Question regarding mortgages and deposits

You usually need 15-20% deposit and mortgages are about 3 to3.5 x your salaries

Youl needa minimum of around 10% of the value fo the property for a 90% mortgage, although im not sure they still do 90% mortgages?! i dunno!

but 10% anyway

We got a 90% mortgage, but our house was only £130k. Don't know if the min deposit goes up with the value of the house??

So if our house was £300k we would need at least a £30k deposit. At very least.

F**k me.

Most (not all) 90% mortgages were withdrawn from the market due to banking crisis it's been a few years now but they are slowly back on the rise again.

yes, basically!

It depends. We are currently looking at a government scheme called NewBuy which allows you to get a brand new property of up to £500k on a 95% mortgage, so you only need 5% deposit. There isn't any cap on income with that either which is useful for us.

I'm sure there are 90% mortgages around though as well though. It's just weighing up how long it will take you to save a bigger deposit to get better rates against just saving a smaller amount and having a house 100% yours sooner?

ETA: This is the link for the NewBuy scheme on rightmove in case it's of any use to you: https://www.rightmove.co.uk/news/articles/property-news/newbuy/

I would be a first time buyer so I am hoping that will go in our favour. We're in a brand new flat and we both really want a victorian house.

Better start saving haha

This explains the basic's https://www.broadbandchoices.co.uk/mortgages/guides/how-big-a-deposit-do-i-need-to-get-a-mortgage.html from last year but still mostly relevant

And this is about the 90% mortgages https://www.moneysavingexpert.com/news/2011/07/rise-in-90-mortgages/

We wanted an old house too but would prefer to get on the property ladder sooner, rather than paying out for rent and trying to save so are coming round to the idea of a new build.

Understandable. H is on the property ladder with our place - or at least, we are hanging onto it by the tips of our fingers! We own 35% of the property at the mo, and if we can buy the rest, we can sell 100% of it when we buy our family home. Otherwise we have to sell back the 35% and we'll get nothing from it. Though, i doubt we'd get anyhting from it by selling the whole thing. What a palaver.

As a word of warning, our experience with getting a mortgage was that the banks are stricter over lending for a new build property, especially if on a new development, as it takes a few years for the area to establish its true value. This shouldn't be a problem if the property is well within your budget and you're planning to stay in it for a fair amount of time though.

Thanks BV. I'm hoping some of that hassle will be negated as it's a government backed scheme and the banks have to actively come on board to the scheme so it's encouraged behaviour as such. Plus, like you say, we should be well within our budget, once I start earning as well and will be looking at staying there for a fair while so hopefully it will ok.

We had a 15% deposit, and the bank offered us a mortgage of 4.3x our joint salary. For the price you're looking at, I'd be wanting to save at least £40k if not £45k. We are buying our flat for £223k and are giving a deposit of £33.5k. The banks WERE willing to lend for a smaller percentage but the rates were abysmal.

Would you be at all willing to buy somewhere smaller/without period features, and then move up in later years? At least that way you'd be building up some equity. Ours is a flat not a house, but has lovely Victorian cornicing and an original Victorian fireplace. It's not a forever home but it's significantly cheaper than the Victorian houses in the area and even cheaper than the Victorian conversions whilst also having more space (3 double bedrooms compared to 2 smallish doubles). Something to think about maybe.

My parents are in a Victorian house and want to sell up and move to a brand new flat (mum is hankering for a Thames-side penthouse!) ? although I might have scuppered that now I'm giving them a grandchild, they'll want some space to have him/her over to play!! Otherwise you could swap!!

Oh and also I was told that for joint applications, you only count as 'first-time' if BOTH of you are first-time. That might just be our bank though, not sure if it's a 'general' rule too.

If you want a decent mortgage rate, you need 25%. We looked into it recently and decided to carry on renting. We'd have needed at least £25k and the mortgage would have been £600 a month MORE than we pay in rent. Would much rather buy, but it's just too hard to come by that kind of cash!

I've seen a couple of 95% mortgages floating around recently.

