5% deposit mortgage (Not new build / help to buy)
Discussion
Hi all,
Was hoping to garner some real world experiences of getting a 95% LTV mortgage?
I'm currently in process of saving up / paying off debt in order to have my finances in order and deposit / fees / furnishings saved up for.
I'm currently targeting and on track to have £14k cash saved in aprox 10 months time. At which point I'm hoping to buy; £10k 5% deposit, £2k fees, £2k furniture.
However, all this being said, my projections are very much dependant on actually being able to get a 95% LTV mortgage, if I have to go 10% then I'm doubling the time I'll have to spend saving.
Reason for asking is a lot of people seem unsure about 95% LTV and I'm kind of banking on it in my plans.
When do finally buy, the ratios should be reasonable;
Lending 3.5 times salary.
Repayment would be Apx £900 Vs £2800 net per month
Other financial commitments fairly minimal, no kids to maintain or expensive hobby / lifestyles
Was hoping to garner some real world experiences of getting a 95% LTV mortgage?
I'm currently in process of saving up / paying off debt in order to have my finances in order and deposit / fees / furnishings saved up for.
I'm currently targeting and on track to have £14k cash saved in aprox 10 months time. At which point I'm hoping to buy; £10k 5% deposit, £2k fees, £2k furniture.
However, all this being said, my projections are very much dependant on actually being able to get a 95% LTV mortgage, if I have to go 10% then I'm doubling the time I'll have to spend saving.
Reason for asking is a lot of people seem unsure about 95% LTV and I'm kind of banking on it in my plans.
When do finally buy, the ratios should be reasonable;
Lending 3.5 times salary.
Repayment would be Apx £900 Vs £2800 net per month
Other financial commitments fairly minimal, no kids to maintain or expensive hobby / lifestyles
We got on the ladder c. 2.5yrs ago with 5% deposit, ‘normal’ 95% LTV mortgage not help to buy. Was hassle free.
When we came to remortgage about 6 months ago it dropped down to 85% with the rise in property prices and if I’d have bothered to get the house values properly it could have been 75-80%.
When we came to remortgage about 6 months ago it dropped down to 85% with the rise in property prices and if I’d have bothered to get the house values properly it could have been 75-80%.
Another 95%'er here.
Wasn't too hard for me either, all done through London & Country and I was happy with the deal I got on a 5 year fix with Natwest. That was nearly two years ago now.
I can't remember if it was with help to buy or not, but I do recall being told that the 95% Mortgage help to buy scheme is between the lender and the Goverment, not yourself and the lender.
Wasn't too hard for me either, all done through London & Country and I was happy with the deal I got on a 5 year fix with Natwest. That was nearly two years ago now.
I can't remember if it was with help to buy or not, but I do recall being told that the 95% Mortgage help to buy scheme is between the lender and the Goverment, not yourself and the lender.
EB89 said:
Hi all,
Was hoping to garner some real world experiences of getting a 95% LTV mortgage?
I'm currently in process of saving up / paying off debt in order to have my finances in order and deposit / fees / furnishings saved up for.
I'm currently targeting and on track to have £14k cash saved in aprox 10 months time. At which point I'm hoping to buy; £10k 5% deposit, £2k fees, £2k furniture.
However, all this being said, my projections are very much dependant on actually being able to get a 95% LTV mortgage, if I have to go 10% then I'm doubling the time I'll have to spend saving.
Reason for asking is a lot of people seem unsure about 95% LTV and I'm kind of banking on it in my plans.
When do finally buy, the ratios should be reasonable;
Lending 3.5 times salary.
Repayment would be Apx £900 Vs £2800 net per month
Other financial commitments fairly minimal, no kids to maintain or expensive hobby / lifestyles
Plenty of none HTB 95% rates about........we've done a few this week! Was hoping to garner some real world experiences of getting a 95% LTV mortgage?
I'm currently in process of saving up / paying off debt in order to have my finances in order and deposit / fees / furnishings saved up for.
