95% ltv??

The_Dark_Prince

Hi,

First time on here, but been advised a good site for advice.

After clearing over £20k of debt in the last 5 years I have decided it's time to buy my first home. I have found a lovely 2 bed which is shared ownership, but only have 5% for the deposit. Is there still companies out there doing 95% mortgages and would I have a chance of getting one?

A little about me to possibly help with if I'd have any issues in getting a mortgage.

The house vale is £96250 for 50%. My salary is £22.5k and the only debt I have is a loan of £3700, of which I pay £100 a month. There is a very high chance that my basic pay will go up to £25k soon as I am about to get a sales job with my current employers, but I guess I should work on the basis of my current salary!

Any guidance would be appreciated!

callmechar

yes there are 95% deposit mortgages eg skipton however I am not sure you would get this sort of mortgage on 95% LTV

The_Dark_Prince

OK thanks for the reply

poppy10_2

You have a net deposit (after taking into account your loan) of only £1100, which is just over 1% of the amount you want to borrow. You'll be very unlikely to get a shared ownership mortgage on the figures you have provided.

In any case, shared ownership is a scam, preying on the financially vulnerable. If you can't afford to save up a decent deposit then you can't afford to buy a house at present. The best thing to do would be to knuckle down and save hard for a couple of years, instead of getting tied into a high interest rate mortgage on an overpriced house (or rather, half a house).

The_Dark_Prince

I've often thought that, especially with the new builds which seem to be overpriced. This house I viewed is in a village and was one of four cottages that were built in 2002 (to a very high standard) and this was the only shared ownership. The neighbours have just sold for £225k, although they put in a loft conversion to make it a three bed.

I thought I'd struggle to be honest, but thought it could be worth asking. I will be investing about £500 a month into shares until March, and then I will have to start paying rent again (my mum owed me some money so rent her other house for free until then) so that will be reduced.

poppy10_2

Can you pay off your loan early? The interest you are being charged is probably more than you'll be earning in a savings account, and stock market returns are not guaranteed.
Other than that your plan sounds good.

The_Dark_Prince

I could pay the loan off with my current investment, but I really want to sit on the shares as they're in a good place at the moment and with news expected soon there is a high possibility of getting a good return and even rumours of a much larger company sniffing around

The_Dark_Prince

oh and the loan is staff rate as I used to work for the bank, so not actually too bad

carlw

The_Dark_Prince wrote: »

I could pay the loan off with my current investment, but I really want to sit on the shares as they're in a good place at the moment and with news expected soon there is a high possibility of getting a good return and even rumours of a much larger company sniffing around

what shares are they, im looking for something to buy. Just sold my sky shares...

The_Dark_Prince

carlw wrote: »

what shares are they, im looking for something to buy. Just sold my sky shares...

I've invested in Rockhopper and Argos Resources. Both drilling in the north basin of the Falklands for oil. I'm at a slight loss with the Argos at the moment, but have a good average price with RKH and am happy with them. It's at an interesting stage, but as with any investment I'd suggest doing your own research

GAH

OP, I would have a trawl through the site, and read some threads about people that have bought shared ownership homes, with small deposits.

I know people invariably don't come here writing glowing reports about certain subjects, but the majority of threads on shared ownership with low deposits, normally ends with people having money worries, such as negative equity, not been able to sell etc.