Skipton Building Society recently introduced a Track Record Mortgage, because they recognise that saving for a deposit can be challenging, especially when paying bills, rent and covering rising day to day expenses. A 'Track Record Mortgage' means you can purchase a home, without a deposit.
Owning a home may have previously seemed unaffordable, but that could all be about to change.
A Track Record Mortgage means that you can get a 100% mortgage, without having to save for a deposit. This differs from a typical mortgage, where a deposit of between 5% - 10% is usually required.
The mortgage is aimed at renters who have been unable to save for a deposit, yet have been comfortably paying their rent for at least 12 months and are looking to buy their first home. The commonly used phrase "why rent when you can buy" really comes into its own with a Track Record Mortgage, as it allows potential buyers to prove their ability to keep up their mortgage payments by having previously managed rental payments.
For example, many first time buyers who are looking to get a mortgage have often found themselves in a situation where they have consistently paid £1,300 a month in rent, however cannot get a mortgage for £1,100 a month due to their deposit. Sound familiar? Then a Track Record Mortgage could be for you.
However, there are a number of factors which could influence whether you are eligible...
There are a host of factors which could influence whether you qualify for a Track Record Mortgage, these include:
Typically, mortgage lenders will allow you to borrow 4 - 4.5 times your annual salary. However, in this case, the amount you can borrow is not based on your income, but how much you have been paying in monthly rent. For example, if you pay £800 rent a month, you would also not be able to borrow more than £800 per month. However, even if you pay £800 of rent per month, you will still need to pass additional affordability tests.
This mortgage is currently being offered by Skipton Building Society, based on a 5.49% fixed rate for 5 years.
A Track Mortgage does allow you to purchase a home without a deposit. However, if you have a deposit of less than 5%, you may still be eligible and this could reduce the amount that you need to borrow.
If you're a first time buyer looking to buy your first home, just click here to read our guide which takes you step by step through the process of buying a new build home.
But if you're already a home owner and you don't qualify for a Track Record Mortgage, we've got other ways to help you buy, find out more about our buying schemes here.
Start your search for a new build home today.
