No deposit 100% mortgages and 10 X income borrowing are back

Prior to the 2008 financial crash lenders were routinely giving out 100% and even 125% mortgages, self-certification mortgages with no income checks and up to 10 times income multiples.

This all changed after 2008 when several lenders went bust and the government had to bail out High Street banks in the UK such as Lloyds and RBS, which owned NatWest.

But it was not 100% or even self-certification mortgages that got lenders into trouble. Lenders such as northern rock decided to expand into commercial lending which was outside of their experience and comfort zone.

Subprime lending, or giving mortgages to people with poor credit history, previous arrears and even bankruptcy, also cause massive problems for American investment banks who sold derivatives of these products as triple AAA security.

The vast majority of the actual loans were still being paid in the UK.

Lenders also branched out into buying up estate agencies and other businesses which was a big mistake since they paid far too much for these businesses.

But could we be witnessing a return to more adventurous lending?

Well, that remains to be seen. There has been talk of new lenders, like Propertunity, coming into the market offering 100% no deposit mortgages, but so far they have not launched any product on the market.

Check out: https://www.proportunity.com/blog/zero-deposit-mortgage

We also need to find out more details about the loan terms and the interest rates.

It appears to be some kind of 90% initial loan with a top up loan, similar to a help to buy loan that was offered by the government.

What we don’t know is whether this loan is just an interest only loan or involves a share of the equity in the property.

There are also schemes out there offering 10 times income and minimal credit checks, but these appear to be rent-to-own schemes rather than traditional mortgages.

As always, take legal independent financial advice.

See previous episodes:

4 tips to save money in property letting and development - https://youtu.be/CM22xqmh3Pg

Big changes in private rented sector, leaseholds & property ads - https://youtu.be/SeOA_zMqaIY

Get cheaper property and higher yields up north

Obtain up to 14% yield on UK buy-to-let property.

Auction Property Bargains From Open House South Herts

· 2 Bed House - £36,000

· 4 Bed Buy-to-Let Rented House £59,000

More property deals at: https://www.facebook.com/estateagentswatfordelstreeandborehamwood

#economy #propertybargains #auctionproperty #money #buytolet #rentalproperty #buytolet #investing #property #houseprices #nodepositmortgage #100%mortgage