100% mortgage or save for a deposit?

[littleone85]

Hiya all,
me and my partner are thinking of buying our first home, we have very little savings (wish we'd started saving for it earlier but can't do much about that now) so do you think its a better idea to get a 100% mortgage where we'll pay more and be on a hugely tight budget or save for a deposit where by the time we've saved it we'll probably be priced out of the market, depressing eh?

[themalster]

Me and my girlf were in the same situation as you. However, my parents (and friends too) didnt want us to get a 100% mortgage as, like you said,we'd have been on a tight budget.

100% mortgages look good obviously but what happens if you cant afford the repayments one month? It can then snowball and before you know it they'll be after you.

In my humble opinion, id see if your parents or your partners parents are willing to help you out in terms of a small loan for the deposit, as they wont charge you any interest (well, hopefully!). even a �3000 deposit can help. But personally i'd never suggest a 100% mortgage

[littleone85]

Hi, thanks for the idea but neither of our parents could afford to loan us money.

[littleone85]

It's not that 100^% mortgages look good to us, we just feel that we're forced into it as like I said by the time we've saved a deposit we'll probably be priced out of the market, but we might try to save a small deposit and as you said that will help a little.

[themalster]

anything is something. But it does depend on your financial situation. Have you looked at part rent part buy? Its worth a look in all honesty. Like you said, theres a possibility that you could be priced out of the market but on the other hand, the way interest rates are rising it could lead to a property crash. Also, have a look at auctions too cos if you thought that 100% mortgage could be your only option, you could find something that wont stretch you

[EverClean]

Speak to a mortgage adviser. Find out how much a 100% mortgage would cost you and how much a smaller mortgage would cost.

100% mortgages work VERY well for lots of people and are offered by big High St lenders.

Have facts - not opinions.

You can then make an informed decision.

[PrinceRainie]

Just because some "high street lenders" do 100% mortgages...it doesnt mean to say that they are good.

They are only "good" as they offer 1st time buyers the chance to get on the property ladder. That does not make them good! They can get a lot of people into financial problems as many tend to overstretch themselves with the repayments.

You will be suprised at how many of the "high street lenders" do not infact do 100% mortgages..!

Best advice would be to get some quotes (try moneysupermarket.com) but make sure you dont over stretch yourself) but try and save for a deposit as per the malsters advice as a little deposit is better then none.

[littleone85]

Hiya, thanks everybody for the great advice, think we're gonna try to save a small deposit and then try and go for it then. In the meantime I'll be praying for a property crash!! Lol, thanks everyone you've all been really helpful

[Mully79]

My partner and I bought a house 4 years ago. We didn't have any savings, basically we were on poor wages and were renting a teeny tiny house, wanted to start a family... etc etc.

We got fairly decent pay rises one year and decided it was time to get a family house and invest in a property rather than chucking money down the drain renting.

We had a small loan from upgrading our car, so we decided to increase the loan to pay for a deposit and any upfront fees. Ordinarily, this is not the brightest thing to do but with house prices rocketing, we felt if we saved up for god knows how long, we'd be totally priced out of the market.

Needless to say, our house has almost doubled in value in the last 4 years, so it was a wise move. We now have our own modest 3 bed semi with a big garden for our toddler to run amok in - had we saved a deposit and bought now, we wouldn't even be able to afford a tiny, gardenless, 2-up, 2-down terrace on the next street to us. I don't envy anyone trying to get a foot on the ladder, it's a horrible situation to be in.

I suppose it depends on the housing market - they say it's going to drop, but then again who knows for sure?