For many first-time buyers who rent in the UK, the dream of owning their own home can often feel out of reach. Skipton Building Society, however, has stepped in to address these challenges with their innovative new deposit-free mortgage. This mortgage product is specifically designed to support first-time buyers that are renting in their journey towards homeownership. Let’s delve into the key features of this mortgage and discuss why it may be an attractive option for those looking to take their first steps onto the property ladder…
How old do I need to be for the deposit-free mortgage?
Skipton’s deposit-free mortgage offers a maximum mortgage term of 35 years, allowing borrowers to spread their repayments over a longer period and make them more affordable. It’s important to note that Skipton has set an age limit for this mortgage, with the oldest customer being required to be 44 years old and the youngest customer on the application must be at least 21 years old, ensuring that borrowers have reached a suitable age to enter into a mortgage agreement. The mortgage term plus the borrower’s age must not exceed 75 years to be eligible for this product.
How does the deposit-free mortgage work?
This mortgage is available as a 5-year fixed rate product, offering stability and predictability in monthly repayments.
Am I eligible for a loan on a deposit-free mortgage?
Loan eligibility is determined by the loan-to-income (LTI) ratio, which means that borrowers’ potential borrowing is based on their income. For example, a couple earning £50,000 per year could potentially borrow around £250,000, as long as their new mortgage payments do not exceed the average rent they have paid over the past 12 months. This criterion ensures that the mortgage remains affordable and aligned with the borrower’s financial circumstances.
Skipton requires applicants to have no missed payments for any obligations in the last six months, including phone bills. This underscores their commitment to responsible lending and ensures that borrowers have demonstrated consistent financial responsibility. You can use their online borrowing calculator here.
Are all houses available for deposit-free mortgages?
New build homes are not eligible for this mortgage product; however, borrowers can purchase other types of homes. Skipton aims to provide support for a diverse range of properties while ensuring responsible lending practices.
Can more than one person per house-hold apply?
Flexibility is offered by allowing up to four people to apply together on a single application. This is particularly beneficial for individuals who may want to combine their resources and purchasing power to secure a mortgage. Additionally, if the two new borrowers are currently living separately, Skipton takes into account both rental outgoings for the mortgage calculations, providing further opportunities for joint first-time buyers who are currently renting.
What are the benefits of this scheme?
Now, let’s delve into why this mortgage product may be an attractive option for certain first-time buyers. Firstly, it caters to those who have never owned a property before and find themselves stuck in the rental market. With the deposit requirement removed, these individuals can finally embark on their homeownership journey without the need to save up for a substantial deposit.
Furthermore, for joint first-time buyers who are currently living in separate properties and renting, Skipton’s deposit-free mortgage allows them to utilise both of their rental payments when calculating their borrowing potential. This feature provides a significant advantage by considering the combined financial strength of both applicants, enabling them to afford a more suitable property together.
Additionally, the mortgage product offers a lifeline to first-time buyers experiencing rental increases. Skipton’s deposit-free mortgage empowers these borrowers to explore homeownership as a more cost-effective alternative, potentially allowing them to pay less for their own property compared to escalating rental costs.
Moreover, Skipton acknowledges the possibility of borrowers receiving financial assistance from family and friends. Unlike many lenders who are wary of gifted deposits, Skipton permits
Want to find out more?
Intrigued by Skipton Building Society’s innovative deposit-free mortgage? Want to explore this opportunity further? Reach out to the team here at TML Solicitors!
If you have questions about eligibility criteria, documentation requirements, or simply want to understand how this mortgage product can benefit you specifically, we can help!
To take the next step towards securing your dream home without the burden of a deposit, contact TML Solicitors today. Their experienced team is ready to assist you on your journey towards homeownership with Skipton Building Society’s deposit-free mortgage.
Remember, owning your own home may be closer than you think and we can help make it a reality. Get in touch today and take the first step towards a deposit-free mortgage and the joy of calling a property your own.
