95% Products - are some lenders easier/harder than others?

macaulays

Evening folks,
Currently investigating some of the 95% products available at the moment both NewBuy and open market options. Of the small group of lenders who currently offer this level of LTV, are any known for being particularly more or less picky about their clients etc? Assuming all else was equal about the product I'm trying to figure out if there are any institutions that would be better to approach first/earlier before working down the list to the less likely ones?


Cheers,

Sandy

kingstreet

No. Criteria is tight on all 95% products.

ACG

Have a look around where your based there may be some special schemes.

In Manchester from around March time the council are backing a scheme where they will effectively put a 20% of the purchase price in a bank account for the lender.

You get a 95% mortgage, but the council are effectively guaranteeing 20%, i was speaking to one of the lenders about this what they said was the criteria will be stricter than a 75% mortgage but they will underwrite it like a 90% mortgage. Its not great and it will still be strict but it gives you that little bit extra lee way.

To be honest, if you have any adverse i would forget 95% mortgages, i would even be reluctant at 90%.

kingstreet

ACG wrote: »

Have a look around where your based there may be some special schemes.

In Manchester from around March time the council are backing a scheme where they will effectively put a 20% of the purchase price in a bank account for the lender.

You get a 95% mortgage, but the council are effectively guaranteeing 20%, i was speaking to one of the lenders about this what they said was the criteria will be stricter than a 75% mortgage but they will underwrite it like a 90% mortgage. Its not great and it will still be strict but it gives you that little bit extra lee way.

To be honest, if you have any adverse i would forget 95% mortgages, i would even be reluctant at 90%.

Lloyds already offers something similar, in conjunction with local authorities. Direct only, of course.

http://www.lloydstsb.com/mortgages/llah_las.asp

macaulays

That's great folks, thanks very much indeed for the guidance. We don't have any adverse as such, no late payments or defaults etc, just the usual ftb combo of small deposit and a london rent that pretty much swallows all the salary we could otherwise be putting toward increasing deposit!

I was having a look at the NewBuy products and also some "normal" 95's e.g. Leeds. Is there any significant difference here, is a product that is specifically Mewbuy going to have notably different criteria or be more/less likely to approve than a non-newbuy at the same ltv?

Cheers,

Sandy

kingstreet

No. All lenders are very demanding and very picky at 95%, as I said.

droiderm

I would have thought from an outsiders perspective, that the lender has some additional security with NewBuy? Does this not reflect their underwriting compared to a "normal" 95% mortgage? Or, does the fact it's a new build take away some of that additional security?

macaulays

thanks kingstreet,it sort of makesone wonder what the point in the newbuyscheme is then doesn't it? If there isn't any difference in likelihood of being approved, one might as well not go through newbuy and have a better negotiating position with a developer. It also seems strange to bother producing a product specifically aimed at ftb/those of limitedmeans homemoving (newbuy) and then make it something pretty inaccessible by the sounds of it to anyone who would actually qualify for it? How strange!

droiderm

I don't think ANY lenders would give a 95% "normal" mortgage on a new build. You would be looking at around 85%, maybe les.

macaulays

ah i see - i thought there must be a benefit i was missing! So newbuy is basically providing the products you canget elsewhere but making them suitable for use with newbuild properties. Got it. Thanks! : ) with

kingstreet

The typical maximum loan to value for a newbuild is 80% to 85%.

There are only limited properties offered on Newbuy and these are selected specially by the developer.

It is getting the 95% that's supposed to be the draw, not that the criteria is in some way easier than for a "normal" 95% mortgage.

That's why 95% lending is difficult regardless of the property scenario.