100% & 100%+ Mortgages
100% mortgages allow people to purchase a property without any deposit at all - you borrow 100% of the purchase price!
Due to the credit crunch/falling property prices there are no 100% mortgages available at present, this may well change in the future.
Mortgage lending is all about risk.
If a borrower defaults on their mortgage and the property is repossessed and the borrower owes more on the mortrgage than its value, then the lender loses money!
This scenario contributed signifiantly to the credit crunch. In the USA, property prices were doubling every 5 years so lenders happily leant funds equivalent to the full purchase price to applicants, some of whom had bad credit records and often didnt have a job. Interest was rolled up and added to the mortgage and the lenders felt safe in the knowledge that the property they secured the money against would be worth more than the debt in 5 years time.
Eg £100,000 purchase price, £100,000 money leant. Interest over 5 years c£25,000. Total debt after 5 years c£125,000 against a property likely to be worth £200,000.
After a while of this happening however, house prices fell. Suddenly that debt of c£125,000 was secured on a property worth £50,000. Disaster!
Areas covered include: Wetherby, Tadcaster, Boston Spa, Collingham, Kirk Deighton, Leeds, Harrogate, York...
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