95% Mortgage?

GMac14

Hi All

How difficult is it in the current financial climate to get a 95% mortgage?

Wife has fabulous credit history, mine is a little patchy. No CCJs, one default for £950 which will be paid off in full within next 3 months or so. Currently have 3 credit builder credit cards which I just use for fuel and pay off in full each month. Settled Payday loans which still show on credit file from 5.5 years back so will be due to fall off credit file when looking for mortgage.

Probably looking for mortgage next year as currently saving so expect the default to have been paid/settled for a 12 month period by the time I apply. Wife has £10k due to her from share of equity for Exes house but he is in no rush to sell and any attempt to push him on this results in him digging his heels in and being awkward.

So, next year aiming to have close to £10k saved, looking at houses circa £155k so £7,750 for 5% deposit or £15,500 for 10% if the money comes through. I know I am forward planning 12 months ahead and no one has a crystal ball as such, but seems like situation with mortgages doesnt look like it will change anytime soon, hence trying to find out if there are mortgages available at 95% or if 90% mortgage is really the only option?

Thanks in advance.

Grezz24

Take a look at the help to buy scheme for first time buyers, you need a 5% deposit and the govt give you a 20% equity loan, meaning you only need a 75% mortgage.

you have interest free for 5 years on the 20% with the repayments being interest only afterwards - then when you do sell the govt get 20% of sale price.

GMac14

Both had mortgages and property in the UK previously, so not classed as first time buyers.

kingstreet

HTB Equity Loan IS newbuild only and is NOT FTB only.

GMac14

Thanks kingstreet, thats good to know. Prefer not buy a new build but in my position it looks like a darn good option. Is this available with all building companies with it being a Government scheme?

kingstreet

No. The builder has to sign up to it.

Grezz24

the majority of building companies are part of the scheme, all the ones i have seen so far in the area we are looking to buy are signed upto it.

GMac14

good to know, how about the original question, is it tough at the minute to get a 95% mortgage/are lenders preferring 10% deposits?

elverson

Is having three parallel credit cards better than just one for credit purposes?

juniordoc

You will get a much better mortgage rate and will find it easier to secure a mortgage with a 10% deposit. Worth holding out for probably unless you have very high rent costs

GMac14

Not sure if three cards is better than one, all low limits, £200,£250 and £300 so will request credit limit increase after 6 months use, just rotate the 3 and maybe put £50 per month on each one then clear in full.

WRT rent, its low and enabling us to save, but its a small property. £500 per month in North West so I can save £400 per month, wife can save £300 (not got around to joint account yet) plus £250 a month going to clear wifes credit card (0% balance £2k).

So yes it makes sense to stay as long as possible but its 2 bedroom, one downstairs room, hall and kitchen with tiny rooms/garden and one car drive, so for us 2 plus a 5 year old, getting a little cramped.

I guess the aim is to get to a 5% deposit, then speak to a broker re options and keep saving in the aim to get maybe 6/7% together or get closer to a 10% deposit.