Can I Get a Buy to Let Mortgage With No Deposit?
On the surface, hopping onto the property ladder without a deposit looks like an alluring prospect. However, for many it can be a little like an oasis in the desert – in other words they’re hard to come by.
If you’re a landlord, or hoping to become one in the not too distant future, you may be wondering whether you can secure a buy to let property with a no deposit mortgage. We’ll be answering this question in our article.
Can you get a no deposit mortgage for a buy to let property?
The straight-up answer to this is NO. You currently need at least a 15% deposit value to secure a buy to let mortgage.
So, how do I get a no deposit mortgage?
If you’re in a situation where you don’t have enough savings to afford a deposit, then the 100% mortgage can be a lifeline, but there are some key things to consider. In this article we’re looking at the complexities surrounding acquiring a buy to let mortgage with no deposit.
The only way to secure a no deposit mortgage, unless you’re lucky enough to pay for your property upfront, is to acquire a 100% mortgage. This means that the loan value will equal the entire value of the property, rather than a percentage of it.
The 2008 property crash spelled an end to the relaxed attitudes to 100% mortgages. Why? Lenders made the costly mistake of giving out lots of loan money to people who couldn’t afford the repayments – resulting in the aforementioned property crash.
So, lenders went back to the drawing board and one of the changes made included being less keen to hand out full value mortgages with no deposit. What does this mean for you?
This doesn’t mean you can’t get a no deposit mortgage at all, it just means that you may have more of a job convincing lenders that they should offer you one.
Criteria to qualify for the loan will be tighter and you will likely need a guarantor, such as a close family member, who will agree to foot the bill of any debt should you default on your repayments.
While no deposit mortgages are a thing, they’re not very common and they’re certainly not an option for buy-to-let properties.
At Derngate Wealth Management we offer professional advice on a wide range of mortgages and are a specialist Buy to Let Mortgage Advisor Northampton. We can answer all your queries and help you secure a suitable mortgage deal to suit your circumstances. Contact us today to book your free initial consultation.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.