Noone likes my 5% Deposit

spotty_dog343

Richiem1987 said:

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. 

Yeah, I'll just keep saving until I eventually get a house with whatever % I have. 

Richiem1987

spotty_dog343 said:

Richiem1987 said:

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. 

Yeah, I'll just keep saving until I eventually get a house with whatever % I have. 

I know it sounds bad and it is fustraining, but I took that advice of someone else, saved for a bit longer and could cover a 10% adjustment. My actual deposit being 14% (kept the other 6% for other expenses in the end) which made up the 20% I had put aside. 

housebuyer143

Richiem1987 said:

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. 

If everyone waited until that they would never get on the ladder. A surveyor values it that much lower and you would want to find another house. 
10% is a fair deposit for a first time buyer in my opinion.

secla

It’s totally possible to get a house with a 5% deposit, but offering over valuation isn’t going to be the way to go.
perhaps that will mean looking at less desirable houses or ones that need a little more work.

as soon as you start offering over to secure a house your increasing the risk of getting undervalued with no way of making up the difference 

spotty_dog343

secla said:

It’s totally possible to get a house with a 5% deposit, but offering over valuation isn’t going to be the way to go.
perhaps that will mean looking at less desirable houses or ones that need a little more work.

as soon as you start offering over to secure a house your increasing the risk of getting undervalued with no way of making up the difference 

I did just that and offer accepted today! 

onetimeatponycamp

There are a lot of comments on here about needing a large deposit but don’t give up hope!

I’ve had two offers accepted now with a 5% deposit. In both cases when I made the offer I sent through my DIP and proof of funds of deposit. I didn’t highlight that it was 5% but it was obvious from my savings statements that it wasn’t 10%. I also sent an email to each seller saying how I liked the property and how I am a first time chain free buyer and keen to move quickly but flexible. 

When you make your offer I would focus on emphasising how you are chain free and able to move quickly, and only answer the question about deposit value if it comes up. The first offer I made I don’t think they actually asked how much I had.

jonnydeppiwish!

spotty_dog343 said:

secla said:

It’s totally possible to get a house with a 5% deposit, but offering over valuation isn’t going to be the way to go.
perhaps that will mean looking at less desirable houses or ones that need a little more work.

as soon as you start offering over to secure a house your increasing the risk of getting undervalued with no way of making up the difference 

I did just that and offer accepted today! 

That’s great news - thanks for coming back and letting us all know.
Keep up the saving whilst in the buying process and DO NOT buy any furniture etc for your new home until you are actually in it. Yes, it might be uncomfortable on a blow up bed but but it means you’ll get the best start.

GLWS!