Noone likes my 5% Deposit

p00hsticks

spotty_dog343 said:

95% LTV using a 5% deposit. Only using 5% because that's how much I've saved so far, and I'd quite like to own a house ASAP. 

Presumably you also have the funds put aside to cover the conveyancing, survey, SDLT (or equivalent of not in England), mortgage arrangement fees etc.... ?

I'm afraid like others here, given the choice between buyers I'd definintely opt for one who's got a bit more financial wriggle room than being on a 95% LTV

spotty_dog343

p00hsticks said:

spotty_dog343 said:

95% LTV using a 5% deposit. Only using 5% because that's how much I've saved so far, and I'd quite like to own a house ASAP. 

Presumably you also have the funds put aside to cover the conveyancing, survey, SDLT (or equivalent of not in England), mortgage arrangement fees etc.... ?

I'm afraid like others here, given the choice between buyers I'd definintely opt for one who's got a bit more financial wriggle room than being on a 95% LTV

First-time buyer so no stamp duty! A separate pot of savings that covers conveyancing, surveys, and mortgage fees.

secla

The seller knows that with a low ltv you dont have the spare funds to make up your offer in the event of down valuation, which is more likely with an offer over scenario.

I’d imagine an estate agent may even advise them of this if they had multiple offers 

spotty_dog343

secla said:

The seller knows that with a low ltv you dont have the spare funds to make up your offer in the event of down valuation, which is more likely with an offer over scenario.

I’d imagine an estate agent may even advise them of this if they had multiple offers 

Yeah that's what I presumed. If the estate agent thought that, I'd rather of her not rung me to say was I still interested when the first buyers dropped out! Toying with my emotions  (*satire)

TBagpuss

They aren't "toying with your emotions" They are doing their job. 

You'd previously shown an interest / made an offer, so when the house became available again they asked you whether you were still interested.
You asked them what the offer that had been accepted was and they told you, but it doesn't sound as though you then made an offer yourself, so understandably, with no firm offer from you, they have re-listed. If you did repeat your offer then it may be that the seller isn't interested, or it may be that they want to see wht other offers they get before deciding. Either way it's not personal, they are just looking out for their own best interests. 

If you are still interested then you can still contact the aganets, tel them your offer is still on the table. 

That said, as someone with a 5% deposit you are a high risk buyer. You are at greater risk than someone with a !!!!!! deposit of being unable to make up the differene if the lender down values the property, at higher risk of the lender withdrawing your mortgage offer, and more likely to pull out or be unable / unwilling to 'meet in the middle'  if the survey throws up anything that might need work. So if you make an offer and someone else who is in a stronger position offers the same amount,then the seller is more likely to go with the other buyer, becaue that makes much better sense or them.

spotty_dog343

TBagpuss said:

They aren't "toying with your emotions" They are doing their job. 

You'd previously shown an interest / made an offer, so when the house became available again they asked you whether you were still interested.
You asked them what the offer that had been accepted was and they told you, but it doesn't sound as though you then made an offer yourself, so understandably, with no firm offer from you, they have re-listed. If you did repeat your offer then it may be that the seller isn't interested, or it may be that they want to see wht other offers they get before deciding. Either way it's not personal, they are just looking out for their own best interests. 

If you are still interested then you can still contact the aganets, tel them your offer is still on the table. 

That said, as someone with a 5% deposit you are a high risk buyer. You are at greater risk than someone with a !!!!!! deposit of being unable to make up the differene if the lender down values the property, at higher risk of the lender withdrawing your mortgage offer, and more likely to pull out or be unable / unwilling to 'meet in the middle'  if the survey throws up anything that might need work. So if you make an offer and someone else who is in a stronger position offers the same amount,then the seller is more likely to go with the other buyer, becaue that makes much better sense or them.

The comment about toying with the emotions was just meant in a light-hearted way! 

I asked about the accepted offer and the reply was "they were all in the same region", so I never really found the exact offer price. 

Absolutely understand they have their own best interests in mind, as do I. I am playing the game too, I also have another offer on a house and I am continuing to go for house viewings and put offers on others. 

I posed the OG question on here because I was interested in finding out if there was anything else I could do to aid a 5% deposit. I will take everyone's advice into consideration! 

Deedoodee

Buy a cheaper house to increase your % deposit or buy in less competitive area? 

the higher your LTV, the more concerned the bank will be about the valuation/ house price. A 5% deposit means the bank is fronting 95% of the money and more likely to be affected by any price drop than a 10% deposit. 

if she accepts an offer from someone for the same price or even a bit lower, but that person has a large deposit, they’re more likely to get the required mortgage for it because the bank has to pay up less. And even if the price is above the bank’s valuation, a higher deposit gives that person more room to pay up the difference if they want. 

RelievedSheff

spotty_dog343 said:

TBagpuss said:

They aren't "toying with your emotions" They are doing their job. 

You'd previously shown an interest / made an offer, so when the house became available again they asked you whether you were still interested.
You asked them what the offer that had been accepted was and they told you, but it doesn't sound as though you then made an offer yourself, so understandably, with no firm offer from you, they have re-listed. If you did repeat your offer then it may be that the seller isn't interested, or it may be that they want to see wht other offers they get before deciding. Either way it's not personal, they are just looking out for their own best interests. 

If you are still interested then you can still contact the aganets, tel them your offer is still on the table. 

That said, as someone with a 5% deposit you are a high risk buyer. You are at greater risk than someone with a !!!!!! deposit of being unable to make up the differene if the lender down values the property, at higher risk of the lender withdrawing your mortgage offer, and more likely to pull out or be unable / unwilling to 'meet in the middle'  if the survey throws up anything that might need work. So if you make an offer and someone else who is in a stronger position offers the same amount,then the seller is more likely to go with the other buyer, becaue that makes much better sense or them.

The comment about toying with the emotions was just meant in a light-hearted way! 

I asked about the accepted offer and the reply was "they were all in the same region", so I never really found the exact offer price. 

Absolutely understand they have their own best interests in mind, as do I. I am playing the game too, I also have another offer on a house and I am continuing to go for house viewings and put offers on others. 

I posed the OG question on here because I was interested in finding out if there was anything else I could do to aid a 5% deposit. I will take everyone's advice into consideration! 

Unfortunately with only a 5% deposit you are just not a very attractive buyer. Can you increase that deposit at all?

If you can get to 10% by using extra savings or looking at cheaper properties then your offers are likely to be taken more seriously.

spotty_dog343

Thanks everyone for your advice! I've been saving 11 months, hence only the 5% deposit. I would like to purchase a house imminently, but if it doesn't happen it will probably be another year till I can have 10% at the top end of my affordability. 

Richiem1987

Suggested many times before, you want to have 20-25% of the accepted offer of the property saved, to cover you in the event of a lender down valuing a property, as would have proved to the vendor, that unless it is a big adjustment, you can make up the difference, even if that results in a 95% LTV on the Mortgage. It gives you wriggle room. Only having 5% available has absolutely no wriggle room and you are a risk to a chain collapsing.