100 Mortgages


Even in the days before the 2008 financial crisis, 100% mortgages were relatively common. Among the major mortgage providers, Barclays and Post offer 100% mortgages. Main hall bankers are again providing 100 percent mortgages to shoppers looking desperately to climb the residential ladder. that' s why they are now looking for a new home. Following the 2007 subprime mortgage crises, when more than 250 different 100 per-cent offers were available, business almost vanished.

Barclays and the Post are among the well-known creditors who once again offer the credits to draw first-time purchasers without bail.

A number of lenders extend the life of mortgages or ask a member of the borrower's household to act as surety in order to circumvent strict constraints designed to discourage loans at higher risks. In spite of these alleged protections, many analysts believe that 100% mortgages are poisonous because they put purchasers at great risks of a bad capital ratio - where someone else's house is less valuable than their debts.

Householders were usually required to deposit at least 10 percent of the value of a home when they wanted to buy a home for a decade.

However, the real estate bubble at the beginning of this last decade led to a sharp rise in housing costs. Concerned that this would make it too difficult for first-time purchasers to get a foothold on the ladder, new ways of funding businesses that allow individuals to make smaller investments were developed by the banking community. However, when the subprime mortgage crises broke out, this type of business was cited as an example of the easycredit lifestyle that created difficulties for tens of thousands of people.

Consequently, the zero deposits business almost completely vanished after a stricter rule by the city administration. More and more proof is emerging that banking and home savings are circumventing the hard new regulations by letting home buyers lower their home loan rebates and get homeowners to secure credit. That means that bankers can continue to make cash from mortgages without neglecting the limitations of city supervisors.

This means that first purchasers must charge 22,000 for a 10 per cent down payment to be eligible for a business with the house like this. Most of the new 100 percent deals have a turn that also puts the parents' house at great danger if a debtor defaults on repayment. In order to give the bank additional collateral, they are insisting that members of the families act as guarantees for parts of the credit.

Are not only customers at greater danger of adverse equities when house prices drop, in many cases their parents or even granddparents face loosing their houses as the borrowers are so extended financially, they cannot afford refunds.

Mehr zum Thema