Zero Deposit Mortgage | Everything You Need To Know!

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Wow, just wow! We’re excited to share the availability of a new mortgage product, specifically designed for first-time buyers with a proven track record of paying rent and household bills. This mortgage provides the opportunity to borrow up to 100% Loan-to-Value (LTV). That means no deposit needed!

First-time buyers who have been renting and can demonstrate a track record of affordability for all monthly rent and household expenses for at least 12 months in the last 18-month period may be eligible for a mortgage up to 100% LTV. This could help those with no deposit, or those who haven’t quite been able to save 5% (for which their are existing mortgages available.)

Eligibility

There are some eligibility requirement to be aware of:

  • Each applicant must be a first time buyer
  • Each applicant must be aged 21 or over
  • If you have a deposit, it must be less than 5% of the purchase price
  • Each applicant must have no missed payments on debts/credit commitments (e.g. mobile phone bill) in the last 6 months
  • You are looking to borrow up to £600,000
  • You meet the household-to-household criteria (this means that the same people who are renting now (and have been for the last 12 months) are the same people applying for the mortgage). Joint applicants who have been renting separate properties will be eligible, as long as each applicant can evidence that they have individually covered their entire rental and household expenditure payments. In this instance, when calculating the max loan amount based on the average rental payment over the last 6 months, their combined rental payments can be used.
  • You’re not looking to buy a new build flat
  • You have proof of having paid rent for at least 12 months in a row, within the last 18 months
  • You have 12 months experience paying all household bills within the last 18 months.

FAQs (Frequently Asked Questions)

  • Am I eligible if I have rented for more than 12 months, but moved in with family/friends less than 6 months ago to save for a deposit? You may be accepted in this case as long as you can provide evidence of at least 12 months rental payments higher than the proposed mortgage payment. If all applicants moved out more than 6 months ago, unfortunately you will not be eligible. If you rent again for a minimum of 12 months’ we can consider their application in the future.
  • I pay my rent in cash, could I still be eligible? Yes, but you’ll need to provide a letter from an ARLA registered letting agent (or other suitably registered lettings association, e.g. NAEA, NACA) as proof of 12 months rental payments.
  • If I have a deposit, can I use this to reduce the amount I need to borrow? Yes, although this isn’t required. The money could be from your own savings or gifted to you and helps reduce the monthly payment and overall borrowing amount.
  • Can I buy a new build property? Yes, new build houses are acceptable, however new build flats are not accepted. A new build property is one that’s being sold for occupation for the first time, which has been newly built or converted within the last 3 calendar years.
  • Can I buy a used flat? Yes, second hand flats will be considered, however new build flats are not accepted. A new build flat is one that’s being sold for occupation for the first time, which has been newly built or converted within the last 3 calendar years.
  • Can I apply for a Track Record mortgage alongside other schemes e.g. Joint Borrower Sole Proprietor, Shared Ownership, First Homes (England), Help to Buy (Wales)? No. The Track Record mortgage cannot be used in conjunction with any other borrowing scheme.
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