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    • Essential1
    • By Essential1 14th Oct 19, 10:54 PM
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    Essential1
    How to get 95 percent mortage?
    • #1
    • 14th Oct 19, 10:54 PM
    How to get 95 percent mortage? 14th Oct 19 at 10:54 PM
    I really need to move out of family house but not sure what I can do as a single male. I've heard if all I need is 5 percent deposit does that mean they would accept 7000 deposit on a 140,000 flat even if my annual income is low? like im only going to make 19200 a year but I heard I could still get a deposit I this situation.
Page 1
    • phillw
    • By phillw 14th Oct 19, 11:07 PM
    • 3,111 Posts
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    phillw
    • #2
    • 14th Oct 19, 11:07 PM
    • #2
    • 14th Oct 19, 11:07 PM
    I really need to move out of family house but not sure what I can do as a single male. I've heard if all I need is 5 percent deposit does that mean they would accept 7000 deposit on a 140,000 flat even if my annual income is low? like im only going to make 19200 a year but I heard I could still get a deposit I this situation.
    Originally posted by Essential1
    I think you'd be lucky borrowing 7 times your salary. You'd need to either buy with a friend or go for shared ownership.
    • boo_star
    • By boo_star 15th Oct 19, 12:45 AM
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    boo_star
    • #3
    • 15th Oct 19, 12:45 AM
    • #3
    • 15th Oct 19, 12:45 AM
    I think you'd be lucky borrowing 7 times your salary. You'd need to either buy with a friend or go for shared ownership.
    Originally posted by phillw
    Lucky? I'd say it's out of the question.

    5x is pushing it based on my experience.
    • Essential1
    • By Essential1 15th Oct 19, 12:49 AM
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    Essential1
    • #4
    • 15th Oct 19, 12:49 AM
    • #4
    • 15th Oct 19, 12:49 AM
    Most of the flats I looked at were Shared Ownership but would they consider me?
    • boo_star
    • By boo_star 15th Oct 19, 12:59 AM
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    boo_star
    • #5
    • 15th Oct 19, 12:59 AM
    • #5
    • 15th Oct 19, 12:59 AM
    Most of the flats I looked at were Shared Ownership but would they consider me?
    Originally posted by Essential1
    At 7x income or 3.5x?
    • ACG
    • By ACG 15th Oct 19, 8:20 AM
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    ACG
    • #6
    • 15th Oct 19, 8:20 AM
    • #6
    • 15th Oct 19, 8:20 AM
    You only need a 5% deposit in order to purchase the property.
    However your income will only allow you to obtain a certain amount.

    If your income supports the other 95% of the purchase price, great. If it does not, then you need a bigger deposit.

    On 20k a year, you are unlikely to get more than 90k with a 5% deposit. It sounds like a 140k purchase price is going to be unlikely without a minimum of 30k deposit.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Mortgage_Adviser
    • By Mortgage_Adviser 15th Oct 19, 11:18 AM
    • 325 Posts
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    Mortgage_Adviser
    • #7
    • 15th Oct 19, 11:18 AM
    • #7
    • 15th Oct 19, 11:18 AM
    To add to the above, if buying through one of the schemes such as shared ownership, help to buy etc the maximum amount you can borrow with your salary will be massively reduced by the rent/equiry loan payments you will have to pay every month as the mortgage lender will take those in to their affordability assessment.
    • Essential1
    • By Essential1 15th Oct 19, 8:34 PM
    • 10 Posts
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    Essential1
    • #8
    • 15th Oct 19, 8:34 PM
    • #8
    • 15th Oct 19, 8:34 PM
    Wow well at least I know now. I'm !!!!ed then right. Even renting a decent flat I'm !!!!ed?
    • Somerset La La La
    • By Somerset La La La 15th Oct 19, 9:50 PM
    • 793 Posts
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    Somerset La La La
    • #9
    • 15th Oct 19, 9:50 PM
    • #9
    • 15th Oct 19, 9:50 PM
    I don't earn much more than that and agree it is really hard, mostly due to Loan to Income multiples IMO.

    As above, I'd say 5x on a "normal" purchase at an absolute push - if you're a good quality case with a bit of BDM support or a smaller/specialist lender. Mainstream lenders wouldn't even touch it at 5x LTI IMO.

    So add in 7k deposit and you're looking at just over 100k Purchase Price. If you're somewhere like the North East, then it's likely. South East, no chance.

    With Shared Ownership you can't borrow more than 4.5x your salary, regardless of rent payments. I believe HTB scheme has the same cap. Plus a "agent" affordability check which may be harsher than a lender's ("living costs" can't exceed 45% of income etc. etc.)

    Have a play with some calculators. e.g. Buying 40% of a 150k flat would cost 60k. You put in 6k deposit = 10% of share. Mortgage of c. 54k and rent of approx 200pm.

    I say 40% as I believe for a < 50k mortgage it'll be very hard if you're "only" buying 25% and I've had 40% for < 50k in my head from a lender's criteria for a while.

    There is a very good s/o broker on here who it may be worth having a chat with if you're in a cheaper area of the country.

    Have you thought about buying with friends/family and/or getting friends/family to help with a deposit/guarantor type mortgage?

    Plus unless you're very settled in the area and in your job, buying may not be the best option anyway - what if you meet somebody or want to move area? Costs rack up and if you own a small flat/small share of a flat you could well lose money. I do completely understand renting seems like dead money at times though!
    Work in Underwriting (Mortgages) - posts are my opinion/experience etc, not official company policy/lending rules.

    Only the underwriter assigned to a case at full application stage can give a 100% definitive answer to queries
    • Essential1
    • By Essential1 16th Oct 19, 4:56 PM
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    Essential1
    I'm in West London. Even renting something different for around 900 may be hard based on my annual income.
    • julicorn
    • By julicorn 16th Oct 19, 6:02 PM
    • 846 Posts
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    julicorn
    With that salary and in London (and as what seems to be your first time living away from your family if I'm reading it right?) renting a room in a house share seems a more sensible option.
    Original mortgage: December 2017, 203,495
    MFW start: April 2018, 201,800
    Current: 157,700
    • Davy Jones II
    • By Davy Jones II 16th Oct 19, 8:55 PM
    • 411 Posts
    • 756 Thanks
    Davy Jones II
    Wow well at least I know now. I'm !!!!ed then right. Even renting a decent flat I'm !!!!ed?
    Originally posted by Essential1
    Three bedroom house, 45,000

    https://www.rightmove.co.uk/property-for-sale/property-63337779.html

    Two bedroom flat, 280 per month,

    https://www.rightmove.co.uk/property-to-rent/property-72930511.html

    You could buy one and rent the other on your wage.
    • Somerset La La La
    • By Somerset La La La 16th Oct 19, 9:57 PM
    • 793 Posts
    • 284 Thanks
    Somerset La La La
    In that area I think even Shared Ownership (alone) is going to be pretty much impossible then unless you can get a very high deposit (maybe buy a share in Cash and staircase up) or are prepared to move away and commute in.

    Realistically I agree with renting a room if you're looking for something reasonable in the near future.
    Work in Underwriting (Mortgages) - posts are my opinion/experience etc, not official company policy/lending rules.

    Only the underwriter assigned to a case at full application stage can give a 100% definitive answer to queries
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