Purchasing a home could now be easier for some first-time buyers who are currently renting.
For the first time since 2008, people looking to get on the first rung of the property ladder could have a new option available to them. It comes as Skipton Building Society announced earlier this week that it is launching a deposit-free mortgage scheme.
Normally when you apply for a mortgage, the maximum amount you can borrow is based on your income and outgoings. However, in a bid to break “rent cycles” Skipton is looking to do things differently.
They have said that tenants will only be lent a mortgage equivalent to their monthly rental payments to ensure they can afford the property.
Many people will be looking to jump straight into such an opportunity but, while it is a great option for some, it is important to remember that the scheme won’t work for all buyers.
An expert opinion on deposit-free mortgages
John E Jones, Director of Residential Property at Jackson Lees Solicitors, gives his verdict on deposit-free mortgages, saying:
“It is always encouraging to see mortgage lenders offering products that will help Clients and especially first-time buyers onto the housing ladder.”
He went on to issue some valuable advice, adding:
“However, like all such products, it is important that Clients obtain independent financial advice to check whether a nil-deposit mortgage is suitable and will meet their needs and, if so, that they meet the application criteria.”
Criteria for a deposit-free mortgage
As stated by Skipton Building Society the list of criteria is as follows:
- You need to be a first-time buyer
- You need to be 21 years of age or above
- You need to have been renting for at least 12 consecutive months out of the past 18 and be up to date on all rental payments during this period – and be able to provide proof of this
- You need to be up to date for at least 12 consecutive months out of the past 18 on household bills and, again, be able to provide proof
- You can't have missed any other repayment commitments over the past six months which show on your credit report
- You can’t be looking to buy a new-build flat
Contact our experts
We know first-hand that buying a house can be a very stressful time for you. Our friendly specialist solicitors are always available at our Liverpool and Wirral offices to help you resolve your dispute and move forward. Call us today on 0151 282 1700, request a callback at a time that is convenient for you, or make an enquiry today.