Are You Eligible for The No-Deposit Mortgage?

It’s a well-known truth that hefty deposits are one of the key factors stopping first-time buyers from joining the property ladder, but what would happen if those deposits no longer existed? 

Building Society, Skipton has just launched their new mortgage that is exclusive to renters. The 100% home loan is a fantastic new way to help people from high rents and into homeownership, enabling those currently renting to join the property ladder.

The new Track Record mortgage uses the buyer's rental and household bills history as proof of affordability and will consider mortgages up to 100% loan to value. The mortgage can be used to buy second-hand homes or flats, but for new builds, the lender will only consider new build houses. The purchasers must be first-time buyers and if buying together both applicants have to buy their first property. The minimum age of each applicant is 21 and must have proof of rental payments for at least 12 months in a row. 

The buyers must have 12 months' experience of paying household bills within the last 18 months.

As always careful consideration is needed – as the house price could drop and the buyers could have the potential of being in a negative equity situation, meaning the property is worth less than the mortgage.

Of course, if buyers have a 5% deposit, then traditional mortgage products would be a suitable solution.

Though the Track Record Mortgage is great news, its eligibility is quite specific. If you are applying for this, you must meet the following requirements.

• Each applicant must be aged 21 or over
• They have proof of having paid rent for at least 12 months in a row, within the last 18 months
• They have 12 months of experience paying all household bills within the last 18 months
• Each applicant will have no missed payments on debts/credit commitments (e.g. mobile phone bill) in the last 6 months
• They must have less than a 5% deposit
• They must be borrowing up to £600,000
• They must also meet the household-to-household criteria described above.

So, if you are thinking about taking the next step from renting and joining the property ladder and you are eligible for this new product, get in touch with one of our expert mortgage advisors. With access to an extensive number of products to help you find a mortgage that suits your needs, we can give you valued advice and guidance.