650k 95% LTV?

SpicySausages

Hi all,

I'm looking to buy with my partner in about 6 months time. For various reasons we don't have that much deposit relative to our income, and some debt.

I'm aware we could continue to save for 10% in a reasonable amount of time, I'd just like to know if a 95% mortgage is an option, particularly for a property over 600k.

Combined income about £235k
9k on 0% credit card
15k left on a loan 
35k deposit
Clean credit reports

Any help much appreciated. 

SpicySausages

And 3 kids

ACG

There are lenders, according to our sourcing system if I leave it completely open without adding any filters (product types, affordability, debt etc) there are 8-9 lenders, we have access to about 80, so its quite a small pool of lenders. 

There are a few issues to check - affordability (I suspect this will be fine), whether an underwriter is happy with the situation as a whole and where looking at a lender who credit scores, if it is likely to pass that. 

I think you need a broker really. But despite the above, there is some potential it is just not a given. 

I think your situation as a whole might come in to play. If you are renting for £1k a month and the new mortgage is £3k a month thats going to be hard for an underwriter to justify, but the flip side might be that you have both recently had pay rises from say £70k a year to £115k a year, in which case it helps the situation... The details are probably going to be what makes or breaks the application. Which is why I think you need to sit down with a broker really. 

jimjames

I can't answer about the LTV but it would definitely be worth looking at budgets with that income and only £11k of net savings to see if you can boost the deposit.

SpicySausages

Thank you both. Not impossible then, we are going to be very frugal for the next 6 months to boost the deposit as much as possible.

Thanks again 

DullGreyGuy

The other consideration will be the type of property... ours was a 95% LTV on a circa £600k property and the broker initially put us to one lender only to subsequently note that they had a £500k cap on flats so had to change lender but got the mortgage secured without issue

CSL0183

Couldn’t you just take out another £25k loan to give you your £60k 10% deposit? 

The now £40k loan debt you will have is relative peanuts in the grand scheme of your combined earnings, all that happens is they adjust it from your combined earnings so instead of perhaps a 4x multiple as max borrowing; you might only get 3.5x which is still significantly more than what you are after. 

This would surely open up a lot more lenders in the 90% market?

Hoenir

Stamp duty alone is going to set you back £17,500 alone. Time to be frugal. 

ACG

CSL0183 said:

Couldn’t you just take out another £25k loan to give you your £60k 10% deposit? 

The now £40k loan debt you will have is relative peanuts in the grand scheme of your combined earnings, all that happens is they adjust it from your combined earnings so instead of perhaps a 4x multiple as max borrowing; you might only get 3.5x which is still significantly more than what you are after. 

This would surely open up a lot more lenders in the 90% market?

Noooo, this will reduce your pool of lenders even more than than you currently have. A deposit from a loan is not going to fly with 99% of lenders.