95% First Time Mortgage

Molson_2

Hello.

I would like to get a 95% mortgage on a £235000 property. My wife and I have a joint income of £80000 and have no debts and an excellent credit history. We were thinking of a 3 or 5yr fix but wondered about a 10yr fix. If we were to move before the end of a 10yr fix would we be liable for the early repayment fee or if we remortgaged with the same company would we be exempt from this hefty charge?

I guess I'm asking whether a 10yr fix means that you can't move for 10 years?

Anyone know any good deals around at the moment for first time buyers like us?

Many thanks

herbiesjp

Bear in mind that at 95% lending most lenders will charge a Higher Lending Charge and at £235k, this could be quite substantial.

You can get fixed rates that are portable - so if you decide to move, you can take the exact deal on the same terms to the new property. If any extra borrowing is needed, you would need to take the extra amount from the current lender, and the rates available at that time.

If you were to move it is still classed as a brand new mortgage application and it is treated in the same way i.e. underwriting from square one - proof of ID, address income etc.

Please note that the lender is not obliged to agree the porting - this is especially important to remember, if say for example your cirsumstances were to change


There are plenty of deals around, if will depend on your exact details as to which would best suit your own personal situation.

HTH

Molson_2

herbiesjp wrote:

Bear in mind that at 95% lending most lenders will charge a Higher Lending Charge and at £235k, this could be quite substantial.

Many thanks for the information. Should I look only at lenders that do not charge a HLC or will lenders who do not charge a HLC simply factor the 'risk' into a higher interest rate?

herbiesjp

You should look at both options and then look at which figures work out in your favour.

That is correct - the ones that do not charge a HLC, counter balance this fact by charging a higher interest rate

Molson_2

Thanks again for the information.

One other quick question. Do we need the full deposit when the mortgage is arranged or only when we finally proceed with an offer? We have some of our deposit in share options that we would have to cash in and wondered whether we had to have the deposit in our account before we could arrange the mortgage?

herbiesjp

As long as you have the funds ready for when you exchange contract you should be fine.