The 100% mortgage is back – is it worth the risk?

A new mortgage from Lloyds Bank lets first-time buyers borrow the entire cost of their new home. But this isn’t a return to the pre-financial crash lending frenzy

It is a 100% mortgage but not, thank goodness, as we once knew them. Lloyds Bank’s new Lend a Hand mortgage offers first-time buyers the chance to borrow the entire price of their new home – but with the considerable caveat that a relative has to have a lump sum worth 10% that they are willing to tie up for three years, and have it raided if you miss any payments.

So, first up: this is no use at all for anyone without a family member with a chunk of cash they don’t need, willing to help them on to the housing ladder. But nor is it the return of the bumper mortgage market we saw in the run-up to the financial crash, where loans of up to 125% were available (leaving some borrowers trapped in negative equity after the downturn). There is still careful thinking to be done before taking on a mortgage this size – and never more so than now, with uncertainty over Brexit clouding the market.

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from Property | The Guardian http://bit.ly/2G70Ckg
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