Can I purchase a property without a deposit?
It’s one of the most daunting words for first-time buyers, and a major reason why so many put off spreading the nest for as long as possible, but a deposit isn’t as scary as most think.
It’s even possible to purchase a property without the required deposit (normally way into the thousands – 5% of the house value minimum).
Although these types of mortgages are rare, they are a thing, but it is all dependent on your circumstances and those around you.
Read on to find out how you could secure your dream home without a deposit…
A family member with savings
Most people have savings, just some are far better at counting the pennies than others.
Some may be saving for a new car, holiday or perhaps a nice little bonus to give to their children when needed.
If you have a parent, guardian or relative with savings, as long as they are willing to lock down that money into an account with the mortgage lender, then you’ll stand a decent chance of getting on the property ladder.
This ‘joint-account’ acts as your deposit, but the family member shouldn’t need to worry about getting it back, as these assets are unlocked after x amount of time or years, and able to be reclaimed by the original donor.
All that’s left to do is for you to take out another standard mortgage with the same lender (or a different one should you choose).
A family member with equity in a property
Ok, so we may not, or perhaps a family member may not have a spare £10-20,000 lying around in savings, but there is another way…
Again, it involves someone in your family, and if they have equity in their current property, or an unencumbered property (mortgage-free property).
It works in a similar way to the savings, only they are effectively putting a charge against their home security.
So whatever deposit you need, it is then taken away from the value of the families’ property as a guarantee of payment.
Take a grandparent, for example, their property is worth £150,000 and is fully paid off.
You need a £30,000 deposit to secure your first home, so what would happen is the grandparent would have to give 20% security of their property away to act as the deposit.
Just like the first, however, the money or equity will be available after x amount of years.
They’ll be released back and all is left to do is to remortgage your property with the same lender, or find a different one at a better rate.
Why Warrington Mortgage Centre?
Both of these schemes can be quite complex however, especially without expert help, and that is where Warrington Mortgage Centre can step in.
Our team will be happy to talk through whatever options you may have, as well as answer any questions.
If you’re wanting to secure a house without the traditional way of a cash deposit, then give us a call on 01925573328 and we’ll do the hard work for you.