Generally speaking the bigger the deposit the better the rate available to you. Factor in that rates will HAVE to rise as they're incredibly low at the moment. Fixed rate mortgages are more expensive than variable ones on the whole - however you get the certainty of fixing your outgoings. We put down between 25-30% on BTL properties but are aiming for a 25% deposit on the home for us next year.

Good luck, it can be very rewarding.

It depends Panj... we put in 15% and will be paying about £500 less a month to buy than to rent (compared to avg. prices in the same area for 3-bed flats).

So we're paying the same to rent a 1-bed flat as to buy a 3-bed flat, although the areas are different, but you can see it still makes total sense especially now we need an extra room.

Was just going to say the same. There are still a few 95% LTV mortgages to be had.

Getting somewhere smaller wouldnt be an option. We're in a 2 bed flat now. We're looking at 3 or 4 bed houses as we want to start a family and anywhere smaller wouldnt work as H'#s kids are with us every other weekend and his daughter twice a week.

We might have to look at moving further out but it would affect travelling to work.

What a load of hassle! I've just worked out that we could probably save £30k in 3 years. Maybe a touch more. I suppose we'll just have to save and see what we've got when the time comes.

In an ideal world, we would buy my dads house from him when he moves out. He wouldnt expect us to pay too much for it (though we would definitely pay what its worth) and he would be left with enough to buy himself a smaller place. But i havent even vocalised this to him yet so its a bit of a pipedream!!

You'd also need to factor in the purchase/moving costs. SDLT is 3% on properties purchased for a value over £250k. There will also be legal costs and search fees etc.

Yea i am trying to factor those all in too. I was thinking of putting aside £5k for legal fees? will it be more do you think?

I am wondering whether we might be better just renting forever!

No, I think it would be a lot less than that. Maybe £2k-£2.5 inc searches and VAT?

Oh ok, thats good then! £2.5k back into the deposit pot!

Thanks for your help and advice people! save save save!

Just to put a positive spin on this, when we were buying our new build, our bank valued it for £20k less than the price we were due to pay for it - we were a bit ? are we being ripped off? But I believe it is down to the reason BV gave and them not having similar properties to compare it due to the newness. Anyway, we approached the building company with this, and said we weren't happy, resulting in them knocking another 10k off the house price (we had already knocked them down a fair bit.) So it worked out very well for us, as we knew the house was worth it compared to others we'd been looking at ?

We currently have a 2 bed victorian conversion flat and we wanted to sell it after we got married in Sept, but looks like we will have to wait until next year to save a bit more. We did have a chat with our bank and he said if we were looking to buy a house at £280,000 we would ideally need a desposit of 20% as this will definately bring down the monthly payments. I think it worked out that the deposit we would need is £56,000.

Umm Saisi, are you pregnant??

where have u BEEN these past few days!?

Erm..yes please!

Look at her signature ?

Ok now i feel very thick! I can't even use the excuse that i don't have my glasses on ?, will go off and read some posts!

Sorry if it's overdue but congratulations Saisi ?

If you get a Nationwide "Save to Buy" mortgage then you can buy with a 5% deposit after 6 months of contunius saving. Its the route we have chosen to go. If your credit rating is good then you can get a mortgage with a 10% deposit - we have a Mortgage in principle for £216k but that means we need to try and find £21k for the deposit even at 10%. Eeep.

When I bought in 2010 the banks were still being very cautious about too much % loan. There were very few 10% deposit mortages available to me so I had to look at a 15% - then as Cricks said the interest rates are better the more deposit you have so I was fortunate enough that my parents lent me some extra so I could have a 25% deposit and benefit from lower rates, I'm paying it back to them with interest but in total it works out less interest for me than the 15% mortgage and more interest for them than their savings account was offering!

Saisi is right about the first time buyer thing, we're in the opposite situation in that it's only my name on this mortgage and OH is a first time buyer but if we want a joint mortgage then we don't count.

Good luck with it all - be worth it in the end.

Mini I ❤️ you! Just had a look at this and it opens us up to buying an existing property rather than a new build which gives us so much more choice. Going to speak to someone at Nationwide later this week and maybe open an account.