There is to a £400 million fund from the UK government in order to help to kick-start housebuilding in the UK and is about to be announced. David Cameron and Nick Clegg’s Government are about to set in place plans to try and resolve Britain’s housing crisis and lack of mortgages and 100% mortgages.

This does not resolve the lack of such mortgages for new buyers with no deposit mortgages, but will try to end the current no win cycle whereby, lenders won’t lend, builders can’t build and buyers can’t buy, with a new housing strategy with the government in effect backing the mortgage and lowering the deposit from 20% to maybe 5%.

The aim is to help those who play by the rules and release the construction of upto 16,000 homes, with around 20% of these being affordable homes, a possible alternative to the 100% mortgage market maybe?

100 percent financing mortgage deals are of interest in general to people who have lower disposable income and earnings to pay their mortgages and find deposits.  The whole aspect of a mortgage is to eventually own the property which you have paid monthly mortgage payments on, and with 100 percent financing mortgage, the mortgage lender will also provide the deposit contained within the 100% mortgage, rather than you raising such a deposit as a 10% deposit or 25% of the buying price yourself.

As mentioned above, the main incentive for taking this route of finance is that 100 percent financing mortgage means that you do not have to save a deposit.  With property prices relatively high right now, finding 25k or more is no mean feat to many people, and prices them out of the mortgage equation.

So lenders who provide 100 percent financing mortgages are a rare breed, but an alternative has recently arrived in the shape of the deposit amount being provided by the lender, in exchange for family members securing the deposit, so the risk is lowered for the lender, as should the borrower of the 100 mortgages default on the repayments, then there is security held against the debt that can be reclaimed.

Always seek legal and financial advice before you enter into such a mortgage, or if you are also considering acting as a guarantor of 100 percent financing mortgage, as you may be putting your own assets at risk.

100 financing mortgages were a very popular mortgage type for many borrowers, even with increased interest rates that were repayable on the mortgage interest and mortgage debt, since they meant that the mortgagee did not have to find the cash for the initial mortgage deposit, but rather the whole amount or sum being borrowed was as a full debt against the property.

100% financing are mortgages that require no money down. This is an attractive proposition for potential home owners that wish to have a property which they will eventually own, but with the added bonus of not having to save for a period of time in order to get a 5% – 25% mortgage deposit, which the mortgage company then uses against the house or apartment, and can be at risk if the payments are not made and your home gets repossessed.

For people selecting 100% financing for 100% mortgages, you will be required to get PMI (Private Mortgage Insurance), which will insure your mortgage debt, since this style of financing is more riskier than with a deposit, as the lender is potentially bearing the brunt of the whole debt, in a falling market at present, should you not repay the outstanding mortgage loan on the property.

Few lenders are now going this route since it does bear a lot of risk for them, and so finding such mortgage financing methods is proving trickier, although not impossible.