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It’s important to understand that securing a 100% loan to value mortgage – that is, a mortgage with no deposit – is a very unusual proposition. Whereas this was relatively easy before the financial crisis, this is now much more difficult to achieve.
In order to do this, you will need to be a high net worth individual that fits a very specific profile. Of course, high net worth clients usually have a high amount of liquidity, meaning they can typically afford to place a deposit, but would simply prefer not to, perhaps because they want to keep the funds free for other investments. So how can a large mortgage with no deposit be achieved?
To secure 100% loan to value mortgage, a bank will most likely require you to place assets under management, which the lender will then manage on your behalf. This is particularly common in Europe; the www.ennessinternational.com team have secured 100% finance facilities for clients in this way.
This will generally only be achievable with a private bank, so to do this, you will need a broker to make the appropriate introductions for you and negotiate on your behalf. However, this again may not be the ideal solution for high net worth borrowers looking to retain their liquidity.
One of the most effective ways of securing a 100% residential mortgage is a Lombard loan. A Lombard loan is a loan secured against cash or liquid assets. Lombard loans can be approved swiftly and simply against a pledge of assets that can easily be converted into liquidity – such as stocks, shares, pension pots, equities and bonds. You can use any financial product with a tradeable value. You can borrow against the deposited assets up to a certain percentage of their market value.
The applicable loan to value ratio will depend on the type, currency, quality, volatility, and tradability of the securities in question, as well as on the diversification of your portfolio, and will be reviewed at regular intervals. We are able to secure excellent terms for loans such as this—often better terms than can be arranged for conventional mortgages.