The Best 5 No Deposit Mortgages

A No Deposit Mortgage is simply a Mortgage product Lenders offer to applicants that do not have any Savings or other monies to put down.

They were common place in the market before the 2008 crash and Lenders who offered these products took a lot of flack in the fallout after the crash. 

In hindsight it was labelled irresponsible lending, and it was in part. 

But it wasn’t just the No Deposit element that was irresponsible, it was the applicants that were being offered these products in the first place.

For example pre 2008, no care was taken to assess an applicants income and Mortgages were taken on an interest only basis with no serious plan of repayment.

Fast forward to today and Lenders take care in who they lend to, and have an obligation and legal requirement to lend responsibly.

That has slowly led to the return of 5% Deposit Mortgages, followed by No Deposit Mortgages.

Yes.

Typically the Schemes are only available to First Time Buyers or those which haven’t owned a property in the last 3 years.

Availability is dependant on your meeting certain criteria, but there are options available to those with No Deposit. 

Please see the different types of options available below..

Typically, yes.

Any deposit you put down will reduce the overall interest you pay over the entire term of the Mortgage.

You could also become eligible for lower rates of interest and generally cheaper Mortgage products.

The greater the deposit you have, the more Mortgage options you will have available to you.

The amount you can borrow depends on your income, credit history, and your outgoings.

Most Lenders that offer No Deposit Mortgages will cap your overall borrowing 4.5 times your annual salary or salaries in the case of joint applicants.

For example, if you earn £40,000, you could borrow up to £180,000.

This does however vary from Lender to Lender, and there are some Lenders that offer First Time Buyer Schemes that could lend you a much higher figure.

Yes, absolutely. 

Typically you will need at least 2 years trading history, and the documents that will be required will depend on whether you own a Limited Company, are in a Partnership or are a Sole Trader.

Profit will likely need to be stable or increasing year over year and/or your Bank Statements will need to support the Businesses previous earnings history as displayed in your Accounts. 

Typically not, no.

A missed payment or two from years ago might not cause any issues. 

But if we’re talking multiple missed payments across multiple accounts, CCJ’s, Defaults or other more serious Adverse incidents, then it’s highly unlikely you will be eligible for a No Deposit Mortgage.

1. Speak to a Mortgage Advisor

They will take details about you, your income and outgoings to establish affordability and eligibility.

If you would like our help, we can put you in touch with a Mortgage that Specialises in No Deposit Mortgages.

2. Get a Mortgage in Principle

Once your Mortgage Advisor has confirmed eligibility and your maximum Mortgage Capacity, they can obtain you something called a Mortgage in Principle. 

This is simply a Certificate which shows Estate Agents that you are able to afford a Mortgage, and therefore gives you authority to offer on a property.

3. Offer Accepted – Mortgage Application Submission

Once you’ve had an offer accepted on a property, it will be time for your Mortgage Advisor to submit your Full Mortgage Application to the Lender.

At this stage the Lender will assess you, your income, outgoings and the property you are looking to buy.

4. Formal Mortgage Offer

Once the Lender has assessed and approved everything, they will issue you with something called a Mortgage Offer.

This is the formal acceptance from the Lender and sets out the terms of the Mortgage contract you will have with them.

5. Conveyancing process

At this stage your Mortgage Advisor will have your Mortgage Offer over to your Conveyancer/Solicitor who will complete the legal side of the purchase and all the relevant paperwork.

6. Exchange of Contracts and Completion

You’re now ready to exchange contracts with the seller of your new property, and complete the purchase.

This is the best staged of the process as all of your hardwork is complete and you’re now ready to collect the keys to your new home.

1. Make sure your Credit Report is the best it can be

Clear and close any small or dormant credit facilities you may have.

Don’t take out any new credit in the months prior and after applying for a Mortgage.

Ensure you’re registered on the electoral roll.

2. Try to save as much as you can

Try to save by being disciplined with your spending.

This will show the Lender you earn more than you pay out each month and will make your Bank Statements look as healthy as possible in the run up to applying for your Mortgage.

3. Have your paperwork ready and in order

Lenders, Solicitor and Mortgage Advisors between them will typically need latest 3 Months Payslips and latest P60 or Two Years Accounts (if Self Employed), latest 3-6 months Bank Statements, Proof of ID and proof of any savings.

A Mortgage Advisor will know which of the above Lenders and schemes will be best for you.

If you would like our help, please click the contact us button at the top of the page, and one of our Mortgage Advisors will be happy to help you.