Skipton Building Society recently introduced a 100% mortgage, offering a no-deposit option to assist aspiring homeowners in purchasing new build properties. This article explores the mechanics of 100% mortgages, outlines the eligibility requirements, and highlights alternative avenues available to first-time buyers.
Understanding Skipton Building Society’s 100% ‘Track Record’ Mortgage
Skipton’s ‘Track Record’ product offers five-year fixed-rate terms, accommodating mortgage periods of up to 35 years.
The loan amount is limited to the borrower’s monthly rental payment. For example, if the monthly rent stands at £1,500, the monthly payments of the 100% mortgage can’t be any more than £1,500.
However, it is important to note that this type of mortgage is not applicable to new build flats. Instead, it serves as an attractive option for those considering the purchase of new build houses.
To determine eligibility for Skipton’s 100% mortgage, several criteria must be met. Prospective applicants must:
• Be aged 21 or older.
• Qualify as first-time buyers.
• Transition from one household to another, specifically from a rental property.
• Demonstrate a solid rental payment history, with 12 consecutive months of rent payments within the past 18 months.
• Exhibit a reliable track record of utility bill payments over a span of 12 months.
• Seek a loan amount equal to or below £600,000.
• For individuals who possess a deposit, it may be utilised for up to 5% of the purchase price when applying for a 100% mortgage.
In instances where potential buyers do not meet the eligibility requirements for Skipton’s 100% mortgage, there are alternative schemes available for first-time buyers:
Designed for first-time buyers, this scheme enables the purchase of a new home with a 5% deposit, provided the property value falls within the £750,000 threshold.
By accumulating a 10% deposit, applicants may enhance it by an additional 5% through the Deposit Boost scheme. This increased deposit of 15% grants access to more competitive mortgage rates.
Help to Buy – Wales
Targeted specifically at first-time buyers in Wales, this government-backed initiative assists in bridging the affordability gap by offering a loan of up to 20% of the property’s value.
Through Parent Power, parents can contribute to their children’s deposit, act as joint applicants, or guarantee their mortgage. This scheme has the potential to boost the deposit by up to 5% of the purchase price.
Key Worker Deposit Contribution
Some house builders offer a Key Worker Deposit Contribution scheme, whereby £1,000 is added to the deposit for every £20,000 spent.
In conclusion, Skipton Building Society’s 100% mortgage presents a promising solution by eliminating the need for a deposit when purchasing new build properties. However, for those who do not meet the eligibility criteria, alternative schemes provide viable pathways to homeownership.
It is imperative for individuals to thoroughly evaluate the terms, eligibility requirements, and mortgage rates associated with each option in order to make an informed decision that aligns with their financial objectives.