I'm currently targeting and on track to have £14k cash saved in aprox 10 months time. At which point I'm hoping to buy; £10k 5% deposit, £2k fees, £2k furniture.
However, all this being said, my projections are very much dependant on actually being able to get a 95% LTV mortgage, if I have to go 10% then I'm doubling the time I'll have to spend saving.
Reason for asking is a lot of people seem unsure about 95% LTV and I'm kind of banking on it in my plans.
When do finally buy, the ratios should be reasonable;
Lending 3.5 times salary.
Repayment would be Apx £900 Vs £2800 net per month
Other financial commitments fairly minimal, no kids to maintain or expensive hobby / lifestyles
One thing to bear in mind that became apparent when we bought our first property is that interest rates seem to be much lower if you can get to 10%. It depends on your situation - I was happy living at home (at the bottom of the garden) so continued to save rather than rush into purchasing a house.
Whats your target buy price?
2k fees, you'll be pushing it I think on that, look to near 4-5.
95% LTV means you'll be on a 30 odd year term, at the end of the day way i looked at it I was on the market and had opportunities to change it with new rate deals and any cash bonuses/overpay options once I stabilised outgoings from the move and had done work on the place etc.
A home aint going to be cheap so you need as much cash as you can get.
2k fees, you'll be pushing it I think on that, look to near 4-5.
95% LTV means you'll be on a 30 odd year term, at the end of the day way i looked at it I was on the market and had opportunities to change it with new rate deals and any cash bonuses/overpay options once I stabilised outgoings from the move and had done work on the place etc.
A home aint going to be cheap so you need as much cash as you can get.
I did 95% mortgage just over 3 years ago. The interest rate was pretty poor at 5.2% and it was a 35 year term.
But... It was cheaper than my rent or anything equivalent I could have rented so was a no-brainer really.
2 years later after a lot of work we sold it with a much higher equity so it worked out really well.
Just don't worry about the interest rate or mortgage term as long as it's affordable now, getting on the ladder is far more important as you'll be changing mortgages and or moving on in a few years anyway.
But... It was cheaper than my rent or anything equivalent I could have rented so was a no-brainer really.
2 years later after a lot of work we sold it with a much higher equity so it worked out really well.
Just don't worry about the interest rate or mortgage term as long as it's affordable now, getting on the ladder is far more important as you'll be changing mortgages and or moving on in a few years anyway.
mike74 said:
Yeah you should manage 95% LTV no trouble.
Debt junkies in all their forms are generally welcomed with open arms by the banks these days, the govt also do their best to encourage it,...as it makes for a nice compliant, obedient, populace of life long mortgage slave worker drones.
Is this all you ever post?Debt junkies in all their forms are generally welcomed with open arms by the banks these days, the govt also do their best to encourage it,...as it makes for a nice compliant, obedient, populace of life long mortgage slave worker drones.
We got a 95% mortgage nearly 6 years ago now, paying 5.99% for 5 years with Leeds building society.
Last year we managed to get an 80% mortgage due to the property increasing in value by roughly 25%, which means we now have spare cash to over-pay and spend on home improvements.
The reason for taking out a 95% mortgage was due to the fact that we were looking for another house to rent but no landlords would accept dog owners.
After selling a car we just managed to scrape together a 5% deposit, so decided to buy rather than rent.
Last year we managed to get an 80% mortgage due to the property increasing in value by roughly 25%, which means we now have spare cash to over-pay and spend on home improvements.
The reason for taking out a 95% mortgage was due to the fact that we were looking for another house to rent but no landlords would accept dog owners.
After selling a car we just managed to scrape together a 5% deposit, so decided to buy rather than rent.
Are there any options for finding the difference to take to 10% deposit?
Reason I ask is that when I was looking at my first place was originally looking at 5% deposit. I upped this to 10% in the end by selling my car and buying something cheaper as the difference in rates was HUGE!
