Mortgage help needed for upgrade. PLEASE. Highest LTV advice

Miguel1979

Hello all,

I'm new here and hoping you can provide me with the help I need as my internet searches have proved unsuccessful.

Me and my husband are currently living in a 1 bedroom house, which we bought just over 3 1/2 years ago with a 100% mortgage.

We now wish to move, mainly as we would like to start a family, which is obviously not possible in a 1 bedroom house.

The problem with this is that in order to be able to buy a large property we would need a 100% mortgage, which I believe no longer exist (althoguh I would love someone to tell me I am wrong).

My current mortgage company, with whom I am in a fixed rate with, will only lend us 85%LTV for a new property which is of no use as we have no deposit, or cash to cover fees etc.

We have not had our property valued but I belive we only have approximately £6000 equity in our property, given that we have only been there for a few years.

What I would like to know is what is the highest LTV mortgage out there at the moment, and how do they calculate the amount they lend is it based on ? x salary amount of affordability?

I am beginning to think at this rate we have no chance of ever starting a family, or only being able to do so by selling our property and renting a larger house or by renting out our house and then renting alternative accommodation for ourselves.

I am hoping someone can offer me any advice on any options that may be open to us.

I'm not sure I have explained my situation prefectly so feel free to ask any questions.

Thank you.

herbiesjp

I'm sorry to sat that without at least a 10% deposit - (more needed for better rates) you will not be able to buy a property

Miguel1979

Do you think we are ever likely to see 100% mortgages return?

herbiesjp

They may do.

But not any time soon I'm afraid

Miguel1979

So basically my only options are to:
a) Not have a family
b) Sell my property and rent and risk never being able to get on the property ladder again?!

herbiesjp

Banks are not obliged to lend money.

If they do, you have to abide by the T&C of the loan.

If you cannot meet the criteria of the loan, then unfortunately you will not be able to buy a bigger property

I don't mean that to sound harsh, but it is the cold hard facts.

Otherwise anyone would go and get a mortgage if they did not have to put down a deposit.

Miguel1979

I understand this, and I know the reckless lending is what has caused all the problems in the first place.

But the fact is I previously got a 100% mortgage, which I have never made a late payment on or missed a payment on.

I think realistically if they want the property market to improve 100% mortgages will have to come back.

I don't think it is unreasonable for me to have not been able to save over £23,000 (15% depost). There are very few out there priviledged enough to be able to afford this.

The 125% mortgages were crazy and the 6 times salary etc. That is what caused these problems in the first place, not 100% mortgages to help get people on the property ladder.

I think unless they look to change this, there will be a massive drop off in first and second time buyers.

I understand they have no obligation to lend to me, but I feel like I am (and I'm sure many others) are being punished for trying to live an honest and decent life. I'm thinking perhaps rather than working all my adult life, paying taxes, buying a house, getting married and then planning a family (which is looking doubtful, due to the current situation), I should have just had a baby, claimed benefits and got a council house.

I know what sounds harsh, but that's how it feels.

opinions4u

Miguel1979 wrote: »

But the fact is I previously got a 100% mortgage, which I have never made a late payment on or missed a payment on.

That was then. This is now.

You need to understand that the lenders have significantly less money available to lend. What they do have to lend will not be targeted at the riskier end of the market. They will cherry pick the best borrowers with the biggest deposits.

I think realistically if they want the property market to improve 100% mortgages will have to come back.

If you want to see a change in the attitude of the nation, a return to encouraging people to save before they make major purchase is a good thing. I personally hope that we never see the 100% mortgage again for "normal" house purchase. (some lenders do have schemes to help exisiting borrowers in negative equity, and while these are a good thing they tend to be expensive and restricted).

I don't think it is unreasonable for me to have not been able to save over £23,000 (15% depost). There are very few out there priviledged enough to be able to afford this.

I think it's perfectly reasonable for a lender to demand a decent personal stake from a borrower in an unstable market where the appetite for risk is low.

The 125% mortgages were crazy and the 6 times salary etc. That is what caused these problems in the first place, not 100% mortgages to help get people on the property ladder.

100% mortgages have always been significantly riskier than 95% mortgages. Lenders' statistics back this up time and again. Those who have no personal stake in a property are more likely to be repossessed. You might be the good guy, but you are part of a riskier market segment.

I think unless they look to change this, there will be a massive drop off in first and second time buyers.

It's already happened.

I understand they have no obligation to lend to me, but I feel like I am (and I'm sure many others) are being punished for trying to live an honest and decent life.

You're being made to save or wait until the value of your property has increased. Or a combination of both.

I'm thinking perhaps rather than working all my adult life, paying taxes, buying a house, getting married and then planning a family (which is looking doubtful, due to the current situation), I should have just had a baby, claimed benefits and got a council house.

It's an option. But I suspect you have more pride than that.

Miguel1979 wrote: »

So basically my only options are to:
a) Not have a family
b) Sell my property and rent and risk never being able to get on the property ladder again?!

Patience is a virtue. Property prices took a decade to recover from their high in 1989. I see little in the current market to suggest a massive increase in prices that will put home ownership out of your reach.

Have you considered saving / overpaying the mortgage?

Your original post suggests you are looking to increase your level of debt and presumably see a reduction of income when you start a family. What is stoping you from saving hard now?

The "I want it now, and I expect to get it now" society is hopefully a thing that will be consigned to history.

seraphina

Miguel1979 wrote: »

So basically my only options are to:
a) Not have a family
b) Sell my property and rent and risk never being able to get on the property ladder again?!

Why are you so concerned about getting on the property ladder again? It hasn't exactly been great for you - it's trapped you in a 1 bed flat with a mortgage that you're stuck with.

There's been some good advice from other posters - if you can't save now before any reduction in income that comes with a child (or nursery/childcare costs) then no wonder the banks aren't exactly falling over themselves to lend to you - sorry if it appears harsh

louisdog

Sorry to hear about your situation; I don't think that 100% mortgages will be back anytime soon.

I think all you can do is try and save some money for a deposit and wait and see what happens with house prices and your salary.

Don't forget as well that if you try and start a family now, the chances are your baby will not be born for 12-18 months, so maybe you can stay in your current house for another 2 or 3 years.

I do sympathise, I know it's not ideal but am just trying to say that maybe it will work out ok in the end.

morg_monster

Have you saved anything over the last 3.5 years? If you can't afford to save anything, how would you afford the larger mortgage payments on a more expensive house?