At a time when mortgages are becoming increasingly difficult to qualify for, Aldermore has done an about-face and is once again offering its 100% mortgage loan with a few stipulations.
The home loan Aldermore is offering at 100% financing is to first-time home buyers only and those who have a family member willing to guarantee 75% of the loan amount. This guarantee would have a ten year term at which time the guarantee is lifted and it becomes the sole responsibility of the homeowner. Nothing will change in terms of repayments, it seems, but there will not be that ‘security’ in place on the lender’s end.
Furthermore, the loan does come with high interest rates which they are currently charging 6.48% on these loans and this rate is good for three years, after which the rate will be adjusted. According to the managing director for Aldermore’s residential mortgages, this is a way of helping first time homebuyers who have become, in his words, ‘disenfranchised’ because of their inability to come up with a high down payment.
He notes that family support has been the most common way in which many first time homebuyers have been qualifiying for a mortgage loan because that support is gifted to them in the necessary down payment. This should alleviate financial strain on families whilst enabling first time buyers to step into a home easily.
The loans have a maximum set at £250,000 and the borrower must be at least 25 years of age. Further, non refundable fees include a £299 booking fee and then there is a £999 completion fee. Mortgage brokers have scoffed at this offering and have noted that there are other similar packages with a down payment of 5% at rates of 5.29% and with just an additional 5%, a first time homebuyer could find much cheaper rates than even those.
