Deposit at Exchange 95% LTV

HopefulFTB

Hi All,

Mid way through the purchase of our first property. We have a 5% deposit and have received our mortgage offer on a 95% LTV mortgage with Nationwide. So all of the mortgage side for us is complete and ready to go.

Solicitors have started work after receiving the draft contract from the seller's solicitor's. They have raised enquiries with their solicitors. I picked up on the fact that it states that a 10% deposit must be paid on exchange of contracts. Now, we went for a 95% LTV mortgage because we have only a 5% deposit - I didn't know that it is common practice for a 10% figure to change hands, I assumed you paid over whatever deposit you were putting towards the purchase from your own funds. (In my mind if it's £10k or £100k, if it's all you've got you're not going to gamble it)

I have raised it with our solicitors who have put it to their solicitors and we are now awaiting a response. I know people will say wait and see, but is it common for the seller's to be flexible in our situation? With 95% LTV products around, surely this must be fairly common?

Does anyone know what alternatives we may have if the seller's turn around and say no? If it's simply a case of stumping up more cash to put towards it, the sale is over because we don't have the capital to do it.

We've met the seller's and ended up spending a couple of hours talking with them about all sorts of things as if we'd known them for years! Very nice friendly people, but at the end of the day it's a business transaction so they obviously have to protect their own interests.

If anyone wants to comfort me with some soothing words, I'd be grateful!

PDF

It shouldn't be a problem and is fairly common. We had the exact same situation including the mortgage company this time last year. The vendors won't want to start fresh with a new buyer.

HopefulFTB

Thanks PDF, that's what my head i's telling me. Good to hear that it worked out in your case! Thank you for taking the time to reply.

Jasperella

We recently purchased our first house, incidently we had a 95% LTV, also with Nationwide. I too started reading things where it referred to the 10% deposit on exchange and panicked thinking we can't exchange we only have 5%! But of course it was perfectly fine and normal! We just transferred our entire deposit over to the solicitors and that was that!
So don't worry :-)

HopefulFTB

Thanks Jasperella! That's great to hear! How did you find Nationwide's application process? At 95% LTV, I was expecting thorough interogation, all of our bank statements going over with a fine tooth comb etc. But we went from application on the Thursday, valuation booked on Friday morning which took place on the following tuesday and a text to say the mortgage offer was in the post on the Wednesday. Only thing they requested was 1 payslip each and our child benefit letter. It went from offer to application in 6 days, I couldn't believe it so I'm hIping that our luck isn't going to run out!!

I'd read all sorts of stories so expected the worst!

Jasperella

We had a very easy process with them too! I was very impressed and if I recall rightly it was only one payslip from each of us they wanted! We had a broker do our application etc.
We went through the process twice as we pulled out the first purchase. We had a bit of a wait for our valuation/home buyers report slots-both times it was nearly 2 weeks but then we got the text of mortgage approval on the day the first time, and the day after the second time! After having the approval on the day the first time round I was sooo nervous when it didn't come through on the day on the 2nd application! But it was all fine obviously just me fussing that they weren't as quick that time!
The only minor thing that happened was Nationwide charged £10 for something to do with the funds transfer on completion day that we werent expecting but other that they were great!

Jasperella

The whole house buying process from offer accepted to completion day was 5 weeks 6 days for us with no chain, we bought a probate house and we've been living here 5 weeks now! We had a very last minute exchange/completion finalised with searches back on a Wednesday, funds requested from nationwide, met with solicitor to go over contract on the Thursday late afternoon, and contracts exchanged and completion on the Friday morning!