Enjoy the Benefits of 95% Mortgages
Owning Your Dream Home Sooner: Unveiling the Benefits of 95% Mortgages and How a Mortgage Broker Can Help
For many aspiring homeowners, the biggest hurdle is saving a substantial deposit. This is where 95% mortgages, also known as high loan-to-value (LTV) mortgages, come in. However, securing one requires careful consideration and often the guidance of a skilled mortgage broker.pen_spark
95% mortgages are back and this is good news for all first-time buyers with a smaller deposit who’re looking to get onto the property ladder with a 5% deposit.
With a deposit at this level, you can move away from renting or living with family as soon as possible and have your very own place you can call home.
What is a 95% mortgage?
A 95% mortgage, also known as a 95% loan-to-value (LTV) mortgage, is a mortgage to purchase a property with a small deposit (at least 5% but less than 10% deposit of the purchase price).
Your deposit is the amount of money that you need to put into the mortgage to make up 100% of the final purchase price.
You still require the income and good credit score to borrow the remaining 95% so you can buy your new home.
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How does a 95% mortgage work?
A 95% mortgage enables you to borrow up to 95% of the purchase price of the property you want to buy, with the remaining 5% made up of your deposit.
An arrangement such as this will sometimes be referred to as a 95% LTV mortgage, where LTV stands for ‘loan-to-value’ ratio.
The lender will still want to see if you can afford the mortgage, so they will be accessing things like your income, expenditure and, very importantly, your credit score and results as well.
Benefits of 95% mortgage.
It could make buying a home easier
With only a 5% deposit required you can get onto the property ladder as soon as possible and reduce the time you spend paying rent or living with family.
You can move sooner
Once moved into your new home your mortgage payments will slowly start to pay off the mortgage so in many years time you eventually own the home with no mortgage at all!
Houses and flats available
Many lenders for the purchase of a flat will require a larger deposit than 5%, however, we have access to lenders who can lend up to 95% on flats, meaning you can buy your home quicker.
What is 95 mortgage for new build home?
A 95% mortgage for a new build property allows you to buy a brand new home with a minimal deposit, typically just 5%. This can be a game-changer for first-time buyers who might struggle to save a larger amount upfront.
Here’s the gist:
- Lower Deposit: You only need 5% of the purchase price as a down payment, making homeownership more accessible.
- Faster on the Ladder: You can buy sooner, potentially avoiding years of saving for a bigger deposit, especially in a rising market.
- Government Help: Some government schemes in the UK (like Help to Buy) might even offer additional support for new builds with 95% mortgages.
However, keep in mind:
- Higher Rates: Expect less favourable interest rates compared to mortgages with larger deposits.
- Limited Options: Fewer lenders might offer 95% mortgages for new builds, potentially restricting your choices.
95% mortgage lending
We have access to the lenders offering 95% mortgages.
Lenders will however expect better than standard credit reports with nearly all lenders offering 95% only agreeing to lend where the applicants have a near-perfect credit report and score.
It is also worth noting that with a 95% mortgage it’s not just about having a good credit score but showing that you’ve had some form of credit recently and have used it responsibly.
Getting a mortgage when you have got a 5% deposit is tough, but don’t worry we can help 
A qualified mortgage broker can be your secret weapon when navigating the complexities of 95% mortgages. Here’s how they can help:
Eligibility Assessment
Brokers understand the nuances of 95% mortgages and can assess your financial situation to determine if you qualify and if it’s the right option for you.
Best Deal on the Market
They have access to a wider pool of lenders offering 95% mortgages and can compare rates and terms to find the deal with the lowest interest rate and most favourable conditions for your specific needs.
Affordability Calculations
Brokers can help you calculate your monthly repayments and ensure you can comfortably afford the mortgage over the long term, factoring in potential interest rate fluctuations.
Weighing the Pros and Cons
They can guide you through a cost-benefit analysis, comparing the advantages of a 95% mortgage with the potential drawbacks and long-term financial implications.
Alternative Options
If a 95% mortgage isn’t the best fit, a broker can explore other avenues such as government assistance schemes or shared ownership options to help you achieve your homeownership goals.
