First time buyer mortgage chances?

thagjsne

Hi all, just had a quick question about 90% mortgages at the moment, I've been advised by my broker that 90% mortgages are being rejected at a rate of up to 50% of applicants and has advised to go for an 85% mortgage as there is a much higher liklihood of being sussesfull, has anyone got any inside on this or are the rejections inflated? I am the sole provider in my house and 15% is a stretch but not unobtainable, thanks guys

MattMattMattUK

Your broker is likely accurate, although there will not be published data available to show it either way. The issue is if you go for 90% but are declined, that might well have an impact on getting an 85% mortgage. Have you also considered Help to Buy? If you only have 10% or a stretch to 15%, then that would reduce the LTV to 60-65% which will not only maximise your borrowing potential, but get you a much better rate.

thagjsne

MattMattMattUK said:

Your broker is likely accurate, although there will not be published data available to show it either way. The issue is if you go for 90% but are declined, that might well have an impact on getting an 85% mortgage. Have you also considered Help to Buy? If you only have 10% or a stretch to 15%, then that would reduce the LTV to 60-65% which will not only maximise your borrowing potential, but get you a much better rate.

Hi mat, thanks for the response, we are looking at a 24 year old house so have a HTB ISA but won't be eligible for the deposit scheme, with the way things are now new builds are being snapped up within weeks of release in my area, sound like 15% deposit is the only viable option.

Raffi2020

I can well imagine it to be true. It's a lender's market at the moment as there's so many mortgage applications and that, combined with the general uncertainty in the housing market, means lender's can tighten up, pretty much pick and choose applicants who meet their criteria and say no to the rest without much concern. 

Many of the 90% products are off the market at the moment, which goes to show you how little appetite there is. Seems there's a lot more option at 85%.