95% Mortgage for 19 year old - Advice

navidson

Hello all - My stepson is currently exploring the possibility of moving out of the home and getting a mortgage on a flat with his partner.  He has steady full-time employment and earns a decent amount - and his credit score is over 900.

He has enough of a deposit saved up to cover 5% of the property - and has started to look at signing up for a 95% mortgage.  However, he has been discouraged whenever he has tried to make an application as each bank has only offered the 90% option (even though they stated that 95% would be available before application was made)

Is anybody aware of any banks/lenders that currently offer 95% mortgage deals for young people?  He has tried using the usual aggregators (Compare the Market etc) but they seem to have led him down the garden path with their suggestions?

Thanks in advance!

silvercar

he needs a whole of market mortgage broker, rather than a comparison site.

la531983

navidson said:

and his credit score is over 900.

Just to say, this is totally irrelevant as nobody sees it.

Exodi

"A mortgage scheme designed to increase the number of deals available to homebuyers with a low deposit or limited equity has now ended. Several major lenders took part in the Government's mortgage guarantee scheme – which ran until June 2025 – where want-to-be homeowners had better access to 95% mortgages."

https://www.moneysavingexpert.com/mortgages/new-mortgage-scheme-for-5-deposit/

Since the government is no longer offering to absorb most of the potential losses of these mortgages as of the end of June, unsurprisingly they're being pulled. Apparently something should replace it, but I wouldn't hold your breath.

95% LTV mortgages do exist without the guarantee, but the interest rate will inevitably be hefty due to the significantly increased risk of negative equity from house price movements.

eddddy

navidson said:

 and his credit score is over 900.

la531983 said:

Just to say, this is totally irrelevant as nobody sees it.

It's not at all irrelevant - but it's only part of the picture.

The credit reference agency use a calculation formula that summarises your credit history and financial behaviour.  e.g. have you missed payments, do you make late payments, have you got CCJs etc.

A mortgage lender will look at those same factors, and will probably use a similar calculation formula as part of their scoring.


But a mortgage lender will also look at things like affordability (income vs outgoings), job stability (employed vs self-employed, time in a job, etc), and other stuff.

So if you have a good credit history (indicated by a good credit score), that's probably one box ticked.

If you have a bad credit history (indicated by a bad credit score), you're likely to have problems.

la531983

eddddy said:

navidson said:

 and his credit score is over 900.

la531983 said:

Just to say, this is totally irrelevant as nobody sees it.

It's not at all irrelevant

Well it is, bankrupts can have a made-up credit score of over 900. Means absolutely nothing on its own.

kimwp

I had a whole of market financial advisor for buying my house - he talked me through the whole process and was able to provide immediate assurance to the estate agent when there was a bidding war and I offered a higher amount. I did all my remortgages using price comparisons, but I'll probably use an ifa if I move house.

Personally I would save longer to buy a house, flats seem to have a lot of potentially variable costs if maintenance/repair is required to the building.

silvercar

kimwp said:

I had a whole of market financial advisor for buying my house - he talked me through the whole process and was able to provide immediate assurance to the estate agent when there was a bidding war and I offered a higher amount. I did all my remortgages using price comparisons, but I'll probably use an ifa if I move house.

Personally I would save longer to buy a house, flats seem to have a lot of potentially variable costs if maintenance/repair is required to the building.

I would have thought a whole of market independent mortgage broker would be better placed to advise in this situation , rather than an IFA

_Penny_Dreadful

navidson said:

Hello all - My stepson is currently exploring the possibility of moving out of the home and getting a mortgage on a flat with his partner.  He has steady full-time employment and earns a decent amount - and his credit score is over 900.

He has enough of a deposit saved up to cover 5% of the property - and has started to look at signing up for a 95% mortgage.  However, he has been discouraged whenever he has tried to make an application as each bank has only offered the 90% option (even though they stated that 95% would be available before application was made)

Is anybody aware of any banks/lenders that currently offer 95% mortgage deals for young people?  He has tried using the usual aggregators (Compare the Market etc) but they seem to have led him down the garden path with their suggestions?

Thanks in advance!

My guess is that whilst mortgage lenders do offer 95% LTV mortgages your step son doesn’t pass affordability. I’m not sure of his employment situation but I imagine as a 19 year old his salary isn’t that high, or at least not high enough to sustain a 95% LTV mortgage. 

eddddy

la531983 said:

eddddy said:

navidson said:

 and his credit score is over 900.

la531983 said:

Just to say, this is totally irrelevant as nobody sees it.

It's not at all irrelevant

Well it is, bankrupts can have a made-up credit score of over 900. Means absolutely nothing on its own.

Ummm... is there something in my post that you disagree with?

It looks like you're now agreeing with me. 

I said "but it's only part of the picture" and you are now saying "Means absolutely nothing on its own" - so aren't you now saying the same thing as me?

Hoenir

The type of property i.e. flat might be an issue as well. What's the potential purchase price of a property?  5% may not provide the lender with much comfort in terms of equity.