Ironically, finding the extra cash to get a nice car again didn't take long as was saving a couple of hundred ££'s a month in mortgage repayments due to lower borrowing at much better rate.
If you cant sell stuff to find the cash, can you borrow from parents etc and repay them? I presume you have done all your sums based on what you can afford to pay back each month. If the 10% deposit and improved rate saves you £X per month then you could pay back that amount each month to parents (or wherever) and be significantly better off in the long run.
This may not be an option but certainly worth exploring as I'm so glad I went through the pain of doing it.
Reason I ask is that when I was looking at my first place was originally looking at 5% deposit. I upped this to 10% in the end by selling my car and buying something cheaper as the difference in rates was HUGE!
Ironically, finding the extra cash to get a nice car again didn't take long as was saving a couple of hundred ££'s a month in mortgage repayments due to lower borrowing at much better rate.
If you cant sell stuff to find the cash, can you borrow from parents etc and repay them? I presume you have done all your sums based on what you can afford to pay back each month. If the 10% deposit and improved rate saves you £X per month then you could pay back that amount each month to parents (or wherever) and be significantly better off in the long run.
This may not be an option but certainly worth exploring as I'm so glad I went through the pain of doing it.
We bought our first home together with a 95% mortgage about 10 months ago. The interest rate is 3.49% and the term is 35 years, but we're over-paying by £100 each month. We went for the longer term so if we struggled at any point we could cut-back on the over-payments.
Assuming a modest 2.5% increase in property value by this time next year we'll easily be under 90% LTV and hoping our interest rate will be closer to 2%.
Assuming a modest 2.5% increase in property value by this time next year we'll easily be under 90% LTV and hoping our interest rate will be closer to 2%.
Thanks for all the replies so far, appreciate it. I feel a bit more assured that my plan will work now.
I spoke with the brokers L & C, they ran some indicative figures. Most of all they affirmed my plan in brief, should work OK -IE concentrating excess money on saving towards a deposit rather than driving down interest free borrowing that I have... Mostly because even when they quadrupled the debt I had, figures indicated I would still be able to borrow an amount I'd be happy with.
D7PNY, you are correct however. L & C indicated current market meant I may be able to lend:
£190k (95%) over 25 years could achieve a rate of 3.89% resulting in repayments of £950
£180k (90%) over 25 years could achieve a rate of 2.1% resulting in repayments of £770
So huge difference, however my view is that if I wait and save 10% I could say miss out on 1% of price growth in that additional year I'm not on the ladder. Obviously not assured or to be relied upon - but it would wipe out additional interest paid.
Also, for the first year I do plan to rent out a room which after expenses should net say £4.5k tax free
I will also, (hopefully) make fairly substantial over-payments to move me up to 10% LTV to bring contractual payments down.
The adviser did tell me most mortgages where a 6 month minimum, but that did make me think that If I can get to 10% equity ASAP then I may be able to do a deal on a better rate after being in a property for 12 months.
D7PNY said:
Are there any options for finding the difference to take to 10% deposit?
Reason I ask is that when I was looking at my first place was originally looking at 5% deposit. I upped this to 10% in the end by selling my car and buying something cheaper as the difference in rates was HUGE!
No options for boosting savings really, car is worth £3k, so not really worth the hassle to trade down.Reason I ask is that when I was looking at my first place was originally looking at 5% deposit. I upped this to 10% in the end by selling my car and buying something cheaper as the difference in rates was HUGE!
I spoke with the brokers L & C, they ran some indicative figures. Most of all they affirmed my plan in brief, should work OK -IE concentrating excess money on saving towards a deposit rather than driving down interest free borrowing that I have... Mostly because even when they quadrupled the debt I had, figures indicated I would still be able to borrow an amount I'd be happy with.
