Does 95% LTV Morgage still exist?

DannyboyMidlands

Weeble5 wrote: »

Paying £1200 in rent PCM is the main reason. We are saving but will take us another year to save £25-£30K for deposit. Patience running thin and want to get on market before our little one comes into the world in May2012.

Is it such a wrong decision to go for a 95% LTV morgage then?

So rent somewhere cheaper, move in with family, whatever. It'll be worth it in the long run because you'll get a much better interest rate and have a buffer against falling prices. At 95% LTV you could be in negative equity this time next year.

£1200pcm is crazy. The best part of 15 grand per year in RENT. I live in the south east and up until recently was paying half that.

Molehill

Weeble5 wrote: »

Paying £1200 in rent PCM is the main reason. We are saving but will take us another year to save £25-£30K for deposit. Patience running thin and want to get on market before our little one comes into the world in May2012.

Is it such a wrong decision to go for a 95% LTV morgage then?

We are in a very similar situation. We have £1400pcm going on rent and going to a 95% mortgage on a 250k flat seems to make financial sense. We have applied to Skipton and all seems good so far. We plan to overpay so in two years we can swap to a better LTV. Lots of people on here seem against 95% mortgages but in some instances they do make sense.

DannyboyMidlands

Molehill wrote: »

We are in a very similar situation. We have £1400pcm going on rent and going to a 95% mortgage on a 250k flat seems to make financial sense. We have applied to Skipton and all seems good so far. We plan to overpay so in two years we can swap to a better LTV. Lots of people on here seem against 95% mortgages but in some instances they do make sense.

But you just seem to be accepting massive rental payments lying down - or should that be bending over?

Why not rent somewhere cheaper?

Molehill

DannyboyMidlands wrote: »

But you just seem to be accepting massive rental payments lying down - or should that be bending over?

Why not rent somewhere cheaper?

Unless I am missing something this is the rate for two bed flats in nicer areas of south london with a 30min commute to central london. Yes we could move and save a couple hundred a month but equally the cost of moving would mean it would take months to recoup the difference as we are here now.

Weeble5

DannyboyMidlands wrote: »

But you just seem to be accepting massive rental payments lying down - or should that be bending over?

Why not rent somewhere cheaper?

Well if only it was that easy to just live with someone else. Need 2nd bedroom for office to work from and as of Next year need 3rd bedroom for or first born. (YAY!!)

If you have seen rental prices in Surrey you would understand. Cant justify moving out and driving 2 hours to and from work everyday.

Fully understand I can be in negative equity in 1 years time, but at least I will be paying my own mortgage and not anyone else's mortgage.

DannyboyMidlands

Molehill wrote: »

Unless I am missing something this is the rate for two bed flats in nicer areas of south london with a 30min commute to central london. Yes we could move and save a couple hundred a month but equally the cost of moving would mean it would take months to recoup the difference as we are here now.

I've lived all over south London and never paid more than £475pcm including bills. Although as I was only renting and my unltimate aim was to buy a place, the short term quality didn't bother me too much.

Conrad

Weeble5 wrote: »

Fully understand I can be in negative equity in 1 years time, but at least I will be paying my own mortgage and not anyone else's mortgage

Tens of millions of folk down the decades managed a 95% mortgage perfectly well.

Out of all mortgage contracts, less than 1% end up repossessed. Lets re - phrase this. 99% of people KEEP thier home.

The shrill extreme voices always fail to consider the totality of the landscape. Let's say repossessions double. Still 98% sustain thier home.

Look back to 1980 - gloom abounded and the consensus was we were inexorably going down the pan. Who would have thought that the millions who bought a home in that year actualy went on to prosper.

People always dismiss past gloom and past failed predictions - it's Human nature, but a certain section will always tell you tomorows doom will be even worse.They will still say this a million years from now, always have, always will.

You decide whats right, period.

PS - keep in mind the average investor seeking income will still in huge nnumber opt for buy to let which in turn helps underpin value. Imagine being 55 and seeking an income from investmnet. Frankly property is about as good as it gets in terms of current income yield and certainly much more attractive than blindly entering the realm of the city whizz kids.

Molehill

DannyboyMidlands wrote: »

I've lived all over south London and never paid more than £475pcm including bills. Although as I was only renting and my unltimate aim was to buy a place, the short term quality didn't bother me too much.

Well we can aspire to have such great forethought and planning as you have. I am absolutely impressed you got a whole flat to yourself for so little. I have friends who struggle to get a small room for that price these days in what I would could less good areas. This area has shot up lately to at least £1600pcm and we want out before our contract is up in March. Also short term quality is a rather subjective thing.

But considering the scenario we and others find ourselves in a 95% mortgage makes perfect sense. And discussing what we should have done seems of very little use to anyone.

DannyboyMidlands

Conrad wrote: »

Tens of millions of folk down the decades managed a 95% mortgage perfectly well.

Out of all mortgage contracts, less than 1% end up repossessed. Lets re - phrase this. 99% of people KEEP thier home.

The shrill extreme voices always fail to consider the totality of the landscape. Let's say repossessions double. Still 98% sustain thier home.

Look back to 1980 - gloom abounded and the consensus was we were inexorably going down the pan. Who would have thought that the millions who bought a home in that year actualy went on to prosper.

People always dismiss past gloom and past failed predictions - it's Human nature, but a certain section will always tell you tomorows doom will be even worse.They will still say this a million years from now, always have, always will.

You decide whats right, period.

PS - keep in mind the average investor seeking income will still in huge nnumber opt for buy to let which in turn helps underpin value. Imagine being 55 and seeking an income from investmnet. Frankly property is about as good as it gets in terms of current income yield and certainly much more attractive than blindly entering the realm of the city whizz kids.

Your advice is to take a punt in a falling market because you'll probably be all right and you have some random stats to back it up. And you're a mortgage advisor? Jeez, talk about shrill voices.

DannyboyMidlands

Molehill wrote: »

Well we can aspire to have such great forethought and planning as you have. I am absolutely impressed you got a whole flat to yourself for so little. I have friends who struggle to get a small room for that price these days in what I would could less good areas. This area has shot up lately to at least £1600pcm and we want out before our contract is up in March. Also short term quality is a rather subjective thing.

But considering the scenario we and others find ourselves in a 95% mortgage makes perfect sense. And discussing what we should have done seems of very little use to anyone.

This is a money saving website. No need to get all narky when I suggest that spunking 17 grand a year of your after tax income (22 grand before tax?) on rent and then scratching around for a risky 95% mortgage at a rip off rate because any possible deposit has gone into some landlords pocket in Clapham or somewhere isn't a very clever idea.