Help to Buy / 5% Deposit AIP / MIP Questions!

Tunnix

Hello,

My partner and I are hoping to apply for a mortgage within the next few months and have applied for a few Agreement in Principals online (soft credit searches only). We have a 5% deposit and are hoping to buy the house we are currently renting and so would be using the Help to Buy mortgage guarantee as opposed to the Govt. loan scheme.

The AIPs were approved but each stated ‘ We can lend you maximum of X over a maximum of Y years with a minimum deposit of 15%....

The max amount each has said they would lend is approx. 42k more than we would need but they have both stated a minimum deposit of 15%. Both providers do offer H2B / 95% LTV mortgages.

My question is:

a) Having been approved in principal for £42k more than we would actual want to borrow, but with a minimum deposit of 15%... Would we be likely to still be approved for £40k less than the max they have offered, but with only a 5% deposit? (The house we are hoping to buy is Circa £185k)

b) Are there any mortgages providers that offer AIPs online for those looking to user H2B / 5% deposit?

I know we would be best to go in and see the bank in person for a 5% AIP but all have stated we would need to bring 3 months’ worth of statements and we’re currently still ‘tidying up’ our outgoings etc. so would rather wait another month.

Thanks in advance.

Tunnix

To clarify numbers - We have 10k deposit, and are looking to borrow £175k to purchase the house at £185k. Both AIPs have offered approx. £220k but with a minimum deposit of 15%.

We only want 175K. but with 5% deposit, how likely are we to still be approved for this?

G_M

I imagine if they've insisted on a 15% deposit, then they'll want a 15% deposit - hatever the property value/loan amount.

I would post your query on the mortgages forum, and also see an independant morgage adviser.

kingstreet

It sounds like affordability is good - hence the amount.

It sounds like your credit history isn't considered great - hence the maximum loan to value 85%.

You cannot exchange borrowing power for loan to value. You are not considered "safe" enough for above 85%.

You need to obtain all three versions of your credit file and put them in front of a broker to establish the situation before you do anything else.

Tunnix

We checked our Experian Scores last week - Mine is well into 'Good' and my partner's is 'Excellent'... I guess it's worth checking the others also, but we've always paid everything on time etc...

kingstreet

So what if the lenders you went to source from Equifax and there is something visible on there you don't know about?

The CRA "scores" are worthless as lenders calculate their own based on the credit data they got from the CRA and what's written on your application.

Get the files, hand them to a broker and let the broker work out what's needed.