D7PNY, you are correct however. L & C indicated current market meant I may be able to lend:
£190k (95%) over 25 years could achieve a rate of 3.89% resulting in repayments of £950
£180k (90%) over 25 years could achieve a rate of 2.1% resulting in repayments of £770
So huge difference, however my view is that if I wait and save 10% I could say miss out on 1% of price growth in that additional year I'm not on the ladder. Obviously not assured or to be relied upon - but it would wipe out additional interest paid.
Also, for the first year I do plan to rent out a room which after expenses should net say £4.5k tax free
I will also, (hopefully) make fairly substantial over-payments to move me up to 10% LTV to bring contractual payments down.
The adviser did tell me most mortgages where a 6 month minimum, but that did make me think that If I can get to 10% equity ASAP then I may be able to do a deal on a better rate after being in a property for 12 months.
EB89 said:
£190k (95%) over 25 years could achieve a rate of 3.89% resulting in repayments of £950
£180k (90%) over 25 years could achieve a rate of 2.1% resulting in repayments of £770
Those rates are poor...............we done a few 95% mortgages last week, fee free products at 3.54% fixed for two years..............£180k (90%) over 25 years could achieve a rate of 2.1% resulting in repayments of £770
EB89 said:
No options for boosting savings really, car is worth £3k, so not really worth the hassle to trade down.
I spoke with the brokers L & C, they ran some indicative figures. Most of all they affirmed my plan in brief, should work OK -IE concentrating excess money on saving towards a deposit rather than driving down interest free borrowing that I have... Mostly because even when they quadrupled the debt I had, figures indicated I would still be able to borrow an amount I'd be happy with.
D7PNY, you are correct however. L & C indicated current market meant I may be able to lend:
£190k (95%) over 25 years could achieve a rate of 3.89% resulting in repayments of £950
£180k (90%) over 25 years could achieve a rate of 2.1% resulting in repayments of £770
So huge difference, however my view is that if I wait and save 10% I could say miss out on 1% of price growth in that additional year I'm not on the ladder. Obviously not assured or to be relied upon - but it would wipe out additional interest paid.
Also, for the first year I do plan to rent out a room which after expenses should net say £4.5k tax free
I will also, (hopefully) make fairly substantial over-payments to move me up to 10% LTV to bring contractual payments down.
The adviser did tell me most mortgages where a 6 month minimum, but that did make me think that If I can get to 10% equity ASAP then I may be able to do a deal on a better rate after being in a property for 12 months.
Yes, it is difficult to juggle the numbers to get it to work. I was fortunate enough to have an expensive car that I could sell to release some cash that had little effect on my actual enjoyment of cars - Had a pretty new Mazda 3 MPS (that I got as replacement car for an RX8 that I had rejected). This meant I could sell for decent amount, and buy an older focus ST (which I actually preferred!) for a lot less cash!I spoke with the brokers L & C, they ran some indicative figures. Most of all they affirmed my plan in brief, should work OK -IE concentrating excess money on saving towards a deposit rather than driving down interest free borrowing that I have... Mostly because even when they quadrupled the debt I had, figures indicated I would still be able to borrow an amount I'd be happy with.
D7PNY, you are correct however. L & C indicated current market meant I may be able to lend:
£190k (95%) over 25 years could achieve a rate of 3.89% resulting in repayments of £950
£180k (90%) over 25 years could achieve a rate of 2.1% resulting in repayments of £770
So huge difference, however my view is that if I wait and save 10% I could say miss out on 1% of price growth in that additional year I'm not on the ladder. Obviously not assured or to be relied upon - but it would wipe out additional interest paid.
Also, for the first year I do plan to rent out a room which after expenses should net say £4.5k tax free
I will also, (hopefully) make fairly substantial over-payments to move me up to 10% LTV to bring contractual payments down.
The adviser did tell me most mortgages where a 6 month minimum, but that did make me think that If I can get to 10% equity ASAP then I may be able to do a deal on a better rate after being in a property for 12 months.
Wish you all the best as certainly seems like you are looking at things with your head screwed on right.
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