95% LTV Mortgages

FOGGY1974

Hi all. I hope you can help. We are saving for a deposit to buy the house we are renting, trouble is I see most banks etc are not doing 95% LTV Mortgages any more. What can we do if we have not got enough deposit for a 80 - 85% LTV mortgage?
The house is currently going through Probate as the current owner passed away, this should be sorted by around July and we have a rental agreement till mid July. 

Slithery

FOGGY1974 said:

What can we do if we have not got enough deposit for a 80 - 85% LTV mortgage?

Carry on saving until you do...

md258

My guess (with no insider knowledge) is that as the government eases the restrictions, 95% LTV mortgages will become available again.
Is the property currently on the market? If not, you've probably got time, if it is, they won't be able to sell it (except to a landlord) until you leave, which doesn't have to be July if you switch over to a periodic tenancy.

steampowered

Personally I would not take out a 95% mortgage at the moment. If house prices fall just 5%, then unless you can overpay your mortgage you'll be in negative equity - left unable to move house and paying a rip-off standard variable rate when your initial mortgage term finishes. 

You could:
- Try to negotiate the price down, which will give you a better LTV. As this is a probate sale it's possible that the sellers might be willing to give you a good price if you make it easy for them and are ready to proceed quickly. Realistically they are going to struggle to find a buyer in this climate. 
 - Rent a different property, keep saving and buy somewhere else in a year or two year's time.
- Buy a cheaper property.

FOGGY1974

md258 said:

My guess (with no insider knowledge) is that as the government eases the restrictions, 95% LTV mortgages will become available again.
Is the property currently on the market? If not, you've probably got time, if it is, they won't be able to sell it (except to a landlord) until you leave, which doesn't have to be July if you switch over to a periodic tenancy.

md258 said:

My guess (with no insider knowledge) is that as the government eases the restrictions, 95% LTV mortgages will become available again.
Is the property currently on the market? If not, you've probably got time, if it is, they won't be able to sell it (except to a landlord) until you leave, which doesn't have to be July if you switch over to a periodic tenancy.

Hi md258. 
The property is not on the market as the lady who has power of attorney gave us first refusal. The property has been valued at 185k and she has been told she can get between 180 - 185k. For probate reasons it has been valued at 175k as the kitchen needs updating. She said we can have the house for 175k which is probate value. We did cheekily offer 160k but she said she told us we can have it for 175k. I am not sure she will extend the tenancy as she will want to sell the house as soon as she can. 

FOGGY1974

steampowered said:

Personally I would not take out a 95% mortgage at the moment. If house prices fall just 5%, then unless you can overpay your mortgage you'll be in negative equity - left unable to move house and paying a rip-off standard variable rate when your initial mortgage term finishes. 

You could:
- Try to negotiate the price down, which will give you a better LTV. As this is a probate sale it's possible that the sellers might be willing to give you a good price if you make it easy for them and are ready to proceed quickly. Realistically they are going to struggle to find a buyer in this climate. 
 - Rent a different property, keep saving and buy somewhere else in a year or two year's time.
- Buy a cheaper property.

Hi. 
The house has been valued at 185k. The lady who has power of attorney has been told she can expect to get between 180 - 185k but for probate reasons they have valued the house at 175k because the kitchen needs updating. We did cheekily offer 160k but she said she told us we can have it for 175k. I do want a mortgage where we can overpay to get it paid off quicker.
If we can't buy this house then we will have to rent another place for a while and try to find another property to buy. 

MovingForwards

A 95% mortgage will require a physical valuation, that's why lenders are not offering them.

You need to keep saving to increase your deposit
Or
Ask parents / siblings / grandparents to give you the difference to make the deposit up to what lenders are lending
Or
Look into springboard mortgages, if parents have their own property

It takes a while for property purchases / sales to go from offer/acceptance to completion. Then you have the extra wait due to the seller needing probate.

blue_max_3

If you're buying without an estate agent, she is saving maybe £3k. The probate valuation should be an accurate assessment. If it was valued at £185k then that is what should go on the probate form!
Anyway, I'd go back at £165k and tell them that's the most you can stretch to and mention the lack of fees and the fact that you are already in. That's if you're able to get a mortgage. A good broker often has access to deals that aren't mainstream. May be worth checking with some.

FOGGY1974

MovingForwards said:

A 95% mortgage will require a physical valuation, that's why lenders are not offering them.

You need to keep saving to increase your deposit
Or
Ask parents / siblings / grandparents to give you the difference to make the deposit up to what lenders are lending
Or
Look into springboard mortgages, if parents have their own property

It takes a while for property purchases / sales to go from offer/acceptance to completion. Then you have the extra wait due to the seller needing probate.

Hi. 
The house was valued before the virus took hold, I personally think the valuation is too high but I am not an expert. We are saving more every month and will have 5% deposit and money for fees by July. We have not had much time to save because we was not expecting the house to be sold yet.
None of my relatives will be able to lend us the money to make up the difference. We have sent all our info to a mortgage adviser but he said before corona virus there were a couple of hundred lenders but not there are 24 he can use. 

FOGGY1974

blue_max_3 said:

If you're buying without an estate agent, she is saving maybe £3k. The probate valuation should be an accurate assessment. If it was valued at £185k then that is what should go on the probate form!
Anyway, I'd go back at £165k and tell them that's the most you can stretch to and mention the lack of fees and the fact that you are already in. That's if you're able to get a mortgage. A good broker often has access to deals that aren't mainstream. May be worth checking with some.

Hi. 
I think she has to use an estate agent as it is being sold under probate ( not quite sure how it works ) so she will still have to pay the fees. We have sent our details to a mortgage adviser but he said before corona virus there were a couple of hundred lenders but now there are only about 24 he can choose from that do 95% LTV mortgages, that was the beginning of the week and it seems more lenders are pulling out of 95% LTV mortgages. 

blue_max_3

OK, I didn't know that. Not sure why though. I am currently selling a house under probate and chose to use an agent, but as long as there is no connection (friend/family) to suggest it's being sold under market value to avoid inheritance tax, then I can't see the issue. You may not get 95%, but you don't know the valuation - though they have tended to be closely linked to the purchase price in my very limited experience. Hope you get lucky!