Do You Know How to Get a Mortgage without a Deposit?

A mortgage and that too without a deposit?? Sounds impossible right? But something that is so much popular carries some part of reality. Same is the case with the mortgage without a deposit. However, it would be best if you do not forget that this situation demands consideration of some fundamental aspects. They are surely uncompromised in importance.

What exactly lies behind the concept of mortgage with no deposit?

There are two significant conditions through which you can borrow without any advance payment on a property. If the applicant can facilitate that, approval can happen.

Situation 1# Savings account of the guarantor gets sealed for a particular time

As guarantor is a vital obligation, it has one more important role than just backing your application in case of the loan without a down payment. The guarantor needs to keep his savings account in the authority of the lender with a 5% amount of property value in it.

For example – You want to buy a house of £3,50,000

The mortgage company may ask your guarantor to put 5% of 350,000 in his savings account.

Money in the savings account should be - £350,000 x 5/100 - £17500.

The guarantor cannot take out this amount from the account during the whole loan term. It remains sealed under the authority of the lender. Anyone taking an interest in how to get a mortgage without a deposit needs to have this situation.

Situation 2# - Money equivalent to 5% deposit obtained through a gift

Sometimes the applicant gets a significant amount as a gift from the relatives. In that case, it can easily apply for a home loan without any particular percentage of property value to pay in advance.

The applicant offers the money to the mortgage company, and then the lender gives the loan for the rest of the property price. It is a feasible option for the loan provider as well as for the applicant.

How to find deals that demand no advance payment?

It is a fundamental question, as most of the borrowers do not know precisely where and how to find such deals. The simple answer can be – go to a broker. It is not wrong to search for the lenders directly on your responsibility, but as it is a particular case of ‘without deposit’ brokers are better. They know the industry in entirety.

There are several benefits you can expect from brokers –

1.           Save time on the search. Broker does all the hard work on your behalf.
2.        Reach to broader range of loan options than what you could obtain from your efforts
3.     Brokers can help to get the lower interest rates as they know which loan provider offers such deals.
4.        Broking companies such as Shine Mortgages can also suggest the ways and tactics necessary to tackle any existing financial weakness. For example, if you have bad credit, a broker can quickly tell you the means to improve the credit rating to get a smooth approval on your mortgage application.

You know what…

The above information precisely describes that in actuality, there is nothing like a loan without a deposit. In some or other way, you have to ensure the availability of the minimum deposit amount. The knowledge of this fact is necessary to avoid any fraud from the fake commitments made by some lenders.

It would help if you never forget the fact that a few popular terms are the jargons. They come into existence as the finance companies want to express the presence of comfort for the borrowers. They may want to win new customers. But you need to be rational and should not feel driven in the greed of a particular benefit. There is always the other side of the coin.