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Previously, it was easy to get a 100% mortgage, even if you happened to be a first time buyer. However, since finance and mortgage loans became harder to come by in the recent crunch and meltdown, lenders are not so keen to offer finance and 100% mortgages to people or businesses. Why is this? well there are a few explanations that would illustrate why this has indeed happened. Firstly, as soon as the banks tightened their lending criteria and wouldn't lend to each other, the money in the monetary system started to dry up. This caused cashflow issues for many of the banks, since they relied on the money they could borrow from other banks at wholesale rates. When this disappeared, they struggled to raise cash to finance their business, yet still had demands for cash which caused issues. Second was the actual investment - the property marketplace itself. For a few years the investors were moving out of shares and everyone was getting into buying property as a good investment for a decent return. This was further shown with all the tv programmes on diy and home improvements which further boosted sales and encouraged property investment for first time buyers and 100% mortgages. With all this attention, house prices started to increase and rise further, with demand outstripping supply and people buying up more and more. It became difficult to see the ceiling on the demand and lots of buy to let and 100% mortgages for first time buyers were written. This included a lot of money for the sub prime mortgage market, which originated in the USA. Since the property market continued to grow, the banks got greedy and wanted even more return, so they would begin to write mortgage loans that perhaps with a little hindsight should never have been written. When the slump came along in the mortgage market and people were unable to keep up with their repayments or indeed raise the 100% mortgage money that they required, problems began. Getting 100 percent mortgages if you are a first time buyer, although tricky at the present, is not impossible, if you work towards getting a solid and undervalued investment, as well as a perfect credit score with no bad debts and a sound profile. This will stand you in a better place for being approved for credit.
100% Mortgages:
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