guarantee (MIG) premium than if you put some of your own cash towards the purchase price. However, to help cashflow, most lenders will allow you to add the MIG to your mortgage. Bear in mind this means you will be paying interest on the MIG for many years.
If you are borrowing 100% of the property value, you should look at fixed or capped interest rate mortgage, since these buy valuable protection against rising interest rates.
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