95% Mortgages

improving_my_experian

Hi all,

I tried a quick search before posting this, but apologies if this has been answered before.

I was wondering if 95% mortgages are available to first time buyers at the moment or if not, if anyone has any ideas when these are likely to be reintroduced?

Also, not sure if my OH can technically be classed as a first time buyer as he bought a property with his cousin, but got bought out by his cousin's new partner. Anyone know?

We are currently renting. Have approx 8000 for deposit. We would be looking at houses in excess of 150,000.

We met with a mortgage broker last year who explained that due to the recession we would need a deposit of at least 10% but he said this could change.... hence my question??

We will continue to work on building our deposit but its so hard playing this waiting game, knowing that we are wasting money renting.

Sorry 1 more thing, we have looked at Homebuy / First Time Buyers Initiative but the areas where these are being offered are very limited and the houses generally seem to be apartment complexes. Anyone know of any other initiatives?

Many thanks

lightSwitch_3

Nationwide does a 90% mortgage.
If house prices fall you will very quickly fall into negative equity and possibly get repossessed. That means your hard earned deposit will be gone and you will still owe the bank capital. You'll probably end up working to pay the bankers' bonuses for a few years after you are repossessed. The UK economy is not out of the woods yet. Wait to the end of this year to see what happens.

gandalf16

Light switch... why focus on possibly getting repossessed?
Everyone runs the risk of getting repossessed irrespective of the equity in the house.

HSBC have good 90% First Time Buyer rates.

lightSwitch_3

gandalf16 wrote: »

Light switch... why focus on possibly getting repossessed?
Everyone runs the risk of getting repossessed irrespective of the equity in the house.

HSBC have good 90% First Time Buyer rates.

Simple because the jury isn't out yet on the economy of the country and the housing market. He wants a 95% mortgage, another small drop in house prices and he could be in trouble before he has had time to enjoy his new home. So I said wait until the end to 2010 when things will be clearer.

jonewer

gandalf16 wrote: »

Light switch... why focus on possibly getting repossessed?
Everyone runs the risk of getting repossessed irrespective of the equity in the house.

HSBC have good 90% First Time Buyer rates.

Durr... because if you get repossessed with no nor negative equity then you are homeless and in debt.

improving_my_experian

Thanks for the replies. I guess the general message here is to hold off until the economy changes. As we are primarily looking for a long-term home rather than profiteering, i'm not concerned so much about negative equity as no one can really predict what will happen in this volatile market in the next few years (I can only hope that they will increase, but I would rather that happens AFTER we have bought!). As long as we keep up with payments, then even if the property value decreases, we wouldn't be repossessed??
At present then, am I right in thinking that 95% mortgages are not being offered?
Thanks, Maria

Hopejack

Also, the issue with repossession is valid because they may get a mortgage now (at 95% but I doubt it v much, think 90% is the max), IF house prices do fall, or if lending becomes very strict again then (it hasn't relaxed that much yet), it is correct that if they have a high LTV ratio mortgage then they are less likely to get another 'good mortgage deal' when the current one expires - if they do get one then it could be a much higher interest rate and so would mean much higher repayments which would increase the risk of repossession if they cannot keep those up (especially if interest rates do go up - and they will!).

This board has a fair few threads from people who took out high LTV ratio mortgages when lending was silly and now are looking to remortgage due to their current deal finishing and they can't get a good fixed/longer term deal due to their high LTV. In addition, if prices do fall your LTV will increase meaning no one will touch you for a mortgage as you started off with such a high LTV.

I am not aware of any 95% mortgages but have an ask on the mortgage forum - they might know of some?

I think you need to stay where to you are and save a bigger deposit due to what I've said above really to be safe. Also, you say you have a deposit saved, do you have money for legal fees and stamp duty too as they quickly mount up?

LandyAndy

improving_my_experian wrote: »

Thanks for the replies. I guess the general message here is to hold off until the economy changes. As we are primarily looking for a long-term home rather than profiteering, i'm not concerned so much about negative equity as no one can really predict what will happen in this volatile market in the next few years (I can only hope that they will increase, but I would rather that happens AFTER we have bought!). As long as we keep up with payments, then even if the property value decreases, we wouldn't be repossessed??
At present then, am I right in thinking that 95% mortgages are not being offered?
Thanks, Maria

I think it's fair to say that they aren't being offered and even if they were you would be ill advised to take one in the current market. You don't mention what your salaries are and salary multiples might be a significant factor.