Ballpark deposit?

Son_of_a_beesting

Lifes_Grand_Plan wrote: »

I think he means once you have purchased, the fall would wipe out the deposit that you put down...

Rather than your deposit that you have saved up (before you buy) in which case you would be correct.

Of course only if you sell when its dropped. If you want to stay in the house for more than a couple of years then it may not matter.

Are you buying a house to make money or live in?

kkebay

You would "need" minimum of 5% deposit to get a mortgage, full stop.

diable

where do you live?

jamesd

gt568 wrote: »

So 15% of the property value would be a good target assuming my credit history was good?

10% bare minimum. 15% a lower interest rate. 25% to get the standard good deal interest rates. All assuming that you have an excellent credit record.

However, this doesn't mean that it's best to use a higher deposit even if you have the money. You can calculate the cost of the extra deposit and the amount of interest you'll save. That will give you a return on capital invested calculation for the use of the extra money. If you can get a higher return by saving or investing and really do that then it can pay not to use the higher deposit value. This is most likely to be interesting to consider between 25% and 35% deposit values, where the interest rate differences can be quite small.

You should also consider the return you get from having the mortgage and saving the rent. That'll probably give you a good return on the initial minimal deposit value.

whatyadoinsucka

having bought a house last november 2009, we needed minimum 10% (got 4.7%IR Floating) (although now it appears 5% may do it, although IR will be high), you need to also consider Earnings Multiples (under 3x) plus a secure job, and a detailed assessment of incomes and outgoings are all required

Remember solicitors fees will be circa £650-£1,000 on a £100k-£150k house (always get 3 quotes) and remember you can go cheaper online but its best to have solicitors you can badger.

Also the first two months money just outflows, rent first and build up some quality furniture, and ensure your partner is liveable

Check out HSBC who were issuing FTB Mortgages throughout these last few years unlike the instigators to the financial world we now live

gt568

Yorkie1 wrote: »

Perhaps a better way of explaining it is that the risk of negative equity is higher / your equity in the house is wiped out.

For example, you have a 5% deposit on a £100K house, i.e. £5K. You owe the bank £95K.

If the value of the house rapidly falls to £93K, your £5K deposit / equity has been wiped out. You wouldn't get it back if you tried to sell (in fact, you'd owe the bank even more money).

I get it now. The deposit wiped out after buying, I thought you meant before buying hence my confusion.:)

gt568

Son_of_a_beesting wrote: »

Are you buying a house to make money or live in?

Live in .

diable wrote: »

where do you live?

Swindon area.

diable

Not sure of the prices down there but a minimum now days seems to be 10% but I would try for 20% as that will include money for fees etc etc etc

InMyDreams

Son_of_a_beesting wrote: »

Of course only if you sell when its dropped. If you want to stay in the house for more than a couple of years then it may not matter.

It will matter very much if you want to remortgage at some point and you don't have enough equity any more. If you are that close to the line, make sure you are very happy with (and understand) what your mortgage does after the initial headline rate finishes, just in case you are not then able to get another deal (eg re-fix).

Also, don't just look at what the mortgage payments would be now, take into account what they could go up to (which is anyone's guess).

Son_of_a_beesting

InMyDreams wrote: »

It will matter very much if you want to remortgage at some point and you don't have enough equity any more. If you are that close to the line, make sure you are very happy with (and understand) what your mortgage does after the initial headline rate finishes, just in case you are not then able to get another deal (eg re-fix).

Also, don't just look at what the mortgage payments would be now, take into account what they could go up to (which is anyone's guess).

We dont know what the rates will be in x years time. We dont know have how much the house will be worth. We dont know if he will want to remortgage etc. The only certain thing is what the house is worth now and what the rates are now. Always budget for massive increases, but dont let fear of what the future might hold hold you back. If we all worried about what might happen in 5 years we would never do anything! Save for a rainy day but enjoy today!

What he asked was about deposits, but it not just a deposit that gets you a mortgage.

Also get proper full face to face financial advice from a professional, not just internet experts (although there are proper financial experts on the forum they can not give you the same advice as someone who knows all your details and has done a full fact find)!

All the best with your future house purchase.