Get on the property ladder with a 95% Mortgage
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.
5% deposit mortgages are great when your deposit is lower than the usual minimum 10% required. This does open the route to purchasing a home earlier for you, but you will pay a higher rate and therefore higher payments for the fact the deposit is lower; as the lender will be worried if anything goes wrong there isn’t much room between the purchase price and your mortgage; ie the 5% difference.
So sometimes even though you may have a 5% deposit it may still be worth saving the extra 5% so you have 10% so you have access to the better rates and where the lenders are also more likely to lend also.
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We have access to all 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. Your mortgage broker can talk through your likely options and how you can improve your chances of being accepted at 95%.
With a 95% mortgage, yes you can buy a property with only a 5% deposit, but you still need to be able to show the lender you can afford the mortgage and the lender is going to want to not only expect a strong credit report but will be checking your income, commitments and will be wanting to make sure you’re not overstretching yourself with the new mortgage.
Your mortgage broker will be able to talk through the 95% options and which lenders would be most likely to lend to you and what you can do to improve your chances of being accepted.