First time buyer

Emmia

https://forums.moneysavingexpert.com/discussion/comment/81922063#Comment_81922063

But the house is not yours to sell or decide on. Yes you can advise, but you really shouldn't decide unilaterally. Do you have POA?

The fact someone is elderly, doesn't mean they lack the competence to make these decisions.Your uncle might decide he would prefer to sell to a particular FTB for some reason.

I know someone who accepted a slightly lower offer on their house as he wanted to sell to a couple with children.

mills112

https://forums.moneysavingexpert.com/discussion/comment/81922076#Comment_81922076

he is the one that wants me to make decisions for him, lol. I have managed to get him more money for his house so i think he has made the right decision.

in any case, this post is not about who should be making the decisions, it is about whether 5% deposit is too low.

Emmia

https://forums.moneysavingexpert.com/discussion/comment/81922112#Comment_81922112

It's not too low - if the bank will lend the money, the deposit size isn't really any of your business.

mills112

https://forums.moneysavingexpert.com/discussion/comment/81922121#Comment_81922121

yes, that is what the replies are saying. i am not used to people using 5% to buy a property so i was very surprised that the buyers were using this.

maybe the properties I am used to aren't first time buyer properties so the deposit is higher, but the answer appears to be that 5% deposit is not something that should be considered a disadvantage as long as they can raise the mortgage.

Emmia

https://forums.moneysavingexpert.com/discussion/comment/81922130#Comment_81922130

You know 100% mortgages are also available, from places like Skipton for FTBs

mills112

https://forums.moneysavingexpert.com/discussion/comment/81922137#Comment_81922137

i thought they stopped 100% mortages years ago because of people taking on more than they can afford. i am surprised to hear that FTB can get 100% mortgages.

i remember you could get 105% mortgages so you can use the extra 5% to buy stuff for the house or go on holiday! that was what collapsed the housing market when interest rates went up and people end up in negative equity. since then, the banks have become more cautious and need you to put down a significant deposit.

i wasn't even aware you could put down 5% deposit until this house as I have never come across anyone offering 5% deposit before on the properties that we have sold. even 10% is really low as our buyers tend to be paying 20%-40% deposit, even if they are first time buyers, but then again our properties are in London, where property price is so high, you can't raise enough mortgage with a 5% deposit.

Yorkie1

If you haven't come across many people with 5% mortgages, then you probably aren't as experienced in this area as you assume.

kingstreet

https://forums.moneysavingexpert.com/discussion/comment/81921857#Comment_81921857

If the property is downvalued you're likely to find the buyer wanting to renegotiate the price, not allocating part of their deposit to paying more than the surveyor's value.

mills112

https://forums.moneysavingexpert.com/discussion/comment/81922287#Comment_81922287

i have sold quite a few properties in my time but it is in London so 5% deposit is not heard of for properties in London as that would mean you have to be earning mega bucks and if you were, you are likely to have a lot of cash anyway to pay a higher deposit and get a better mortgage deal.

mills112

https://forums.moneysavingexpert.com/discussion/comment/81922612#Comment_81922612

true. but the survey can also bring up works and if the buyer has a cushion, they are able to absorb more and so don't need so much of a reduction.

i find people often want to go ahead with a property even if the surveyor has valued it less than the offer price because the surveyor valuation will tend to be on the pessimistic side for the bank lending and don't always reflect the true market value of a property. the bank may also value it less than the buyer own surveyor, so it is a juggle exercise when it comes to property purchase. often it boils down to how much the buyers can dig up.

i have seen surveyor valuation that is well below what the property is worth because they take into account the cost of the refurbishment, which they will tend to overestimate. the buyers may be able to source cheaper works and can do a lot of it themselves.

so someone with more money has more manouvreabiltiy (spelling!)