It is difficult, but not impossible.
We explain how you can get a 100% mortgage with no down payment, detailing the requirements and conditions necessary to achieve it.
As we are sure you want to know more about it, in this post you will find out everything you need to know.
What is a no down payment mortgage?
It is a simple concept, a mortgage that covers 100% of the purchase of the property and in which the contracting party is not required to make an initial contribution to the bank.
It should be remembered that usually, when a mortgage loan is requested, the bank offers to finance up to 80% of the purchase, which obliges the client to pay the remaining 20% upfront, which is called down payment.
Therefore, in mortgages with a down payment it is not necessary to have savings to sign the agreement, although it is necessary to pay the bank the expenses related to the sale and purchase such as taxes or the notary’s service.
Why is it advisable to make an initial contribution?
Because it generates security in the bank and, on the other hand, it demands less from the buyer, preventing him from contracting a larger debt with the bank that he will later find it more difficult to assume.
It is better, if you have the possibility, to pay a down payment and then pay the remaining money through the mortgage; and even more so taking into account that in this way you will not have to pay the formalisation costs at once, such as the notary’s office, notary’s office and the purchase and sale taxes.
What risks do I run if I do not contribute capital?
Mainly one: to go through economic hardship when having to pay 100% of the capital, and without having the savings cushion that the down payment represents.
This is why we must assess our solvency and whether it is worthwhile to get involved in such an operation or opt for other ways (waiting to save, opting for renting…).
Be careful not to take risks and get into a situation that will be difficult to get out of later.
How to get 100% financing for the purchase of a house?
If you want to know how to get a mortgage with no down payment, in this article we explain the different formulas that exist, which does not mean that it is easy. Let’s take a look at them.
Requirements and conditions
If you are wondering how to get a mortgage with no down payment, one of the ways is to hire the services of a financial intermediary or broker who is in charge of negotiating with the bank to try to get the operation done.
You can also try to opt for the mortgage loans granted for housing from the banks’ real estate agencies or Sareb, which in some cases have 100% financing.
Another possibility is to get an appraisal higher than the purchase value, as there are entities that grant 80% of the appraisal value, so if this is higher, it can be considered that the bank finances more than 80% of the value of the property.
The other possibility is to have a high level of financial solvency, as banks are beginning to open their hands in the case of profiles with high incomes, large savings and stable jobs. And, if you can provide extra guarantees, even better: so it is possible to opt for a mortgage with no down payment and a guarantor.
Obviously, when applying for a mortgage loan, it is compulsory by law to take out home insurance, either through the bank or with an insurance company, which are specialists in these matters.
As a minimum, the building must be insured, although the more you insure the contents, the better.
On the other hand, taking out a life insurance policy, although not compulsory, can be useful in the event of death, allowing the property to be passed on to the beneficiaries without the burden of the mortgage debt and allowing them to continue to maintain their standard of living.
Banks offering no-down-payment mortgages
Banks do not have to refuse to grant a mortgage with no down payment… although they will usually be quite reluctant to do so, especially if you do not meet certain financial conditions that give them certainty.
As almost always, it is a good practice to consult numerous banks in order to inform them of our situation and try to achieve our objective, as long as we are also convinced by the conditions of the banks with which we negotiate.
These are some of the banks that offer 100% mortgages and even without a guarantor:
In any case, it is possible that they have changed their financial products, so we recommend that you check their current offer.
Frequently asked questions about no down payment mortgages
When should I take out a mortgage with no down payment?
When you are confident that you have sufficient financial solvency to take out a mortgage but you do not want to pay a large down payment.
If you are short of money or do not have any property to guarantee the operation… not only will it be much more difficult to be granted a mortgage with no guarantee and no down payment, but it may not be worth the risk.
Can I know if I will be granted 100% of the mortgage?
Of course, by having a clear and sincere communication with each bank in which our interlocutor knows what our situation is and we know their company policy, especially the conditions that the banking company offers us in case they agree.
Is it possible to include mortgage costs?
Let’s go one step further: Do mortgages with no down payment and no costs exist? Yes, although this will not be easy to achieve; perhaps it can be obtained if the purchase value is much lower than the appraisal value; or if you have a lot of economic capacity and you can prove it; or if you have another property to serve as a guarantee for the operation; or if you use the real estate portfolio of the banking entities, which will result in more advantageous conditions; or if you hire an advisor to advise you and help you in the management.